SWOT Analysis / TOWS Matrix for Heritage Foods (India)
Based on various researches at Oak Spring University , Heritage Foods is operating in a macro-environment that has been destablized by – technology disruption, central banks are concerned over increasing inflation, wage bills are increasing, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy,
there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Heritage Foods can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Heritage Foods, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Heritage Foods 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 Heritage Foods can be done for the following purposes –
1. Strategic planning of Heritage Foods
2. Improving business portfolio management of Heritage Foods
3. Assessing feasibility of the new initiative in India
4. Making a Fish/Livestock sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Heritage Foods
Strengths of Heritage Foods | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Heritage Foods are -
Digital Transformation in Fish/Livestock industry
- digital transformation varies from industry to industry. For Heritage Foods digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Heritage Foods 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.
Effective Research and Development (R&D)
– Heritage Foods has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Heritage Foods staying ahead in the Fish/Livestock industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Heritage Foods 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 Heritage Foods is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Heritage Foods emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Heritage Foods has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Cross disciplinary teams
– Horizontal connected teams at the Heritage Foods 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.
Successful track record of launching new products
– Heritage Foods has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Heritage Foods has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Ability to recruit top talent
– Heritage Foods is one of the leading players in the Fish/Livestock industry in India. It is in a position to attract the best talent available in India. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Fish/Livestock
– Heritage Foods is one of the leading players in the Fish/Livestock industry in India. Over the years it has not only transformed the business landscape in the Fish/Livestock industry in India but also across the existing markets. The ability to lead change has enabled Heritage Foods in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Heritage Foods
– The covid-19 pandemic has put organizational resilience at the centre of everthing Heritage Foods 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 Heritage Foods in the Consumer/Non-Cyclical sector have low bargaining power. Heritage Foods has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Heritage Foods to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Heritage Foods is one of the most innovative firm in Fish/Livestock sector.
Diverse revenue streams
– Heritage Foods is present in almost all the verticals within the Fish/Livestock industry. This has provided Heritage Foods 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 Heritage Foods | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Heritage Foods are -
No frontier risks strategy
– From the 10K / annual statement of Heritage Foods, it seems that company is thinking out the frontier risks that can impact Fish/Livestock industry. 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 cash cycle compare to competitors
Heritage Foods has a high cash cycle compare to other players in the Fish/Livestock industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Heritage Foods is slow explore the new channels of communication. These new channels of communication can help Heritage Foods to provide better information regarding Fish/Livestock products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Heritage Foods has some of the most successful models in the Fish/Livestock industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Heritage Foods should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the Fish/Livestock industry, Heritage Foods 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.
Skills based hiring in Fish/Livestock industry
– The stress on hiring functional specialists at Heritage Foods has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High bargaining power of channel partners in Fish/Livestock industry
– because of the regulatory requirements in India, Heritage Foods 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 Fish/Livestock industry.
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 Heritage Foods supply chain. Even after few cautionary changes, Heritage Foods is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Heritage Foods vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Heritage Foods has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Fish/Livestock industry over the last five years. Heritage Foods 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.
Compensation and incentives
– The revenue per employee of Heritage Foods is just above the Fish/Livestock 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.
Ability to respond to the competition
– As the decision making is very deliberative at Heritage Foods, in the dynamic environment of Fish/Livestock industry it has struggled to respond to the nimble upstart competition. Heritage Foods has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Heritage Foods Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Heritage Foods are -
Better consumer reach
– The expansion of the 5G network will help Heritage Foods to increase its market reach. Heritage Foods 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.
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 Heritage Foods 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.
Creating value in data economy
– The success of analytics program of Heritage Foods has opened avenues for new revenue streams for the organization in Fish/Livestock industry. This can help Heritage Foods to build a more holistic ecosystem for Heritage Foods products in the Fish/Livestock industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Heritage Foods to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Heritage Foods to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Heritage Foods can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Heritage Foods can use these opportunities to build new business models that can help the communities that Heritage Foods operates in. Secondly it can use opportunities from government spending in Fish/Livestock sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Heritage Foods in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Fish/Livestock industry, and it will provide faster access to the consumers.
Manufacturing automation
– Heritage Foods can use the latest technology developments to improve its manufacturing and designing process in Fish/Livestock sector. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Building a culture of innovation
– managers at Heritage Foods 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 Fish/Livestock industry.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Heritage Foods is facing challenges because of the dominance of functional experts in the organization. Heritage Foods can utilize new technology in the field of Fish/Livestock industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Use of Bitcoin and other crypto currencies for transactions in Fish/Livestock industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Heritage Foods in the Fish/Livestock industry. Now Heritage Foods can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Heritage Foods 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.
Buying journey improvements
– Heritage Foods can improve the customer journey of consumers in the Fish/Livestock 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.
Threats Heritage Foods External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Heritage Foods are -
Increasing wage structure of Heritage Foods
– 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 Heritage Foods.
High dependence on third party suppliers
– Heritage Foods 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.
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 Heritage Foods in the Fish/Livestock sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in Fish/Livestock industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Heritage Foods 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, Heritage Foods 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 Heritage Foods prominent markets.
Environmental challenges
– Heritage Foods 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. Heritage Foods can take advantage of this fund but it will also bring new competitors in the Fish/Livestock industry.
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. Heritage Foods needs to understand the core reasons impacting the Fish/Livestock industry. This will help it in building a better workplace.
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. Heritage Foods 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.
Regulatory challenges
– Heritage Foods 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 Fish/Livestock industry regulations.
Shortening product life cycle
– it is one of the major threat that Heritage Foods is facing in Fish/Livestock sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Heritage Foods has witnessed rapid integration of technology during Covid-19 in the Fish/Livestock industry. As one of the leading players in the industry, Heritage Foods needs to keep up with the evolution of technology in the Fish/Livestock 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 to Fish/Livestock industry are lowering. It can presents Heritage Foods with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Fish/Livestock sector.
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 Heritage Foods Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Heritage Foods 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 Heritage Foods 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 Heritage Foods 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 Heritage Foods 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 Heritage Foods needs to make to build a sustainable competitive advantage.