San Miguel: Succession in the Philippines' Largest Corporation SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of San Miguel: Succession in the Philippines' Largest Corporation
In September 2011, San Miguel Corporation (SMC) celebrated its 122nd anniversary. Its chairman had just turned 76. Two years earlier, he had travelled to the United States to receive a cardiac ablation to correct an irregular heart rhythm. Succession-related questions were on his mind. SMC needed a clear plan for the leadership transition. The charismatic chairman spent his life successfully exploiting business opportunities, growing SMC from a small brewery company into a giant business group. By 2011, SMC was the largest corporation in the Philippines in terms of revenue-accounting for about 6 per cent of the country's gross domestic product and employing about 17,000 people. The group engaged in a wide range of businesses including mining, oil refining and distribution, power, telecommunications, airlines, airports, and infrastructure. How could the company continue to thrive without its remarkable leader? Finding a path towards a smooth leadership succession would be a difficult task. The authors Ruth S.K. Tan and Yupana Wiwattanakantang are affiliated with National University of Singapore.
Swot Analysis of "San Miguel: Succession in the Philippines' Largest Corporation" written by Ruth S.K. Tan, Yupana Wiwattanakantang includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Smc Succession facing as an external strategic factors. Some of the topics covered in San Miguel: Succession in the Philippines' Largest Corporation case study are - Strategic Management Strategies, Succession planning and Organizational Development.
Some of the macro environment factors that can be used to understand the San Miguel: Succession in the Philippines' Largest Corporation casestudy better are - – increasing commodity prices, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies,
talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of San Miguel: Succession in the Philippines' Largest Corporation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in San Miguel: Succession in the Philippines' Largest Corporation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Smc Succession, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Smc Succession 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 San Miguel: Succession in the Philippines' Largest Corporation can be done for the following purposes –
1. Strategic planning using facts provided in San Miguel: Succession in the Philippines' Largest Corporation case study
2. Improving business portfolio management of Smc Succession
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Smc Succession
Strengths San Miguel: Succession in the Philippines' Largest Corporation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Smc Succession in San Miguel: Succession in the Philippines' Largest Corporation Harvard Business Review case study are -
Training and development
– Smc Succession has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in San Miguel: Succession in the Philippines' Largest Corporation 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.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Smc Succession digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Smc Succession 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
– Smc Succession is one of the most innovative firm in sector. Manager in San Miguel: Succession in the Philippines' Largest Corporation Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High switching costs
– The high switching costs that Smc Succession 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.
Operational resilience
– The operational resilience strategy in the San Miguel: Succession in the Philippines' Largest Corporation 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.
Successful track record of launching new products
– Smc Succession has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Smc Succession 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.
Ability to lead change in Organizational Development field
– Smc Succession 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 Smc Succession in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Smc Succession 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 San Miguel: Succession in the Philippines' Largest Corporation - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Smc Succession in the sector have low bargaining power. San Miguel: Succession in the Philippines' Largest Corporation has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Smc Succession to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Organizational Development industry
– San Miguel: Succession in the Philippines' Largest Corporation firm has clearly differentiated products in the market place. This has enabled Smc Succession to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Smc Succession to invest into research and development (R&D) and innovation.
High brand equity
– Smc Succession has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Smc Succession to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Smc Succession is present in almost all the verticals within the industry. This has provided firm in San Miguel: Succession in the Philippines' Largest Corporation 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 San Miguel: Succession in the Philippines' Largest Corporation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of San Miguel: Succession in the Philippines' Largest Corporation are -
Aligning sales with marketing
– It come across in the case study San Miguel: Succession in the Philippines' Largest Corporation 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 San Miguel: Succession in the Philippines' Largest Corporation can leverage the sales team experience to cultivate customer relationships as Smc Succession is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Smc Succession 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.
Interest costs
– Compare to the competition, Smc Succession 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 star products
– The top 2 products and services of the firm as mentioned in the San Miguel: Succession in the Philippines' Largest Corporation 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 Smc Succession has relatively successful track record of launching new products.
Need for greater diversity
– Smc Succession 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.
Capital Spending Reduction
– Even during the low interest decade, Smc Succession 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 operating costs
– Compare to the competitors, firm in the HBR case study San Miguel: Succession in the Philippines' Largest Corporation 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 Smc Succession 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study San Miguel: Succession in the Philippines' Largest Corporation, it seems that company is thinking about the frontier risks that can impact Organizational Development 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Ruth S.K. Tan, Yupana Wiwattanakantang suggests that, Smc Succession 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.
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 Smc Succession supply chain. Even after few cautionary changes mentioned in the HBR case study - San Miguel: Succession in the Philippines' Largest Corporation, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Smc Succession vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Smc Succession, firm in the HBR case study San Miguel: Succession in the Philippines' Largest Corporation needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities San Miguel: Succession in the Philippines' Largest Corporation | 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 San Miguel: Succession in the Philippines' Largest Corporation are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Smc Succession can use these opportunities to build new business models that can help the communities that Smc Succession operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
Loyalty marketing
– Smc Succession has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Smc Succession can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Smc Succession is facing challenges because of the dominance of functional experts in the organization. San Miguel: Succession in the Philippines' Largest Corporation 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Smc Succession 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 Smc Succession to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Smc Succession can use the latest technology developments to improve its manufacturing and designing process in Organizational Development 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.
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 Smc Succession in the consumer business. Now Smc Succession can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Smc Succession can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Smc Succession 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 San Miguel: Succession in the Philippines' Largest Corporation - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Smc Succession to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Smc Succession 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.
Buying journey improvements
– Smc Succession can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. San Miguel: Succession in the Philippines' Largest Corporation 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.
Leveraging digital technologies
– Smc Succession 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
– Smc Succession can develop new processes and procedures in Organizational Development 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.
Threats San Miguel: Succession in the Philippines' Largest Corporation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study San Miguel: Succession in the Philippines' Largest Corporation are -
Environmental challenges
– Smc Succession 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. Smc Succession can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
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 Smc Succession business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Smc Succession 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Smc Succession 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 San Miguel: Succession in the Philippines' Largest Corporation .
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.
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 Smc Succession.
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 Smc Succession in the Organizational Development sector and impact the bottomline of the organization.
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. Smc Succession 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.
Consumer confidence and its impact on Smc Succession 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.
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. Smc Succession needs to understand the core reasons impacting the Organizational Development 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 San Miguel: Succession in the Philippines' Largest Corporation, Smc Succession may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
Increasing wage structure of Smc Succession
– 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 Smc Succession.
Regulatory challenges
– Smc Succession 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 Organizational Development industry regulations.
Weighted SWOT Analysis of San Miguel: Succession in the Philippines' Largest Corporation 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 San Miguel: Succession in the Philippines' Largest Corporation 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 San Miguel: Succession in the Philippines' Largest Corporation 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 San Miguel: Succession in the Philippines' Largest Corporation 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 San Miguel: Succession in the Philippines' Largest Corporation 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 Smc Succession needs to make to build a sustainable competitive advantage.
