Case Study Description of Suncrest Agribusiness Company: Optimizing Seed Production
Suncrest Agribusiness Company (Suncrest), an agribusiness firm based in the Midwestern United States, was one of the largest seed manufacturers in the world. Seed corn (i.e., the seed that farmers purchased to grow corn in their fields) was the company's largest business segment in the North American market; yet the seed corn market was subject to both demand and supply uncertainty. Farmers chose whether to grow corn or a different crop based on the predicted prices for corn post-harvest, making the demand uncertain. The supply was similarly uncertain because the amount of seed that firms obtained from their fields was subject to random variations. In this challenging environment, Suncrest needed to develop a forecasting model that exploited available data to determine the optimal capacity to grow seed corn. The authors Phillip Jones and Timothy Lowe are affiliated with University of Iowa. Saurabh Bansal is affiliated with Pennsylvania State University.
Swot Analysis of "Suncrest Agribusiness Company: Optimizing Seed Production" written by Phillip Jones, Timothy Lowe, Saurabh Bansal includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Corn Suncrest facing as an external strategic factors. Some of the topics covered in Suncrest Agribusiness Company: Optimizing Seed Production case study are - Strategic Management Strategies, and Technology & Operations.
Some of the macro environment factors that can be used to understand the Suncrest Agribusiness Company: Optimizing Seed Production casestudy better are - – there is increasing trade war between United States & China, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, cloud computing is disrupting traditional business models,
wage bills are increasing, geopolitical disruptions, etc
Introduction to SWOT Analysis of Suncrest Agribusiness Company: Optimizing Seed Production
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Suncrest Agribusiness Company: Optimizing Seed Production case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Corn Suncrest, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Corn Suncrest 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 Suncrest Agribusiness Company: Optimizing Seed Production can be done for the following purposes –
1. Strategic planning using facts provided in Suncrest Agribusiness Company: Optimizing Seed Production case study
2. Improving business portfolio management of Corn Suncrest
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 Corn Suncrest
Strengths Suncrest Agribusiness Company: Optimizing Seed Production | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Corn Suncrest in Suncrest Agribusiness Company: Optimizing Seed Production Harvard Business Review case study are -
High brand equity
– Corn Suncrest has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Corn Suncrest to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Corn Suncrest has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Corn Suncrest has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Sustainable margins compare to other players in Technology & Operations industry
– Suncrest Agribusiness Company: Optimizing Seed Production firm has clearly differentiated products in the market place. This has enabled Corn Suncrest to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Corn Suncrest to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Corn Suncrest 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.
Organizational Resilience of Corn Suncrest
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Corn Suncrest does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Corn Suncrest digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Corn Suncrest 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 Suncrest 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.
Highly skilled collaborators
– Corn Suncrest 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 Suncrest Agribusiness Company: Optimizing Seed Production HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the Suncrest Agribusiness Company: Optimizing Seed Production 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.
Effective Research and Development (R&D)
– Corn Suncrest 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 Suncrest Agribusiness Company: Optimizing Seed Production - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Corn Suncrest in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Corn Suncrest is one of the most innovative firm in sector. Manager in Suncrest Agribusiness Company: Optimizing Seed Production Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Suncrest Agribusiness Company: Optimizing Seed Production | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Suncrest Agribusiness Company: Optimizing Seed Production are -
Aligning sales with marketing
– It come across in the case study Suncrest Agribusiness Company: Optimizing Seed Production 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 Suncrest Agribusiness Company: Optimizing Seed Production can leverage the sales team experience to cultivate customer relationships as Corn Suncrest is planning to shift buying processes online.
Lack of clear differentiation of Corn Suncrest products
– To increase the profitability and margins on the products, Corn Suncrest needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Corn Suncrest 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 bargaining power of channel partners
– Because of the regulatory requirements, Phillip Jones, Timothy Lowe, Saurabh Bansal suggests that, Corn Suncrest 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.
Capital Spending Reduction
– Even during the low interest decade, Corn Suncrest 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.
Slow to strategic competitive environment developments
– As Suncrest Agribusiness Company: Optimizing Seed Production HBR case study mentions - Corn Suncrest 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.
Skills based hiring
– The stress on hiring functional specialists at Corn Suncrest 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Corn Suncrest is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Suncrest Agribusiness Company: Optimizing Seed Production can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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 Corn Suncrest supply chain. Even after few cautionary changes mentioned in the HBR case study - Suncrest Agribusiness Company: Optimizing Seed Production, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Corn Suncrest vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Suncrest Agribusiness Company: Optimizing Seed Production, it seems that the employees of Corn Suncrest 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 decision making process
– As mentioned earlier in the report, Corn Suncrest 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. Corn Suncrest 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.
Opportunities Suncrest Agribusiness Company: Optimizing Seed Production | 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 Suncrest Agribusiness Company: Optimizing Seed Production are -
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. Corn Suncrest 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 Suncrest 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.
Using analytics as competitive advantage
– Corn Suncrest 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 Suncrest Agribusiness Company: Optimizing Seed Production - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Corn Suncrest 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, Corn Suncrest 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.
Better consumer reach
– The expansion of the 5G network will help Corn Suncrest to increase its market reach. Corn Suncrest 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.
Developing new processes and practices
– Corn Suncrest 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Corn Suncrest can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Corn Suncrest can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Corn Suncrest can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Corn Suncrest 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, Suncrest Agribusiness Company: Optimizing Seed Production, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Corn Suncrest can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Corn Suncrest has opened avenues for new revenue streams for the organization in the industry. This can help Corn Suncrest to build a more holistic ecosystem as suggested in the Suncrest Agribusiness Company: Optimizing Seed Production case study. Corn Suncrest can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Suncrest in the consumer business. Now Corn Suncrest can target international markets with far fewer capital restrictions requirements than the existing system.
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 Corn Suncrest 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.
Threats Suncrest Agribusiness Company: Optimizing Seed Production External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Suncrest Agribusiness Company: Optimizing Seed Production are -
Environmental challenges
– Corn Suncrest 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 Suncrest can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Corn Suncrest in the Technology & Operations industry. The Technology & Operations 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.
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.
Consumer confidence and its impact on Corn Suncrest 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 dependence on third party suppliers
– Corn Suncrest 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. Corn Suncrest 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.
Technology acceleration in Forth Industrial Revolution
– Corn Suncrest has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Corn Suncrest needs to keep up with the evolution of technology in the Technology & Operations 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.
Regulatory challenges
– Corn Suncrest 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.
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 Corn Suncrest.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Corn Suncrest with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Corn Suncrest is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Corn Suncrest can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Increasing wage structure of Corn Suncrest
– 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 Suncrest.
Weighted SWOT Analysis of Suncrest Agribusiness Company: Optimizing Seed Production 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 Suncrest Agribusiness Company: Optimizing Seed Production 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 Suncrest Agribusiness Company: Optimizing Seed Production 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 Suncrest Agribusiness Company: Optimizing Seed Production 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 Suncrest Agribusiness Company: Optimizing Seed Production 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 Suncrest needs to make to build a sustainable competitive advantage.