Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group
Established in 1991, Wilmar grew rapidly to become one of the largest palm oil companies in Southeast Asia, with revenue and net profits of US$23.9 billion and US$1.88 billion respectively for the year ended March 2009. It operated in the entire value chain of the industry, from plantations to processing, merchandising, shipping and distribution. As the third-largest listed plantation company in the world, it operated 300 processing plants and had an extensive global distribution network. Its products sold in more than 50 countries, including China and India. As the global demand for palm oil grew, environmental groups were concerned about the impact of palm oil industry on the social and natural environment, such as loss of forest ecosystems, environmental damage, soil degradation, pollution, greenhouse gas emissions and climate change. They were pressuring palm oil producers, including Wilmar, to take action to address these issues. By late 2010, Wilmar had two strategic initiatives to drive future growth. It was poised to acquire Sucrogen, Australia's largest sugar company with operations in sugar milling and refining, bioethanol production and generation of renewable electricity. It was also expanding into sub-Saharan Africa, where many governments were keen to support the development of commercially managed large-scale oil palm projects. However, as in Asia, palm oil producers and governments could expect to encounter pressure from environmental groups with regard to possible adverse effects. The challenge was to manage these initiatives and the environmentalists' demands for more sustainable operations.
Swot Analysis of "Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group" written by Beng Geok Wee, Geraldine Chen, Ivy Buche includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Palm Wilmar facing as an external strategic factors. Some of the topics covered in Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group case study are - Strategic Management Strategies, International business, Mergers & acquisitions, Supply chain, Sustainability and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group casestudy better are - – supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, there is increasing trade war between United States & China, increasing energy prices, increasing household debt because of falling income levels, wage bills are increasing,
technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Palm Wilmar, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Palm Wilmar 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 Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group can be done for the following purposes –
1. Strategic planning using facts provided in Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group case study
2. Improving business portfolio management of Palm Wilmar
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 Palm Wilmar
Strengths Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Palm Wilmar in Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group 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.
Superior customer experience
– The customer experience strategy of Palm Wilmar in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Palm Wilmar 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)
– Palm Wilmar 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 Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Palm Wilmar has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Palm Wilmar to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Palm Wilmar 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.
Successful track record of launching new products
– Palm Wilmar has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Palm Wilmar 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group firm has clearly differentiated products in the market place. This has enabled Palm Wilmar to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Palm Wilmar to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Palm Wilmar is one of the leading recruiters in the industry. Managers in the Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Palm Wilmar is one of the most innovative firm in sector. Manager in Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Palm Wilmar 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 Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Palm Wilmar
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Palm Wilmar does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group are -
Need for greater diversity
– Palm Wilmar 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.
Interest costs
– Compare to the competition, Palm Wilmar 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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Palm Wilmar supply chain. Even after few cautionary changes mentioned in the HBR case study - Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Palm Wilmar vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group 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 Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group can leverage the sales team experience to cultivate customer relationships as Palm Wilmar is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Palm Wilmar, firm in the HBR case study Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Palm Wilmar 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group 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 Palm Wilmar has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group 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 Palm Wilmar 's lucrative customers.
High cash cycle compare to competitors
Palm Wilmar 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Beng Geok Wee, Geraldine Chen, Ivy Buche suggests that, Palm Wilmar 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group, it seems that the employees of Palm Wilmar 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.
Opportunities Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group | 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 Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group are -
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Palm Wilmar 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Palm Wilmar 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. Palm Wilmar 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Palm Wilmar can use these opportunities to build new business models that can help the communities that Palm Wilmar operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Loyalty marketing
– Palm Wilmar 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, Palm Wilmar is facing challenges because of the dominance of functional experts in the organization. Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group 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 Palm Wilmar has opened avenues for new revenue streams for the organization in the industry. This can help Palm Wilmar to build a more holistic ecosystem as suggested in the Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group case study. Palm Wilmar can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Palm Wilmar 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Palm Wilmar 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 Palm Wilmar to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Palm Wilmar 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 Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Palm Wilmar 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 Strategy & Execution industry, but it has also influenced the consumer preferences. Palm Wilmar can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Palm Wilmar can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Palm Wilmar can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Palm Wilmar to increase its market reach. Palm Wilmar 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.
Threats Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group are -
Stagnating economy with rate increase
– Palm Wilmar 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.
Increasing wage structure of Palm Wilmar
– 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 Palm Wilmar.
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 Palm Wilmar.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Palm Wilmar 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 Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group .
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. Palm Wilmar can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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. Palm Wilmar needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Palm Wilmar 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.
Technology acceleration in Forth Industrial Revolution
– Palm Wilmar has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Palm Wilmar needs to keep up with the evolution of technology in the Strategy & Execution 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
– Palm Wilmar 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. Palm Wilmar can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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 Palm Wilmar in the Strategy & Execution sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Palm Wilmar with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Palm Wilmar 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.
Weighted SWOT Analysis of Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group 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 Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group 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 Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group 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 Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group 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 Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group 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 Palm Wilmar needs to make to build a sustainable competitive advantage.
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