COMPFED: The Dairy Cooperative Distribution System SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of COMPFED: The Dairy Cooperative Distribution System
Bihar State Milk Cooperative Federation (COMPFED) had been marketing its milk and milk related products under the brand name of Sudha in the Bihar and Jharkhand regions of India for three decades. They operated through six unions and two dairies to process the milk collected from nearly 4,000 village level cooperatives. On the surface, COMPFED appeared to have a competitive advantage for its supply of milk since it maintained the largest network for milk procurement, which spanned a wide geography over these two regions and was unmatched by its competitors. However, due to various environmental forces, the ability to procure an adequate supply had diminished in the last two years, which negatively affected the overall profitability of the organization.The marketing manager of COMPFED had been facing a difficult challenge in serving the growing demand and maintaining profitability. Since he operated in an industry with high fixed costs, the declining supply of milk procurement meant lower sales. As a result, there was no opportunity to significantly lower operating costs to match the limited supply.The marketing manager thought of two reasons present in the external environment that contributed to this situation. First, a series of incessant floods had caused damages to grazing land and livestock operations in many of the villages that were the source for milk. Additionally, private players were disrupting the supply chain by offering short term higher payments to some suppliers/farmers on a case by case basis. These players did not face the same regulatory and hygienic guidelines that COMPFED did and operated outside the normal infrastructure. His options included two very different alternatives; trying to work with these agents or securing a process to minimize or eradicate their activities.
Swot Analysis of "COMPFED: The Dairy Cooperative Distribution System" written by Atanu Adhikari, Subhash Jha includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Compfed Milk facing as an external strategic factors. Some of the topics covered in COMPFED: The Dairy Cooperative Distribution System case study are - Strategic Management Strategies, Marketing, Strategy and Sales & Marketing.
Some of the macro environment factors that can be used to understand the COMPFED: The Dairy Cooperative Distribution System casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, geopolitical disruptions, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models,
increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of COMPFED: The Dairy Cooperative Distribution System
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in COMPFED: The Dairy Cooperative Distribution System case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Compfed Milk, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Compfed Milk 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 COMPFED: The Dairy Cooperative Distribution System can be done for the following purposes –
1. Strategic planning using facts provided in COMPFED: The Dairy Cooperative Distribution System case study
2. Improving business portfolio management of Compfed Milk
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 Compfed Milk
Strengths COMPFED: The Dairy Cooperative Distribution System | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Compfed Milk in COMPFED: The Dairy Cooperative Distribution System Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Compfed Milk in the sector have low bargaining power. COMPFED: The Dairy Cooperative Distribution System has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Compfed Milk to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Sales & Marketing industry
– COMPFED: The Dairy Cooperative Distribution System firm has clearly differentiated products in the market place. This has enabled Compfed Milk to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Compfed Milk to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Compfed Milk is one of the leading recruiters in the industry. Managers in the COMPFED: The Dairy Cooperative Distribution System 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 brand equity
– Compfed Milk has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Compfed Milk to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Compfed Milk 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 Atanu Adhikari, Subhash Jha 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Compfed Milk digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Compfed Milk has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Cross disciplinary teams
– Horizontal connected teams at the Compfed Milk 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.
Strong track record of project management
– Compfed Milk is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Compfed Milk in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Compfed Milk 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.
Diverse revenue streams
– Compfed Milk is present in almost all the verticals within the industry. This has provided firm in COMPFED: The Dairy Cooperative Distribution System 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.
Ability to lead change in Sales & Marketing field
– Compfed Milk 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 Compfed Milk in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses COMPFED: The Dairy Cooperative Distribution System | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of COMPFED: The Dairy Cooperative Distribution System are -
Slow to strategic competitive environment developments
– As COMPFED: The Dairy Cooperative Distribution System HBR case study mentions - Compfed Milk 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Atanu Adhikari, Subhash Jha suggests that, Compfed Milk 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 operating costs
– Compare to the competitors, firm in the HBR case study COMPFED: The Dairy Cooperative Distribution System 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 Compfed Milk 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study COMPFED: The Dairy Cooperative Distribution System, is just above the industry average. Compfed Milk 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.
No frontier risks strategy
– After analyzing the HBR case study COMPFED: The Dairy Cooperative Distribution System, 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, Compfed Milk is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study COMPFED: The Dairy Cooperative Distribution System can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at Compfed Milk has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Compfed Milk 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study COMPFED: The Dairy Cooperative Distribution System, in the dynamic environment Compfed Milk has struggled to respond to the nimble upstart competition. Compfed Milk has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Compfed Milk 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. Compfed Milk 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.
High cash cycle compare to competitors
Compfed Milk 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 COMPFED: The Dairy Cooperative Distribution System | 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 COMPFED: The Dairy Cooperative Distribution System are -
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 Compfed Milk in the consumer business. Now Compfed Milk can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Compfed Milk 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Compfed Milk is facing challenges because of the dominance of functional experts in the organization. COMPFED: The Dairy Cooperative Distribution System 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.
Using analytics as competitive advantage
– Compfed Milk 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 COMPFED: The Dairy Cooperative Distribution System - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Compfed Milk to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Compfed Milk 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.
Creating value in data economy
– The success of analytics program of Compfed Milk has opened avenues for new revenue streams for the organization in the industry. This can help Compfed Milk to build a more holistic ecosystem as suggested in the COMPFED: The Dairy Cooperative Distribution System case study. Compfed Milk 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. Compfed Milk 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. Compfed Milk 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Compfed Milk 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, COMPFED: The Dairy Cooperative Distribution System, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Compfed Milk 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.
Better consumer reach
– The expansion of the 5G network will help Compfed Milk to increase its market reach. Compfed Milk 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.
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. Compfed Milk can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Compfed Milk can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. COMPFED: The Dairy Cooperative Distribution System 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.
Learning at scale
– Online learning technologies has now opened space for Compfed Milk 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.
Threats COMPFED: The Dairy Cooperative Distribution System External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study COMPFED: The Dairy Cooperative Distribution System are -
Environmental challenges
– Compfed Milk 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. Compfed Milk can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
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.
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.
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. Compfed Milk 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.
Consumer confidence and its impact on Compfed Milk 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.
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 Compfed Milk.
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 Compfed Milk business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Compfed Milk 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.
Shortening product life cycle
– it is one of the major threat that Compfed Milk is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Compfed Milk can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study COMPFED: The Dairy Cooperative Distribution System, Compfed Milk 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 .
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. Compfed Milk needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Compfed Milk 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.
Weighted SWOT Analysis of COMPFED: The Dairy Cooperative Distribution System 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 COMPFED: The Dairy Cooperative Distribution System 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 COMPFED: The Dairy Cooperative Distribution System 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 COMPFED: The Dairy Cooperative Distribution System 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 COMPFED: The Dairy Cooperative Distribution System 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 Compfed Milk needs to make to build a sustainable competitive advantage.