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 - – increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, increasing energy prices, there is backlash against globalization, 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, central banks are concerned over increasing inflation, 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 -
Strong track record of project management
– Vp Kenya is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
Ability to recruit top talent
– Vp Kenya is one of the leading recruiters in the industry. Managers in the VP Group: Vegpro Grows Beyond Kenya are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– VP Group: Vegpro Grows Beyond Kenya firm has clearly differentiated products in the market place. This has enabled Vp Kenya to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Vp Kenya to invest into research and development (R&D) and innovation.
Learning organization
- Vp Kenya 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 Vp Kenya is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in VP Group: Vegpro Grows Beyond Kenya Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Vp Kenya in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
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.
Innovation driven organization
– Vp Kenya is one of the most innovative firm in sector. Manager in VP Group: Vegpro Grows Beyond Kenya Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Vp Kenya has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Vp Kenya to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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 -
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.
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.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the VP Group: Vegpro Grows Beyond Kenya HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Vp Kenya has relatively successful track record of launching new products.
Lack of clear differentiation of Vp Kenya products
– To increase the profitability and margins on the products, Vp Kenya needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
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.
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.
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.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Jose B. Alvarez, Natalie Kindred suggests that, Vp Kenya is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Opportunities 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 -
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.
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.
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.
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 Vp Kenya 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.
Leveraging digital technologies
– Vp Kenya 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.
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. Vp Kenya can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Vp Kenya can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Vp Kenya can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. VP Group: Vegpro Grows Beyond Kenya 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.
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.
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.
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 -
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.
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.
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.
Increasing wage structure of Vp Kenya
– 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 Vp Kenya.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study VP Group: Vegpro Grows Beyond Kenya, Vp Kenya may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Vp Kenya.
Regulatory challenges
– Vp Kenya 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 Innovation & Entrepreneurship industry regulations.
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.
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 .
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.
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.
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.
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.
