JMD Oils: Deciding on a Growth Strategy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of JMD Oils: Deciding on a Growth Strategy
The director of JMD Oils, an edible oils firm, is considering the strategic options to drive his company to the next level of sales and profitability. The business has been showing a steady performance, but he feels that it could improve substantially. To increase profits, the director could increase sales volumes or increase gross margins. An increase in volume could be achieved by increasing the geographical footprint, which would require setting up additional factories. Increasing the margins would require a shift from a dealer push strategy to a consumer pull strategy, which could be achieved by brand building. The director needs to estimate returns from brand building and geographical expansion. The financial risks for each are different and the implementation challenges complicate the decision. What strategy will gain the confidence of investors and yield the best results for JMD Oils in the long term? Sakhhi Chhabra is affiliated with Management Development Institute. Jaydeep Mukherjee is affiliated with Management Development Institute, Gurgaon, India.
Swot Analysis of "JMD Oils: Deciding on a Growth Strategy" written by Sakhhi Chhabra, Jaydeep Mukherjee includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Oils Jmd facing as an external strategic factors. Some of the topics covered in JMD Oils: Deciding on a Growth Strategy case study are - Strategic Management Strategies, International business, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the JMD Oils: Deciding on a Growth Strategy casestudy better are - – increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%,
central banks are concerned over increasing inflation, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of JMD Oils: Deciding on a Growth Strategy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in JMD Oils: Deciding on a Growth Strategy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Oils Jmd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Oils Jmd 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 JMD Oils: Deciding on a Growth Strategy can be done for the following purposes –
1. Strategic planning using facts provided in JMD Oils: Deciding on a Growth Strategy case study
2. Improving business portfolio management of Oils Jmd
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Oils Jmd
Strengths JMD Oils: Deciding on a Growth Strategy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Oils Jmd in JMD Oils: Deciding on a Growth Strategy Harvard Business Review case study are -
High brand equity
– Oils Jmd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Oils Jmd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Oils Jmd 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 Sakhhi Chhabra, Jaydeep Mukherjee 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.
Innovation driven organization
– Oils Jmd is one of the most innovative firm in sector. Manager in JMD Oils: Deciding on a Growth Strategy Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Oils Jmd 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.
Training and development
– Oils Jmd has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in JMD Oils: Deciding on a Growth Strategy 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.
Low bargaining power of suppliers
– Suppliers of Oils Jmd in the sector have low bargaining power. JMD Oils: Deciding on a Growth Strategy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Oils Jmd to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Oils Jmd
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Oils Jmd 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 Strategy & Execution industry
– JMD Oils: Deciding on a Growth Strategy firm has clearly differentiated products in the market place. This has enabled Oils Jmd to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Oils Jmd to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Oils Jmd 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 JMD Oils: Deciding on a Growth Strategy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Oils Jmd in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Oils Jmd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Oils Jmd 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.
Operational resilience
– The operational resilience strategy in the JMD Oils: Deciding on a Growth Strategy 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 JMD Oils: Deciding on a Growth Strategy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of JMD Oils: Deciding on a Growth Strategy are -
High cash cycle compare to competitors
Oils Jmd 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.
Skills based hiring
– The stress on hiring functional specialists at Oils Jmd 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.
Need for greater diversity
– Oils Jmd has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
No frontier risks strategy
– After analyzing the HBR case study JMD Oils: Deciding on a Growth Strategy, it seems that company is thinking about the frontier risks that can impact Strategy & Execution 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.
Increasing silos among functional specialists
– The organizational structure of Oils Jmd is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Oils Jmd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Oils Jmd to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Oils Jmd products
– To increase the profitability and margins on the products, Oils Jmd needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Oils Jmd has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - JMD Oils: Deciding on a Growth Strategy should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Oils Jmd 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.
Low market penetration in new markets
– Outside its home market of Oils Jmd, firm in the HBR case study JMD Oils: Deciding on a Growth Strategy needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As JMD Oils: Deciding on a Growth Strategy HBR case study mentions - Oils Jmd 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, Oils Jmd 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.
Opportunities JMD Oils: Deciding on a Growth Strategy | 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 JMD Oils: Deciding on a Growth Strategy are -
Learning at scale
– Online learning technologies has now opened space for Oils Jmd 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Oils Jmd is facing challenges because of the dominance of functional experts in the organization. JMD Oils: Deciding on a Growth Strategy 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.
Buying journey improvements
– Oils Jmd can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. JMD Oils: Deciding on a Growth Strategy 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.
Loyalty marketing
– Oils Jmd 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Oils Jmd can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Oils Jmd can develop new processes and procedures in Strategy & Execution 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Oils Jmd 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 Oils Jmd to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Oils Jmd 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.
Building a culture of innovation
– managers at Oils Jmd 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 Strategy & Execution segment.
Creating value in data economy
– The success of analytics program of Oils Jmd has opened avenues for new revenue streams for the organization in the industry. This can help Oils Jmd to build a more holistic ecosystem as suggested in the JMD Oils: Deciding on a Growth Strategy case study. Oils Jmd 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
– Oils Jmd 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 JMD Oils: Deciding on a Growth Strategy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Oils Jmd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Oils Jmd 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Oils Jmd can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats JMD Oils: Deciding on a Growth Strategy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study JMD Oils: Deciding on a Growth Strategy are -
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 Oils Jmd business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Oils Jmd 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.
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. Oils Jmd needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Oils Jmd 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Oils Jmd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Oils Jmd can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Oils Jmd 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.
Increasing wage structure of Oils Jmd
– 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 Oils Jmd.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Oils Jmd in the Strategy & Execution industry. The Strategy & Execution 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.
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 Oils Jmd.
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 Oils Jmd in the Strategy & Execution sector and impact the bottomline of the organization.
Weighted SWOT Analysis of JMD Oils: Deciding on a Growth Strategy 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 JMD Oils: Deciding on a Growth Strategy 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 JMD Oils: Deciding on a Growth Strategy 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 JMD Oils: Deciding on a Growth Strategy 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 JMD Oils: Deciding on a Growth Strategy 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 Oils Jmd needs to make to build a sustainable competitive advantage.