Brazilian meat packer JBS surprised many in the U.S. beef industry when it acquired Swift & Co.--a company more than five times its size--in 2007, then moved to acquire the U.S.'s fourth and fifth largest beef producers in 2008. The new JBS Swift slashed costs and restructured, turning around a quarterly loss of $99 million to a gain of $140 million within 6 months. JBS aimed to position itself to supply beef markets around the world, but it faced a perfect storm of rising feed and fuel prices, a global credit crisis and industry analysts skeptical about the company's debt load.
Swot Analysis of "JBS Swift & Co." written by David E. Bell, Catherine Ross includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Jbs Swift facing as an external strategic factors. Some of the topics covered in JBS Swift & Co. case study are - Strategic Management Strategies, Recession, Reorganization and Sales & Marketing.
Some of the macro environment factors that can be used to understand the JBS Swift & Co. casestudy better are - – increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, geopolitical disruptions, talent flight as more people leaving formal jobs, wage bills are increasing, increasing government debt because of Covid-19 spendings,
digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in JBS Swift & Co. case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Jbs Swift, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Jbs Swift 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 JBS Swift & Co. can be done for the following purposes –
1. Strategic planning using facts provided in JBS Swift & Co. case study
2. Improving business portfolio management of Jbs Swift
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 Jbs Swift
Strengths JBS Swift & Co. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Jbs Swift in JBS Swift & Co. Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Jbs Swift 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.
Learning organization
- Jbs Swift 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 Jbs Swift is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in JBS Swift & Co. Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Jbs Swift is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Sales & Marketing industry
– JBS Swift & Co. firm has clearly differentiated products in the market place. This has enabled Jbs Swift to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Jbs Swift to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Jbs Swift in the sector have low bargaining power. JBS Swift & Co. has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Jbs Swift to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Jbs Swift is one of the leading recruiters in the industry. Managers in the JBS Swift & Co. are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Jbs Swift 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.
Ability to lead change in Sales & Marketing field
– Jbs Swift is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Jbs Swift in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Jbs Swift has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Jbs Swift to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Jbs Swift has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Jbs Swift has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Operational resilience
– The operational resilience strategy in the JBS Swift & Co. 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.
Effective Research and Development (R&D)
– Jbs Swift 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 JBS Swift & Co. - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses JBS Swift & Co. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of JBS Swift & Co. are -
No frontier risks strategy
– After analyzing the HBR case study JBS Swift & Co., 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study JBS Swift & Co., is just above the industry average. Jbs Swift 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the JBS Swift & Co. 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 Jbs Swift has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Jbs Swift is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study JBS Swift & Co. can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As JBS Swift & Co. HBR case study mentions - Jbs Swift 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.
Interest costs
– Compare to the competition, Jbs Swift 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.
Aligning sales with marketing
– It come across in the case study JBS Swift & Co. 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 JBS Swift & Co. can leverage the sales team experience to cultivate customer relationships as Jbs Swift is planning to shift buying processes online.
Lack of clear differentiation of Jbs Swift products
– To increase the profitability and margins on the products, Jbs Swift needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Jbs Swift is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Jbs Swift needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Jbs Swift to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Jbs Swift, firm in the HBR case study JBS Swift & Co. needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Jbs Swift has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Opportunities JBS Swift & Co. | 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 JBS Swift & Co. are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Jbs Swift 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.
Creating value in data economy
– The success of analytics program of Jbs Swift has opened avenues for new revenue streams for the organization in the industry. This can help Jbs Swift to build a more holistic ecosystem as suggested in the JBS Swift & Co. case study. Jbs Swift can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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. Jbs Swift 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. Jbs Swift 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.
Developing new processes and practices
– Jbs Swift 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Jbs Swift can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, JBS Swift & Co., to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Jbs Swift 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 JBS Swift & Co. - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Jbs Swift to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Jbs Swift can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. JBS Swift & Co. 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Jbs Swift can use these opportunities to build new business models that can help the communities that Jbs Swift operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Better consumer reach
– The expansion of the 5G network will help Jbs Swift to increase its market reach. Jbs Swift 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.
Manufacturing automation
– Jbs Swift 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Jbs Swift 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.
Learning at scale
– Online learning technologies has now opened space for Jbs Swift to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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 Jbs Swift in the consumer business. Now Jbs Swift can target international markets with far fewer capital restrictions requirements than the existing system.
Threats JBS Swift & Co. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study JBS Swift & Co. are -
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. Jbs Swift needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
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 Jbs Swift business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Jbs Swift with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Jbs Swift 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.
Environmental challenges
– Jbs Swift 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. Jbs Swift can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Stagnating economy with rate increase
– Jbs Swift 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.
Shortening product life cycle
– it is one of the major threat that Jbs Swift is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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 Jbs Swift in the Sales & Marketing sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Jbs Swift has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Jbs Swift 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study JBS Swift & Co., Jbs Swift 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 .
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. Jbs Swift 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.
Increasing wage structure of Jbs Swift
– 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 Jbs Swift.
Weighted SWOT Analysis of JBS Swift & Co. 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 JBS Swift & Co. 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 JBS Swift & Co. 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 JBS Swift & Co. 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 JBS Swift & Co. 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 Jbs Swift needs to make to build a sustainable competitive advantage.