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 - – cloud computing is disrupting traditional business models, wage bills are increasing, challanges to central banks by blockchain based private currencies, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels,
increasing transportation and logistics costs, technology disruption, 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 -
Organizational Resilience of Compfed Milk
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Compfed Milk does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
Effective Research and Development (R&D)
– Compfed Milk 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 COMPFED: The Dairy Cooperative Distribution System - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
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.
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.
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.
Successful track record of launching new products
– Compfed Milk has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Compfed Milk 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.
Highly skilled collaborators
– Compfed Milk 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 COMPFED: The Dairy Cooperative Distribution System HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the COMPFED: The Dairy Cooperative Distribution System 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.
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 -
Interest costs
– Compare to the competition, Compfed Milk 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.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study COMPFED: The Dairy Cooperative Distribution System, it seems that the employees of Compfed Milk 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.
Low market penetration in new markets
– Outside its home market of Compfed Milk, firm in the HBR case study COMPFED: The Dairy Cooperative Distribution System needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
Increasing silos among functional specialists
– The organizational structure of Compfed Milk is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Compfed Milk needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Compfed Milk to focus more on services rather than just following the product oriented approach.
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.
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.
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.
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.
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.
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 -
Low interest rates
– Even though inflation is raising its head in most developed economies, Compfed Milk 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.
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 Compfed Milk 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Compfed Milk 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 Compfed Milk to hire the very best people irrespective of their geographical location.
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.
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.
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.
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.
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. Compfed Milk can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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.
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.
Manufacturing automation
– Compfed Milk 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Compfed Milk can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 -
Technology acceleration in Forth Industrial Revolution
– Compfed Milk has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Compfed Milk 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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Compfed Milk with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Compfed Milk 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 COMPFED: The Dairy Cooperative Distribution System .
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Compfed Milk in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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.
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.
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.
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 Compfed Milk in the Sales & Marketing sector and impact the bottomline of the organization.
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.
