Alliance Grain Traders Inc.: Moving Up the Value Chain (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Alliance Grain Traders Inc.: Moving Up the Value Chain (A)
A stock market analyst was reviewing one of his fund's holdings, Alliance Grain Traders Inc. (AGT). One of the world's largest traders of pulse crops, AGT was in the midst of entering a new line of business and expanding its non-core operations. On one hand, AGT would have been able to use its dominance in pulse trading as an advantage in expanding up the value chain. On the other hand, it was moving into sectors that were already mature and highly competitive. The key question for the analyst was whether he should continue to hold AGT stock given its stated objectives.
Swot Analysis of "Alliance Grain Traders Inc.: Moving Up the Value Chain (A)" written by Mark B. Vandenbosch, Ken Mark includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Agt Traders facing as an external strategic factors. Some of the topics covered in Alliance Grain Traders Inc.: Moving Up the Value Chain (A) case study are - Strategic Management Strategies, Economics and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Alliance Grain Traders Inc.: Moving Up the Value Chain (A) casestudy better are - – increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, increasing energy prices, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%,
increasing government debt because of Covid-19 spendings, geopolitical disruptions, etc
Introduction to SWOT Analysis of Alliance Grain Traders Inc.: Moving Up the Value Chain (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Alliance Grain Traders Inc.: Moving Up the Value Chain (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Agt Traders, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Agt Traders operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Alliance Grain Traders Inc.: Moving Up the Value Chain (A) can be done for the following purposes –
1. Strategic planning using facts provided in Alliance Grain Traders Inc.: Moving Up the Value Chain (A) case study
2. Improving business portfolio management of Agt Traders
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Agt Traders
Strengths Alliance Grain Traders Inc.: Moving Up the Value Chain (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Agt Traders in Alliance Grain Traders Inc.: Moving Up the Value Chain (A) Harvard Business Review case study are -
High brand equity
– Agt Traders has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Agt Traders to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Agt Traders in the sector have low bargaining power. Alliance Grain Traders Inc.: Moving Up the Value Chain (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Agt Traders to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Agt Traders has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Innovation driven organization
– Agt Traders is one of the most innovative firm in sector. Manager in Alliance Grain Traders Inc.: Moving Up the Value Chain (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Agt Traders are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Effective Research and Development (R&D)
– Agt Traders has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Alliance Grain Traders Inc.: Moving Up the Value Chain (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Agt Traders has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Alliance Grain Traders Inc.: Moving Up the Value Chain (A) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Organizational Resilience of Agt Traders
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Agt Traders does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Agt Traders is one of the leading recruiters in the industry. Managers in the Alliance Grain Traders Inc.: Moving Up the Value Chain (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Sales & Marketing industry
– Alliance Grain Traders Inc.: Moving Up the Value Chain (A) firm has clearly differentiated products in the market place. This has enabled Agt Traders to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Agt Traders to invest into research and development (R&D) and innovation.
Strong track record of project management
– Agt Traders is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Agt Traders is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Agt Traders is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Alliance Grain Traders Inc.: Moving Up the Value Chain (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Alliance Grain Traders Inc.: Moving Up the Value Chain (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Alliance Grain Traders Inc.: Moving Up the Value Chain (A) are -
Interest costs
– Compare to the competition, Agt Traders has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Alliance Grain Traders Inc.: Moving Up the Value Chain (A), it seems that the employees of Agt Traders don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Alliance Grain Traders Inc.: Moving Up the Value Chain (A) HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Agt Traders has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Alliance Grain Traders Inc.: Moving Up the Value Chain (A), is just above the industry average. Agt Traders needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High bargaining power of channel partners
– Because of the regulatory requirements, Mark B. Vandenbosch, Ken Mark suggests that, Agt Traders is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Agt Traders supply chain. Even after few cautionary changes mentioned in the HBR case study - Alliance Grain Traders Inc.: Moving Up the Value Chain (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Agt Traders vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Agt Traders is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Alliance Grain Traders Inc.: Moving Up the Value Chain (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– It come across in the case study Alliance Grain Traders Inc.: Moving Up the Value Chain (A) that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Alliance Grain Traders Inc.: Moving Up the Value Chain (A) can leverage the sales team experience to cultivate customer relationships as Agt Traders is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Agt Traders has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Agt Traders even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Low market penetration in new markets
– Outside its home market of Agt Traders, firm in the HBR case study Alliance Grain Traders Inc.: Moving Up the Value Chain (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Agt Traders has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Opportunities Alliance Grain Traders Inc.: Moving Up the Value Chain (A) | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Alliance Grain Traders Inc.: Moving Up the Value Chain (A) are -
Using analytics as competitive advantage
– Agt Traders has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Alliance Grain Traders Inc.: Moving Up the Value Chain (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Agt Traders to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Agt Traders is facing challenges because of the dominance of functional experts in the organization. Alliance Grain Traders Inc.: Moving Up the Value Chain (A) case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Agt Traders can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Agt Traders in the consumer business. Now Agt Traders can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Agt Traders can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Agt Traders to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Loyalty marketing
– Agt Traders has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Agt Traders can use these opportunities to build new business models that can help the communities that Agt Traders operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Agt Traders can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Agt Traders can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Agt Traders can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Agt Traders can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Agt Traders to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Agt Traders to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Agt Traders in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Threats Alliance Grain Traders Inc.: Moving Up the Value Chain (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Alliance Grain Traders Inc.: Moving Up the Value Chain (A) are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Agt Traders with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Alliance Grain Traders Inc.: Moving Up the Value Chain (A), Agt Traders may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Agt Traders can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Alliance Grain Traders Inc.: Moving Up the Value Chain (A) .
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Agt Traders will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
High dependence on third party suppliers
– Agt Traders high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Agt Traders can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Agt Traders needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Environmental challenges
– Agt Traders needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Agt Traders can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Agt Traders in the Sales & Marketing sector and impact the bottomline of the organization.
Increasing wage structure of Agt Traders
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Agt Traders.
Technology acceleration in Forth Industrial Revolution
– Agt Traders has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Agt Traders needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Consumer confidence and its impact on Agt Traders demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Weighted SWOT Analysis of Alliance Grain Traders Inc.: Moving Up the Value Chain (A) Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Alliance Grain Traders Inc.: Moving Up the Value Chain (A) needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Alliance Grain Traders Inc.: Moving Up the Value Chain (A) is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Alliance Grain Traders Inc.: Moving Up the Value Chain (A) is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Alliance Grain Traders Inc.: Moving Up the Value Chain (A) is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Agt Traders needs to make to build a sustainable competitive advantage.
