Archer Daniels Midland: Direction and Strategy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Archer Daniels Midland: Direction and Strategy
This case is available in only hard copy format (HBP does not have digital distribution rights to the content). As a result, a digital Educator Copy of the case is not available through this web site.Sets out the strategy and competitive competencies of one of the leading grain trade and processing companies in the world. An overview of the company's innovations in corn and oilseed by-products is provided. The strategy of the firm is to add by-products to corn, soybeans, and wheat processing so that they become part of a food, feed, fuel, and pharmaceutical industry complex.
Swot Analysis of "Archer Daniels Midland: Direction and Strategy" written by Ray A. Goldberg, Thomas N. Urban includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Corn Oilseed facing as an external strategic factors. Some of the topics covered in Archer Daniels Midland: Direction and Strategy case study are - Strategic Management Strategies, Innovation and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Archer Daniels Midland: Direction and Strategy casestudy better are - – there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , increasing transportation and logistics costs, there is backlash against globalization,
increasing commodity prices, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Archer Daniels Midland: Direction and Strategy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Archer Daniels Midland: Direction and Strategy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Corn Oilseed, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Corn Oilseed 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 Archer Daniels Midland: Direction and Strategy can be done for the following purposes –
1. Strategic planning using facts provided in Archer Daniels Midland: Direction and Strategy case study
2. Improving business portfolio management of Corn Oilseed
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 Corn Oilseed
Strengths Archer Daniels Midland: Direction and Strategy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Corn Oilseed in Archer Daniels Midland: Direction and Strategy Harvard Business Review case study are -
Sustainable margins compare to other players in Strategy & Execution industry
– Archer Daniels Midland: Direction and Strategy firm has clearly differentiated products in the market place. This has enabled Corn Oilseed to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Corn Oilseed to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Corn Oilseed 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 Archer Daniels Midland: Direction and Strategy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Corn Oilseed 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 Ray A. Goldberg, Thomas N. Urban 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.
Training and development
– Corn Oilseed has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Archer Daniels Midland: Direction and 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.
Organizational Resilience of Corn Oilseed
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Corn Oilseed does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Corn Oilseed is one of the leading recruiters in the industry. Managers in the Archer Daniels Midland: Direction and Strategy are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Corn Oilseed has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Corn Oilseed to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Corn Oilseed is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Corn Oilseed digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Corn Oilseed has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Cross disciplinary teams
– Horizontal connected teams at the Corn Oilseed 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.
Ability to lead change in Strategy & Execution field
– Corn Oilseed 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 Corn Oilseed in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Corn Oilseed in the sector have low bargaining power. Archer Daniels Midland: Direction and Strategy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Corn Oilseed to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Archer Daniels Midland: Direction and Strategy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Archer Daniels Midland: Direction and Strategy are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Archer Daniels Midland: Direction and Strategy 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 Corn Oilseed has relatively successful track record of launching new products.
Products dominated business model
– Even though Corn Oilseed 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 - Archer Daniels Midland: Direction and Strategy should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners
– Because of the regulatory requirements, Ray A. Goldberg, Thomas N. Urban suggests that, Corn Oilseed 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 Archer Daniels Midland: Direction and Strategy, it seems that the employees of Corn Oilseed 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Corn Oilseed is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Archer Daniels Midland: Direction and Strategy can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study Archer Daniels Midland: Direction and 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.
Low market penetration in new markets
– Outside its home market of Corn Oilseed, firm in the HBR case study Archer Daniels Midland: Direction and Strategy needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Corn Oilseed 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.
Capital Spending Reduction
– Even during the low interest decade, Corn Oilseed 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.
Lack of clear differentiation of Corn Oilseed products
– To increase the profitability and margins on the products, Corn Oilseed needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study Archer Daniels Midland: Direction and Strategy 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 Archer Daniels Midland: Direction and Strategy can leverage the sales team experience to cultivate customer relationships as Corn Oilseed is planning to shift buying processes online.
Opportunities Archer Daniels Midland: Direction and 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 Archer Daniels Midland: Direction and Strategy are -
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Corn Oilseed in the consumer business. Now Corn Oilseed can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Corn Oilseed can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Archer Daniels Midland: Direction and 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.
Developing new processes and practices
– Corn Oilseed 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.
Building a culture of innovation
– managers at Corn Oilseed 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.
Leveraging digital technologies
– Corn Oilseed 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Corn Oilseed can use these opportunities to build new business models that can help the communities that Corn Oilseed operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Corn Oilseed 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 Corn Oilseed to increase its market reach. Corn Oilseed 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.
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. Corn Oilseed can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Corn Oilseed 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 Corn Oilseed to hire the very best people irrespective of their geographical location.
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. Corn Oilseed 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. Corn Oilseed 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.
Learning at scale
– Online learning technologies has now opened space for Corn Oilseed 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.
Creating value in data economy
– The success of analytics program of Corn Oilseed has opened avenues for new revenue streams for the organization in the industry. This can help Corn Oilseed to build a more holistic ecosystem as suggested in the Archer Daniels Midland: Direction and Strategy case study. Corn Oilseed can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Archer Daniels Midland: Direction and Strategy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Archer Daniels Midland: Direction and Strategy 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. Corn Oilseed needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Archer Daniels Midland: Direction and Strategy, Corn Oilseed may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Shortening product life cycle
– it is one of the major threat that Corn Oilseed is facing in Strategy & Execution 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 Corn Oilseed in the Strategy & Execution sector and impact the bottomline of the organization.
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 Corn Oilseed business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Corn Oilseed 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 Archer Daniels Midland: Direction and Strategy .
High dependence on third party suppliers
– Corn Oilseed 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.
Increasing wage structure of Corn Oilseed
– 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 Corn Oilseed.
Consumer confidence and its impact on Corn Oilseed 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.
Environmental challenges
– Corn Oilseed 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. Corn Oilseed can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Corn Oilseed 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Corn Oilseed with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Corn Oilseed needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Weighted SWOT Analysis of Archer Daniels Midland: Direction and 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 Archer Daniels Midland: Direction and 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 Archer Daniels Midland: Direction and 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 Archer Daniels Midland: Direction and 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 Archer Daniels Midland: Direction and 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 Corn Oilseed needs to make to build a sustainable competitive advantage.