Deji Akinyanju, founder of Nigerian fast-food chain Chicken Republic, and Ayo Oduntan, founder of an integrated Nigerian poultry operation (Amo Byng Group), are among a growing cadre of skilled food-industry entrepreneurs for whom the opportunities to serve the Nigerian market-a population of over 170 million, including a large and growing middle class-outweigh the challenges of operating there. And indeed, as embodied by Nigeria's status as a net food importer despite having 80 million hectares of arable land, the challenges are considerable. Animal feed is excessively expensive, driving up poultry production costs and limiting production volumes; illegal poultry imports pose food safety threats while undercutting prices of domestic product; corruption is rampant; debt is exorbitantly expensive; commercial real estate is sparse; and electricity is unreliable. Yet, Nigeria has all the natural blessings to be an agricultural powerhouse competitive on an international scale. And it has the large, ambitious population needed to drive its development, both as workers and consumers. Akinyanju and Oduntan believe many of the issues constraining Nigeria's poultry sector can be alleviated with relatively simple solutions-and that doing so can open tremendous growth opportunities for their businesses and the country as a whole. Set in October 2015, this case provides a detailed look at Nigeria's poultry value chain and the complexities of modernizing a traditional and largely informal industry. It also presents an inspiring story of determined entrepreneurs succeeding against tough odds. Finally, for students whose conception of Nigeria is all too often reduced to simplistic headlines, this case offers a more nuanced look into the complexities, potential, and aspirations of what may be one of this century's most dynamic and important economies.
Swot Analysis of "Chicken Republic" written by Jose B. Alvarez, Natalie Kindred includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Poultry Nigeria's facing as an external strategic factors. Some of the topics covered in Chicken Republic case study are - Strategic Management Strategies, Emerging markets, Entrepreneurship, Ethics, Government, Leadership, Marketing, Supply chain and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Chicken Republic casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, wage bills are increasing, increasing transportation and logistics costs, central banks are concerned over increasing inflation, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion,
increasing energy prices, digital marketing is dominated by two big players Facebook and Google, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Chicken Republic case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Poultry Nigeria's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Poultry Nigeria'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 Chicken Republic can be done for the following purposes –
1. Strategic planning using facts provided in Chicken Republic case study
2. Improving business portfolio management of Poultry Nigeria's
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Poultry Nigeria's
Strengths Chicken Republic | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Poultry Nigeria's in Chicken Republic Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Poultry Nigeria'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.
Analytics focus
– Poultry Nigeria'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 Jose B. Alvarez, Natalie Kindred 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.
Ability to lead change in Innovation & Entrepreneurship field
– Poultry Nigeria'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 Poultry Nigeria's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the Chicken Republic 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.
Learning organization
- Poultry Nigeria'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 Poultry Nigeria's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Chicken Republic Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Poultry Nigeria's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Poultry Nigeria'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 Chicken Republic 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
– Poultry Nigeria's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Poultry Nigeria'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.
Innovation driven organization
– Poultry Nigeria's is one of the most innovative firm in sector. Manager in Chicken Republic Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Poultry Nigeria's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Chicken Republic 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)
– Poultry Nigeria'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 Chicken Republic - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Chicken Republic firm has clearly differentiated products in the market place. This has enabled Poultry Nigeria's to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Poultry Nigeria's to invest into research and development (R&D) and innovation.
Weaknesses Chicken Republic | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Chicken Republic are -
Interest costs
– Compare to the competition, Poultry Nigeria's 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.
No frontier risks strategy
– After analyzing the HBR case study Chicken Republic, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Aligning sales with marketing
– It come across in the case study Chicken Republic 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 Chicken Republic can leverage the sales team experience to cultivate customer relationships as Poultry Nigeria's is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As Chicken Republic HBR case study mentions - Poultry Nigeria's 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Chicken Republic, in the dynamic environment Poultry Nigeria's has struggled to respond to the nimble upstart competition. Poultry Nigeria's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Poultry Nigeria's supply chain. Even after few cautionary changes mentioned in the HBR case study - Chicken Republic, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Poultry Nigeria's vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Chicken Republic, it seems that the employees of Poultry Nigeria'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 Chicken Republic, is just above the industry average. Poultry Nigeria'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.
Increasing silos among functional specialists
– The organizational structure of Poultry Nigeria's is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Poultry Nigeria's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Poultry Nigeria's to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Poultry Nigeria'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. Poultry Nigeria'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.
Workers concerns about automation
– As automation is fast increasing in the segment, Poultry Nigeria'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.
Opportunities Chicken Republic | 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 Chicken Republic are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Poultry Nigeria'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, Chicken Republic, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Poultry Nigeria'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 Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Poultry Nigeria's to increase its market reach. Poultry Nigeria'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.
Using analytics as competitive advantage
– Poultry Nigeria'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 Chicken Republic - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Poultry Nigeria's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Poultry Nigeria'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 Innovation & Entrepreneurship segment.
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 Poultry Nigeria'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.
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. Poultry Nigeria's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Poultry Nigeria's 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.
Loyalty marketing
– Poultry Nigeria'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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Poultry Nigeria's is facing challenges because of the dominance of functional experts in the organization. Chicken Republic 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Poultry Nigeria's can use these opportunities to build new business models that can help the communities that Poultry Nigeria's operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Poultry Nigeria's 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 Poultry Nigeria's has opened avenues for new revenue streams for the organization in the industry. This can help Poultry Nigeria's to build a more holistic ecosystem as suggested in the Chicken Republic case study. Poultry Nigeria's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Chicken Republic External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Chicken Republic are -
Consumer confidence and its impact on Poultry Nigeria'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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Poultry Nigeria's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Poultry Nigeria's business can come under increasing regulations regarding data privacy, data security, etc.
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.
Increasing wage structure of Poultry Nigeria'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 Poultry Nigeria's.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Poultry Nigeria'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 Chicken Republic .
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. Poultry Nigeria's 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.
Stagnating economy with rate increase
– Poultry Nigeria'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
– Poultry Nigeria's has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Poultry Nigeria's needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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.
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 Poultry Nigeria's in the Innovation & Entrepreneurship sector and impact the bottomline 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 Poultry Nigeria's in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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.
Environmental challenges
– Poultry Nigeria'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. Poultry Nigeria's can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Weighted SWOT Analysis of Chicken Republic 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 Chicken Republic 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 Chicken Republic 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 Chicken Republic 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 Chicken Republic 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 Poultry Nigeria's needs to make to build a sustainable competitive advantage.
