Dairy Farm Group: Redesign of Business Systems and Processes SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Dairy Farm Group: Redesign of Business Systems and Processes
In 1997, retail sales begain to slump for the Dairy Farm Group of Companies (DFG), a major food retailer based in Hong Kong with operations in many major cities in Asia Pacific. The Asian economic crisis of 1997 was one cause. However, another major cause was increasing competition from aggressive European and U.S. retail chains that were preparing to gain a foothold in the growing Asian market. DFG realized that to combat competition and retain its dominant position in Asia Pacific, it had to change its business strategy from that of "buying and selling" to "sensing and responding." The case investigates DFG's existing business systems and processes and looks at the possibilities of gaining competitive advantage, either by acquiring state of the art systems and technical infrastructure or through radical redesign of its critical business processes supported by technology.
Authors :: Ali F. Farhoomand, Pauline Ng, Eugenia Ng, Probir Banerjee
Swot Analysis of "Dairy Farm Group: Redesign of Business Systems and Processes" written by Ali F. Farhoomand, Pauline Ng, Eugenia Ng, Probir Banerjee includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Dfg Dairy facing as an external strategic factors. Some of the topics covered in Dairy Farm Group: Redesign of Business Systems and Processes case study are - Strategic Management Strategies, Competitive strategy, IT, Supply chain and Technology & Operations.
Some of the macro environment factors that can be used to understand the Dairy Farm Group: Redesign of Business Systems and Processes casestudy better are - – wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China,
increasing energy prices, there is backlash against globalization, etc
Introduction to SWOT Analysis of Dairy Farm Group: Redesign of Business Systems and Processes
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Dairy Farm Group: Redesign of Business Systems and Processes case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Dfg Dairy, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Dfg Dairy 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 Dairy Farm Group: Redesign of Business Systems and Processes can be done for the following purposes –
1. Strategic planning using facts provided in Dairy Farm Group: Redesign of Business Systems and Processes case study
2. Improving business portfolio management of Dfg Dairy
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Dfg Dairy
Strengths Dairy Farm Group: Redesign of Business Systems and Processes | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Dfg Dairy in Dairy Farm Group: Redesign of Business Systems and Processes Harvard Business Review case study are -
Learning organization
- Dfg Dairy 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 Dfg Dairy is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Dairy Farm Group: Redesign of Business Systems and Processes Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Dfg Dairy has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Dfg Dairy to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Dfg Dairy
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Dfg Dairy does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Dfg Dairy is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Dfg Dairy 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 Dairy Farm Group: Redesign of Business Systems and Processes HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Technology & Operations field
– Dfg Dairy 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 Dfg Dairy in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Dfg Dairy 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.
Sustainable margins compare to other players in Technology & Operations industry
– Dairy Farm Group: Redesign of Business Systems and Processes firm has clearly differentiated products in the market place. This has enabled Dfg Dairy to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Dfg Dairy to invest into research and development (R&D) and innovation.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Dfg Dairy digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Dfg Dairy 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.
Innovation driven organization
– Dfg Dairy is one of the most innovative firm in sector. Manager in Dairy Farm Group: Redesign of Business Systems and Processes Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Dfg Dairy 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 Ali F. Farhoomand, Pauline Ng, Eugenia Ng, Probir Banerjee 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.
Cross disciplinary teams
– Horizontal connected teams at the Dfg Dairy 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.
Weaknesses Dairy Farm Group: Redesign of Business Systems and Processes | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Dairy Farm Group: Redesign of Business Systems and Processes are -
No frontier risks strategy
– After analyzing the HBR case study Dairy Farm Group: Redesign of Business Systems and Processes, it seems that company is thinking about the frontier risks that can impact Technology & Operations 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Dairy Farm Group: Redesign of Business Systems and Processes, is just above the industry average. Dfg Dairy needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Low market penetration in new markets
– Outside its home market of Dfg Dairy, firm in the HBR case study Dairy Farm Group: Redesign of Business Systems and Processes needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Dairy Farm Group: Redesign of Business Systems and Processes 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 Dfg Dairy has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Dfg Dairy 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Dairy Farm Group: Redesign of Business Systems and Processes, it seems that the employees of Dfg Dairy 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.
Aligning sales with marketing
– It come across in the case study Dairy Farm Group: Redesign of Business Systems and Processes 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 Dairy Farm Group: Redesign of Business Systems and Processes can leverage the sales team experience to cultivate customer relationships as Dfg Dairy is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Dfg Dairy 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.
Lack of clear differentiation of Dfg Dairy products
– To increase the profitability and margins on the products, Dfg Dairy needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Dfg Dairy 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.
Products dominated business model
– Even though Dfg Dairy 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 - Dairy Farm Group: Redesign of Business Systems and Processes should strive to include more intangible value offerings along with its core products and services.
Opportunities Dairy Farm Group: Redesign of Business Systems and Processes | 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 Dairy Farm Group: Redesign of Business Systems and Processes are -
Loyalty marketing
– Dfg Dairy 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Dfg Dairy 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, Dairy Farm Group: Redesign of Business Systems and Processes, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Dfg Dairy can use these opportunities to build new business models that can help the communities that Dfg Dairy operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Using analytics as competitive advantage
– Dfg Dairy 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 Dairy Farm Group: Redesign of Business Systems and Processes - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Dfg Dairy to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Dfg Dairy is facing challenges because of the dominance of functional experts in the organization. Dairy Farm Group: Redesign of Business Systems and Processes 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Dfg Dairy can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Dfg Dairy 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.
Leveraging digital technologies
– Dfg Dairy 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.
Developing new processes and practices
– Dfg Dairy can develop new processes and procedures in Technology & Operations 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Dfg Dairy 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. Dfg Dairy 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Dfg Dairy 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.
Building a culture of innovation
– managers at Dfg Dairy 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 Technology & Operations segment.
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 Dfg Dairy in the consumer business. Now Dfg Dairy can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Dairy Farm Group: Redesign of Business Systems and Processes External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Dairy Farm Group: Redesign of Business Systems and Processes are -
Shortening product life cycle
– it is one of the major threat that Dfg Dairy is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Dfg Dairy can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Dfg Dairy 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 Dairy Farm Group: Redesign of Business Systems and Processes .
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. Dfg Dairy needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Regulatory challenges
– Dfg Dairy 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 Technology & Operations industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Dfg Dairy with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Dfg Dairy 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. Dfg Dairy can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Increasing wage structure of Dfg Dairy
– 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 Dfg Dairy.
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 Dfg Dairy.
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 Dfg Dairy business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Dfg Dairy 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.
High dependence on third party suppliers
– Dfg Dairy 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.
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. Dfg Dairy 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 Dairy Farm Group: Redesign of Business Systems and Processes 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 Dairy Farm Group: Redesign of Business Systems and Processes 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 Dairy Farm Group: Redesign of Business Systems and Processes 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 Dairy Farm Group: Redesign of Business Systems and Processes 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 Dairy Farm Group: Redesign of Business Systems and Processes 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 Dfg Dairy needs to make to build a sustainable competitive advantage.