Case Study Description of VP Group: Vegpro Grows Beyond Kenya
In 2013, Kenyan horticulture producer and exporter VP Group is weighing potential expansion opportunities against the growing risks in its production and export markets. With $121 million in 2012 revenues, VP Group has grown rapidly in recent years by expanding its vegetable and flower production beyond Kenya into Ethiopia and Ghana; exploring new products such as sugar; and vertically integrating by bringing marketing and logistics operations in-house. The company's leadership is excited about future growth opportunities but also concerned about the impact of VP Group's growth on its entrepreneurial culture. The company also faces increasing cost pressures due to rising costs in Kenya and flat prices in U.K. supermarkets, its main buyers. VP Group's size, vertical integration, and focus on sustainability leave it well positioned as a long-term partner to U.K. supermarkets, but changes to the overall operating environment might require the company to rethink its strategy.
Swot Analysis of "VP Group: Vegpro Grows Beyond Kenya" written by Jose B. Alvarez, Natalie Kindred includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Vp Kenya facing as an external strategic factors. Some of the topics covered in VP Group: Vegpro Grows Beyond Kenya case study are - Strategic Management Strategies, Entrepreneurship, Growth strategy, Labor, Marketing, Mergers & acquisitions, Risk management, Supply chain and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the VP Group: Vegpro Grows Beyond Kenya casestudy better are - – technology disruption, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing household debt because of falling income levels, wage bills are increasing, etc
Introduction to SWOT Analysis of VP Group: Vegpro Grows Beyond Kenya
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in VP Group: Vegpro Grows Beyond Kenya case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Vp Kenya, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Vp Kenya 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 VP Group: Vegpro Grows Beyond Kenya can be done for the following purposes –
1. Strategic planning using facts provided in VP Group: Vegpro Grows Beyond Kenya case study
2. Improving business portfolio management of Vp Kenya
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 Vp Kenya
Strengths VP Group: Vegpro Grows Beyond Kenya | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Vp Kenya in VP Group: Vegpro Grows Beyond Kenya Harvard Business Review case study are -
Organizational Resilience of Vp Kenya
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Vp Kenya does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Vp Kenya has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Vp Kenya 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.
Analytics focus
– Vp Kenya 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.
Training and development
– Vp Kenya has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in VP Group: Vegpro Grows Beyond Kenya 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.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Vp Kenya digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Vp Kenya 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.
Low bargaining power of suppliers
– Suppliers of Vp Kenya in the sector have low bargaining power. VP Group: Vegpro Grows Beyond Kenya has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Vp Kenya to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Vp Kenya 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 VP Group: Vegpro Grows Beyond Kenya HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Vp Kenya is present in almost all the verticals within the industry. This has provided firm in VP Group: Vegpro Grows Beyond Kenya 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.
Operational resilience
– The operational resilience strategy in the VP Group: Vegpro Grows Beyond Kenya 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)
– Vp Kenya 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 VP Group: Vegpro Grows Beyond Kenya - 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 Innovation & Entrepreneurship field
– Vp Kenya 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 Vp Kenya in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Vp Kenya 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.
Weaknesses VP Group: Vegpro Grows Beyond Kenya | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of VP Group: Vegpro Grows Beyond Kenya are -
Products dominated business model
– Even though Vp Kenya 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 - VP Group: Vegpro Grows Beyond Kenya should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Vp Kenya has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Vp Kenya is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study VP Group: Vegpro Grows Beyond Kenya can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– It come across in the case study VP Group: Vegpro Grows Beyond Kenya 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 VP Group: Vegpro Grows Beyond Kenya can leverage the sales team experience to cultivate customer relationships as Vp Kenya is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study VP Group: Vegpro Grows Beyond Kenya has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Vp Kenya 's lucrative customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study VP Group: Vegpro Grows Beyond Kenya, it seems that the employees of Vp Kenya 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.
High cash cycle compare to competitors
Vp Kenya 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.
No frontier risks strategy
– After analyzing the HBR case study VP Group: Vegpro Grows Beyond Kenya, 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study VP Group: Vegpro Grows Beyond Kenya, in the dynamic environment Vp Kenya has struggled to respond to the nimble upstart competition. Vp Kenya 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 Vp Kenya supply chain. Even after few cautionary changes mentioned in the HBR case study - VP Group: Vegpro Grows Beyond Kenya, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Vp Kenya vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Vp Kenya has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Opportunities VP Group: Vegpro Grows Beyond Kenya | 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 VP Group: Vegpro Grows Beyond Kenya are -
Loyalty marketing
– Vp Kenya 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Vp Kenya 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.
Creating value in data economy
– The success of analytics program of Vp Kenya has opened avenues for new revenue streams for the organization in the industry. This can help Vp Kenya to build a more holistic ecosystem as suggested in the VP Group: Vegpro Grows Beyond Kenya case study. Vp Kenya can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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, Vp Kenya can use these opportunities to build new business models that can help the communities that Vp Kenya operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Developing new processes and practices
– Vp Kenya can develop new processes and procedures in Innovation & Entrepreneurship 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Vp Kenya 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.
Learning at scale
– Online learning technologies has now opened space for Vp Kenya 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Vp Kenya 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. Vp Kenya 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.
Better consumer reach
– The expansion of the 5G network will help Vp Kenya to increase its market reach. Vp Kenya 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Vp Kenya in the consumer business. Now Vp Kenya can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Vp Kenya can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Vp Kenya 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Vp Kenya 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, VP Group: Vegpro Grows Beyond Kenya, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats VP Group: Vegpro Grows Beyond Kenya External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study VP Group: Vegpro Grows Beyond Kenya are -
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.
Shortening product life cycle
– it is one of the major threat that Vp Kenya is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Vp Kenya 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.
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. Vp Kenya 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.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Vp Kenya can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Vp Kenya 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. Vp Kenya can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
High dependence on third party suppliers
– Vp Kenya 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.
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 Vp Kenya business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Vp Kenya 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 VP Group: Vegpro Grows Beyond Kenya .
Stagnating economy with rate increase
– Vp Kenya 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.
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 Vp Kenya in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Vp Kenya has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Vp Kenya 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Vp Kenya with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of VP Group: Vegpro Grows Beyond Kenya 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 VP Group: Vegpro Grows Beyond Kenya 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 VP Group: Vegpro Grows Beyond Kenya 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 VP Group: Vegpro Grows Beyond Kenya 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 VP Group: Vegpro Grows Beyond Kenya 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 Vp Kenya needs to make to build a sustainable competitive advantage.