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 - – digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, geopolitical disruptions, talent flight as more people leaving formal jobs,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, 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 -
Cross disciplinary teams
– Horizontal connected teams at the Palm Wilmar 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.
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.
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.
Analytics focus
– Palm Wilmar 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 Beng Geok Wee, Geraldine Chen, Ivy Buche 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 lead change in Strategy & Execution field
– Palm Wilmar 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 Palm Wilmar in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
Learning organization
- Palm Wilmar is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Palm Wilmar is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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.
Training and development
– Palm Wilmar has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group 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.
Diverse revenue streams
– Palm Wilmar is present in almost all the verticals within the industry. This has provided firm in Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group 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.
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 -
Skills based hiring
– The stress on hiring functional specialists at Palm Wilmar 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.
No frontier risks strategy
– After analyzing the HBR case study Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group, 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Palm Wilmar 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.
Slow to strategic competitive environment developments
– As Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group HBR case study mentions - Palm Wilmar 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.
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.
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.
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.
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.
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.
Slow decision making process
– As mentioned earlier in the report, Palm Wilmar 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. Palm Wilmar 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 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.
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 -
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.
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.
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.
Buying journey improvements
– Palm Wilmar can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group 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.
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.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Palm Wilmar in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
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.
Leveraging digital technologies
– Palm Wilmar 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.
Manufacturing automation
– Palm Wilmar can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Palm Wilmar 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, Wilmar International Limited - Managing Multiple Stakeholders in a Global Palm Oil Agribusiness Group, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 -
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Palm Wilmar 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.
Shortening product life cycle
– it is one of the major threat that Palm Wilmar is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
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.
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 Palm Wilmar business can come under increasing regulations regarding data privacy, data security, 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 Palm Wilmar in the Strategy & Execution sector and impact the bottomline of the organization.
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.
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.
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.
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.
Consumer confidence and its impact on Palm Wilmar 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.
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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