Godfrey Phillips India (GDFR) SWOT Analysis / TOWS Matrix / MBA Resources
Tobacco
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Godfrey Phillips India (India)
Based on various researches at Oak Spring University , Godfrey Phillips India is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, there is increasing trade war between United States & China,
increasing government debt because of Covid-19 spendings, there is backlash against globalization, etc
Introduction to SWOT Analysis of Godfrey Phillips India
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Godfrey Phillips India can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Godfrey Phillips India, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Godfrey Phillips India 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 Godfrey Phillips India can be done for the following purposes –
1. Strategic planning of Godfrey Phillips India
2. Improving business portfolio management of Godfrey Phillips India
3. Assessing feasibility of the new initiative in India
4. Making a Tobacco sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Godfrey Phillips India
Strengths of Godfrey Phillips India | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Godfrey Phillips India are -
Low bargaining power of suppliers
– Suppliers of Godfrey Phillips India in the Consumer/Non-Cyclical sector have low bargaining power. Godfrey Phillips India has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Godfrey Phillips India to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Tobacco industry
- digital transformation varies from industry to industry. For Godfrey Phillips India digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Godfrey Phillips India 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.
Training and development
– Godfrey Phillips India has one of the best training and development program in Consumer/Non-Cyclical industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Operational resilience
– The operational resilience strategy of Godfrey Phillips India comprises – understanding the underlying the factors in the Tobacco 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.
Innovation driven organization
– Godfrey Phillips India is one of the most innovative firm in Tobacco sector.
Highly skilled collaborators
– Godfrey Phillips India has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Tobacco industry. Secondly the value chain collaborators of Godfrey Phillips India have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Tobacco
– Godfrey Phillips India is one of the leading players in the Tobacco industry in India. Over the years it has not only transformed the business landscape in the Tobacco industry in India but also across the existing markets. The ability to lead change has enabled Godfrey Phillips India in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Godfrey Phillips India in Tobacco industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Godfrey Phillips India has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Godfrey Phillips India 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.
High brand equity
– Godfrey Phillips India has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Godfrey Phillips India to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Godfrey Phillips India
– The covid-19 pandemic has put organizational resilience at the centre of everthing Godfrey Phillips India does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Godfrey Phillips India is present in almost all the verticals within the Tobacco industry. This has provided Godfrey Phillips India 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 of Godfrey Phillips India | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Godfrey Phillips India 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 Godfrey Phillips India supply chain. Even after few cautionary changes, Godfrey Phillips India is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Godfrey Phillips India vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the Tobacco industry, Godfrey Phillips India 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.
High cash cycle compare to competitors
Godfrey Phillips India has a high cash cycle compare to other players in the Tobacco industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Compensation and incentives
– The revenue per employee of Godfrey Phillips India is just above the Tobacco industry average. It 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.
Need for greater diversity
– Godfrey Phillips India 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.
Lack of clear differentiation of Godfrey Phillips India products
– To increase the profitability and margins on the products, Godfrey Phillips India needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Godfrey Phillips India has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Tobacco industry over the last five years. Godfrey Phillips India 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 Godfrey Phillips India has some of the most successful models in the Tobacco industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Godfrey Phillips India should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– From the outside it seems that Godfrey Phillips India needs to have more collaboration between its sales team and marketing team. Sales professionals in the Tobacco industry have deep experience in developing customer relationships. Marketing department at Godfrey Phillips India can leverage the sales team experience to cultivate customer relationships as Godfrey Phillips India is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of India, Godfrey Phillips India needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on Godfrey Phillips India ‘s star products
– The top 2 products and services of Godfrey Phillips India still accounts for major business revenue. This dependence on star products in Tobacco industry has resulted into insufficient focus on developing new products, even though Godfrey Phillips India has relatively successful track record of launching new products.
Godfrey Phillips India Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Godfrey Phillips India are -
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 Godfrey Phillips India 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Godfrey Phillips India in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Tobacco industry, and it will provide faster access to the consumers.
Learning at scale
– Online learning technologies has now opened space for Godfrey Phillips India 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.
Developing new processes and practices
– Godfrey Phillips India can develop new processes and procedures in Tobacco 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.
Buying journey improvements
– Godfrey Phillips India can improve the customer journey of consumers in the Tobacco industry by using analytics and artificial intelligence. It 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Godfrey Phillips India 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 Godfrey Phillips India to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Godfrey Phillips India has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Tobacco sector. This continuous investment in analytics has enabled Godfrey Phillips India to build a competitive advantage using analytics. The analytics driven competitive advantage can help Godfrey Phillips India to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Godfrey Phillips India 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.
Building a culture of innovation
– managers at Godfrey Phillips India 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 Tobacco industry.
Better consumer reach
– The expansion of the 5G network will help Godfrey Phillips India to increase its market reach. Godfrey Phillips India 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Godfrey Phillips India can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Tobacco industry, but it has also influenced the consumer preferences. Godfrey Phillips India can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Godfrey Phillips India 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.
Threats Godfrey Phillips India External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Godfrey Phillips India are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Godfrey Phillips India in Tobacco industry. The Tobacco 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.
Increasing wage structure of Godfrey Phillips India
– 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 Godfrey Phillips India.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Godfrey Phillips India may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Tobacco sector.
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 Godfrey Phillips India in the Tobacco sector and impact the bottomline of the organization.
Regulatory challenges
– Godfrey Phillips India 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 Tobacco industry regulations.
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. Godfrey Phillips India 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 Tobacco industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Godfrey Phillips India can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Godfrey Phillips India 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 Godfrey Phillips India prominent markets.
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 Godfrey Phillips India.
Shortening product life cycle
– it is one of the major threat that Godfrey Phillips India is facing in Tobacco sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Godfrey Phillips India needs to understand the core reasons impacting the Tobacco industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Tobacco industry are lowering. It can presents Godfrey Phillips India with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Tobacco sector.
Environmental challenges
– Godfrey Phillips India 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. Godfrey Phillips India can take advantage of this fund but it will also bring new competitors in the Tobacco industry.
Weighted SWOT Analysis of Godfrey Phillips India Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Godfrey Phillips India 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 Godfrey Phillips India 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 Godfrey Phillips India 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 Godfrey Phillips India 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 Godfrey Phillips India needs to make to build a sustainable competitive advantage.