Cargill Inc., a U.S.-based multinational company, is known for its skills in business-to-business (B2B) marketing. It processes food products and markets them in bulk to large institutional buyers with whom it has a strong customer orientation. However, the head of the refined edible oils business at Cargill India, the company's fully owned subsidiary, is facing a problem with the parent company's value proposition around B2B. While developing the annual marketing plans for the next financial year, he finds that the volatility of commodity price movements has made the task of revenue forecasts at Cargill India difficult. This volatility is compounded by frequent changes introduced by the federal government to official regulations governing the edible oil business in India. In order to gain control over the two variables, he is examining the prospect of moving into the business-to-consumer (B2C) space in India. This is a new strategic direction not only for the Indian subsidiary but also for Cargill Inc. Can he achieve buy-in not only from the parent company but also from his own managers? Will he be able to attract marketing professionals who can promote his new brands successfully to the Indian consumer?
Swot Analysis of "Cargill India Pvt.Ltd." written by Dante Pirouz, Chandra Sekhar Ramasastry includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cargill Edible facing as an external strategic factors. Some of the topics covered in Cargill India Pvt.Ltd. case study are - Strategic Management Strategies, Operations management, Strategic planning and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Cargill India Pvt.Ltd. casestudy better are - – there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, increasing energy prices, central banks are concerned over increasing inflation, technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Cargill India Pvt.Ltd.
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Cargill India Pvt.Ltd. case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cargill Edible, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cargill Edible 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 Cargill India Pvt.Ltd. can be done for the following purposes –
1. Strategic planning using facts provided in Cargill India Pvt.Ltd. case study
2. Improving business portfolio management of Cargill Edible
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 Cargill Edible
Strengths Cargill India Pvt.Ltd. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cargill Edible in Cargill India Pvt.Ltd. Harvard Business Review case study are -
Analytics focus
– Cargill Edible is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Dante Pirouz, Chandra Sekhar Ramasastry can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Diverse revenue streams
– Cargill Edible is present in almost all the verticals within the industry. This has provided firm in Cargill India Pvt.Ltd. case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Low bargaining power of suppliers
– Suppliers of Cargill Edible in the sector have low bargaining power. Cargill India Pvt.Ltd. has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cargill Edible to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Cargill Edible has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Cargill India Pvt.Ltd. HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Cargill Edible 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
- Cargill Edible 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 Cargill Edible is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Cargill India Pvt.Ltd. Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Cargill Edible has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Cargill India Pvt.Ltd. 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.
Innovation driven organization
– Cargill Edible is one of the most innovative firm in sector. Manager in Cargill India Pvt.Ltd. Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Cargill Edible is one of the leading recruiters in the industry. Managers in the Cargill India Pvt.Ltd. are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Cargill India Pvt.Ltd. Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Sustainable margins compare to other players in Sales & Marketing industry
– Cargill India Pvt.Ltd. firm has clearly differentiated products in the market place. This has enabled Cargill Edible to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Cargill Edible to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Cargill Edible 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.
Weaknesses Cargill India Pvt.Ltd. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cargill India Pvt.Ltd. are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Cargill India Pvt.Ltd., in the dynamic environment Cargill Edible has struggled to respond to the nimble upstart competition. Cargill Edible has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study Cargill India Pvt.Ltd., it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cargill Edible is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Cargill India Pvt.Ltd. can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study Cargill India Pvt.Ltd. has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Cargill Edible 's lucrative customers.
Slow to strategic competitive environment developments
– As Cargill India Pvt.Ltd. HBR case study mentions - Cargill Edible takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Increasing silos among functional specialists
– The organizational structure of Cargill Edible is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Cargill Edible needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cargill Edible to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Cargill Edible, firm in the HBR case study Cargill India Pvt.Ltd. needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the segment, Cargill Edible needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Cargill India Pvt.Ltd., is just above the industry average. Cargill Edible 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.
Aligning sales with marketing
– It come across in the case study Cargill India Pvt.Ltd. 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 Cargill India Pvt.Ltd. can leverage the sales team experience to cultivate customer relationships as Cargill Edible is planning to shift buying processes online.
High cash cycle compare to competitors
Cargill Edible has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Opportunities Cargill India Pvt.Ltd. | 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 Cargill India Pvt.Ltd. are -
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 Cargill Edible 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.
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. Cargill Edible can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Cargill Edible has opened avenues for new revenue streams for the organization in the industry. This can help Cargill Edible to build a more holistic ecosystem as suggested in the Cargill India Pvt.Ltd. case study. Cargill Edible can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Cargill Edible 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.
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. Cargill Edible 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. Cargill Edible 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.
Better consumer reach
– The expansion of the 5G network will help Cargill Edible to increase its market reach. Cargill Edible will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
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 Cargill Edible in the consumer business. Now Cargill Edible can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Cargill Edible can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Cargill India Pvt.Ltd. suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cargill Edible 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.
Building a culture of innovation
– managers at Cargill Edible can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
Manufacturing automation
– Cargill Edible can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Leveraging digital technologies
– Cargill Edible can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
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. Cargill Edible can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Cargill India Pvt.Ltd. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Cargill India Pvt.Ltd. are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cargill Edible 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 Cargill India Pvt.Ltd. .
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. Cargill Edible needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Cargill Edible.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Cargill Edible business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Cargill Edible 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.
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.
Consumer confidence and its impact on Cargill Edible 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.
Shortening product life cycle
– it is one of the major threat that Cargill Edible is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Cargill India Pvt.Ltd., Cargill Edible 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 .
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 Cargill Edible in the Sales & Marketing sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Cargill Edible can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Environmental challenges
– Cargill Edible 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. Cargill Edible can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Weighted SWOT Analysis of Cargill India Pvt.Ltd. 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 Cargill India Pvt.Ltd. 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 Cargill India Pvt.Ltd. 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 Cargill India Pvt.Ltd. 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 Cargill India Pvt.Ltd. 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 Cargill Edible needs to make to build a sustainable competitive advantage.
