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 - – geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, talent flight as more people leaving formal jobs, wage bills are increasing, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, 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 -
Strong track record of project management
– Olam Olam's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Finance & Accounting field
– Olam Olam's 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 Olam Olam's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
Operational resilience
– The operational resilience strategy in the Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness 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)
– 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.
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.
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.
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.
Successful track record of launching new products
– Olam Olam's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Olam Olam's 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 recruit top talent
– Olam Olam's is one of the leading recruiters in the industry. Managers in the Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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 -
Skills based hiring
– The stress on hiring functional specialists at Olam Olam's 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.
Low market penetration in new markets
– Outside its home market of Olam Olam's, firm in the HBR case study Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
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.
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.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Kim Wai Ho, Shirley Koh, Yin Kheng Lau suggests that, Olam Olam's 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Olam Olam's 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.
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.
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.
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.
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 -
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.
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Olam Olam's is facing challenges because of the dominance of functional experts in the organization. Olam's Corporate Strategy: Becoming the Most Differentiated and Valuable Global Agribusiness 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.
Loyalty marketing
– Olam Olam's has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, 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.
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.
Manufacturing automation
– Olam Olam's can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Olam Olam's 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.
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.
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.
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 -
Regulatory challenges
– Olam Olam's 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 Finance & Accounting industry regulations.
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 Olam Olam's in the Finance & Accounting sector and impact the bottomline of the organization.
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.
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.
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 .
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.
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.
Increasing wage structure of Olam Olam's
– 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 Olam Olam's.
Consumer confidence and its impact on Olam Olam's 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.
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 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.
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.
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.
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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