Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness
Founded in 1989, Olam International Limited began as a small trader of cashew nuts. Over the years, it grew into a multi-country, multi-product integrated agribusiness. In 2016, Olam was one of the 30 largest Singapore Exchange-listed companies by market capitalization and recorded annual turnover of US$14.2 billion. This case examines Olam's corporate strategy in three chronological phases: (i) 1989-2005 (organic growth); (ii) 2006-2012 (organic and inorganic growth); (iii) 2013-2016 (sustainable growth and generation of positive free cash flow). In November 2012, Olam temporarily put the brakes on its expansion drive following a short seller's attack. The third phase (2013-2016) saw Olam conducting a strategic review, re-calibrating its strategic plan, implementing restructuring initiatives, and working towards new goals and its new vision. During this period, Olam attracted capital from two strategic investors - Singapore's Temasek Holdings and Japan's Mitsubishi Corporation. Besides describing Olam's financing strategy, this case also summarizes Olam's major acquisitions, divestments, joint ventures and greenfield investments. This case may generate a discussion on the challenges that Olam would have to overcome in its quest to become the most differentiated and valuable global agribusiness.
Swot Analysis of "Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness" written by Kim Wai Ho, Shirley Koh, Yin Kheng Lau includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Olam Olam's facing as an external strategic factors. Some of the topics covered in Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness case study are - Strategic Management Strategies, Financial management, Mergers & acquisitions and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, cloud computing is disrupting traditional business models, increasing transportation and logistics costs,
geopolitical disruptions, wage bills are increasing, etc
Introduction to SWOT Analysis of Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Olam Olam's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Olam Olam's 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 Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness can be done for the following purposes –
1. Strategic planning using facts provided in Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness case study
2. Improving business portfolio management of Olam Olam's
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Olam Olam's
Strengths Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Olam Olam's in Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness Harvard Business Review case study are -
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Olam Olam's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Olam Olam's 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.
Analytics focus
– Olam Olam's 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 Kim Wai Ho, Shirley Koh, Yin Kheng Lau 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.
Learning organization
- Olam Olam's 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 Olam Olam's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Olam Olam's is present in almost all the verticals within the industry. This has provided firm in Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness 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.
Low bargaining power of suppliers
– Suppliers of Olam Olam's in the sector have low bargaining power. Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Olam Olam's to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Olam Olam's 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 Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness - 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 Olam Olam's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Olam Olam's 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.
Innovation driven organization
– Olam Olam's is one of the most innovative firm in sector. Manager in Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Finance & Accounting industry
– Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness firm has clearly differentiated products in the market place. This has enabled Olam Olam's to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Olam Olam's to invest into research and development (R&D) and innovation.
High brand equity
– Olam Olam's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Olam Olam's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Olam Olam's 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 Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness are -
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 Olam Olam's supply chain. Even after few cautionary changes mentioned in the HBR case study - Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Olam Olam's vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Olam Olam's 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.
Increasing silos among functional specialists
– The organizational structure of Olam Olam's is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Olam Olam's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Olam Olam's to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Olam Olam's products
– To increase the profitability and margins on the products, Olam Olam's needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness 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 Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness can leverage the sales team experience to cultivate customer relationships as Olam Olam's is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness, it seems that the employees of Olam Olam's 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness, in the dynamic environment Olam Olam's has struggled to respond to the nimble upstart competition. Olam Olam's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Olam Olam's 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. Olam Olam's 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Olam Olam's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Olam Olam's 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 - Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness, is just above the industry average. Olam Olam's 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.
Opportunities Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness | 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 Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Olam Olam's 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 Olam Olam's to hire the very best people irrespective of their geographical location.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Olam Olam's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Olam Olam's 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 Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Olam Olam's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Olam Olam's 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. Olam Olam's 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.
Building a culture of innovation
– managers at Olam Olam's 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 Finance & Accounting segment.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Olam Olam's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Olam Olam's has opened avenues for new revenue streams for the organization in the industry. This can help Olam Olam's to build a more holistic ecosystem as suggested in the Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness case study. Olam Olam's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Olam Olam's 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.
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 Olam Olam's 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.
Better consumer reach
– The expansion of the 5G network will help Olam Olam's to increase its market reach. Olam Olam's 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Olam Olam's 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, Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Olam Olam's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Developing new processes and practices
– Olam Olam's can develop new processes and procedures in Finance & Accounting 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 Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness are -
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Olam Olam's needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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 Olam Olam's business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness, Olam Olam's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Shortening product life cycle
– it is one of the major threat that Olam Olam's is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Olam Olam's 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 Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness .
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Olam Olam's in the Finance & Accounting industry. The Finance & Accounting 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.
High dependence on third party suppliers
– Olam Olam's 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.
Environmental challenges
– Olam Olam's 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. Olam Olam's can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Stagnating economy with rate increase
– Olam Olam's 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.
Technology acceleration in Forth Industrial Revolution
– Olam Olam's has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Olam Olam's needs to keep up with the evolution of technology in the Finance & Accounting 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.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Olam Olam's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness 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 Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness 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 Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness 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 Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness 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 Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness 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 Olam Olam's needs to make to build a sustainable competitive advantage.
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