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, competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization,
increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, 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 -
Low bargaining power of suppliers
– Suppliers of Corn Suncrest in the sector have low bargaining power. Suncrest Agribusiness Company: Optimizing Seed Production has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Corn Suncrest to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
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.
Ability to recruit top talent
– Corn Suncrest is one of the leading recruiters in the industry. Managers in the Suncrest Agribusiness Company: Optimizing Seed Production 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 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.
Diverse revenue streams
– Corn Suncrest is present in almost all the verticals within the industry. This has provided firm in Suncrest Agribusiness Company: Optimizing Seed Production 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.
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.
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.
Training and development
– Corn Suncrest has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Suncrest Agribusiness Company: Optimizing Seed Production 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.
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.
Ability to lead change in Technology & Operations field
– Corn Suncrest 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 Suncrest in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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 -
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Suncrest Agribusiness Company: Optimizing Seed Production, is just above the industry average. Corn Suncrest 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.
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.
Low market penetration in new markets
– Outside its home market of Corn Suncrest, firm in the HBR case study Suncrest Agribusiness Company: Optimizing Seed Production needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 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.
High cash cycle compare to competitors
Corn Suncrest has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Suncrest Agribusiness Company: Optimizing Seed Production 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 Suncrest has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Corn Suncrest is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Corn Suncrest needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Corn Suncrest to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Suncrest Agribusiness Company: Optimizing Seed Production, in the dynamic environment Corn Suncrest has struggled to respond to the nimble upstart competition. Corn Suncrest has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Corn Suncrest in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
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 Suncrest can use these opportunities to build new business models that can help the communities that Corn Suncrest operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
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.
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.
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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Corn Suncrest 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 Suncrest to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Corn Suncrest 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.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Corn Suncrest 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.
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 -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Corn Suncrest 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 Suncrest Agribusiness Company: Optimizing Seed Production .
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Corn Suncrest with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Suncrest Agribusiness Company: Optimizing Seed Production, Corn Suncrest may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
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.
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. Corn Suncrest can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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 Suncrest business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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.
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.