SWOT Analysis / TOWS Matrix for Bannari Amman Sugars (India)
Based on various researches at Oak Spring University , Bannari Amman Sugars is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, wage bills are increasing, geopolitical disruptions, technology disruption, central banks are concerned over increasing inflation,
banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Bannari Amman Sugars
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Bannari Amman Sugars can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bannari Amman Sugars, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bannari Amman Sugars 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 Bannari Amman Sugars can be done for the following purposes –
1. Strategic planning of Bannari Amman Sugars
2. Improving business portfolio management of Bannari Amman Sugars
3. Assessing feasibility of the new initiative in India
4. Making a Food Processing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Bannari Amman Sugars
Strengths of Bannari Amman Sugars | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bannari Amman Sugars are -
High brand equity
– Bannari Amman Sugars has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bannari Amman Sugars to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Bannari Amman Sugars is one of the most innovative firm in Food Processing sector.
Training and development
– Bannari Amman Sugars 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.
Diverse revenue streams
– Bannari Amman Sugars is present in almost all the verticals within the Food Processing industry. This has provided Bannari Amman Sugars 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.
Low bargaining power of suppliers
– Suppliers of Bannari Amman Sugars in the Consumer/Non-Cyclical sector have low bargaining power. Bannari Amman Sugars has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bannari Amman Sugars to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Food Processing
– Bannari Amman Sugars is one of the leading players in the Food Processing industry in India. Over the years it has not only transformed the business landscape in the Food Processing industry in India but also across the existing markets. The ability to lead change has enabled Bannari Amman Sugars in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Bannari Amman Sugars has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Bannari Amman Sugars 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.
Effective Research and Development (R&D)
– Bannari Amman Sugars has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Bannari Amman Sugars staying ahead in the Food Processing industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy of Bannari Amman Sugars comprises – understanding the underlying the factors in the Food Processing 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.
High switching costs
– The high switching costs that Bannari Amman Sugars 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.
Analytics focus
– Bannari Amman Sugars 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 Food Processing industry. The technology infrastructure of India is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Digital Transformation in Food Processing industry
- digital transformation varies from industry to industry. For Bannari Amman Sugars digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Bannari Amman Sugars 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.
Weaknesses of Bannari Amman Sugars | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Bannari Amman Sugars are -
Skills based hiring in Food Processing industry
– The stress on hiring functional specialists at Bannari Amman Sugars 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 dependence on Bannari Amman Sugars ‘s star products
– The top 2 products and services of Bannari Amman Sugars still accounts for major business revenue. This dependence on star products in Food Processing industry has resulted into insufficient focus on developing new products, even though Bannari Amman Sugars has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Bannari Amman Sugars is dominated by functional specialists. It is not different from other players in the Food Processing industry, but Bannari Amman Sugars needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Bannari Amman Sugars to focus more on services in the Food Processing industry rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative at Bannari Amman Sugars, in the dynamic environment of Food Processing industry it has struggled to respond to the nimble upstart competition. Bannari Amman Sugars has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, Bannari Amman Sugars has high operating costs in the Food Processing industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Bannari Amman Sugars lucrative customers.
Lack of clear differentiation of Bannari Amman Sugars products
– To increase the profitability and margins on the products, Bannari Amman Sugars needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– From the outside it seems that Bannari Amman Sugars needs to have more collaboration between its sales team and marketing team. Sales professionals in the Food Processing industry have deep experience in developing customer relationships. Marketing department at Bannari Amman Sugars can leverage the sales team experience to cultivate customer relationships as Bannari Amman Sugars is planning to shift buying processes online.
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 Bannari Amman Sugars supply chain. Even after few cautionary changes, Bannari Amman Sugars is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Bannari Amman Sugars vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of India, Bannari Amman Sugars needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners in Food Processing industry
– because of the regulatory requirements in India, Bannari Amman Sugars 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 Food Processing industry.
Slow decision making process
– As mentioned earlier in the report, Bannari Amman Sugars has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Food Processing industry over the last five years. Bannari Amman Sugars 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.
Bannari Amman Sugars Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Bannari Amman Sugars 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 Bannari Amman Sugars 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.
Loyalty marketing
– Bannari Amman Sugars 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, Bannari Amman Sugars 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.
Manufacturing automation
– Bannari Amman Sugars can use the latest technology developments to improve its manufacturing and designing process in Food Processing 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Food Processing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Bannari Amman Sugars 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. Bannari Amman Sugars 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Bannari Amman Sugars can use these opportunities to build new business models that can help the communities that Bannari Amman Sugars operates in. Secondly it can use opportunities from government spending in Food Processing sector.
Better consumer reach
– The expansion of the 5G network will help Bannari Amman Sugars to increase its market reach. Bannari Amman Sugars 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Bannari Amman Sugars in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Food Processing industry, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Bannari Amman Sugars has opened avenues for new revenue streams for the organization in Food Processing industry. This can help Bannari Amman Sugars to build a more holistic ecosystem for Bannari Amman Sugars products in the Food Processing industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Bannari Amman Sugars 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.
Building a culture of innovation
– managers at Bannari Amman Sugars 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 Food Processing industry.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Food Processing industry, but it has also influenced the consumer preferences. Bannari Amman Sugars can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Bannari Amman Sugars 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.
Threats Bannari Amman Sugars External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Bannari Amman Sugars are -
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 Bannari Amman Sugars business can come under increasing regulations regarding data privacy, data security, etc.
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.
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 Bannari Amman Sugars.
Increasing wage structure of Bannari Amman Sugars
– 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 Bannari Amman Sugars.
Technology acceleration in Forth Industrial Revolution
– Bannari Amman Sugars has witnessed rapid integration of technology during Covid-19 in the Food Processing industry. As one of the leading players in the industry, Bannari Amman Sugars needs to keep up with the evolution of technology in the Food Processing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Bannari Amman Sugars in the Food Processing sector and impact the bottomline of the organization.
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. Bannari Amman Sugars needs to understand the core reasons impacting the Food Processing industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Food Processing industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Bannari Amman Sugars can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Food Processing industry are lowering. It can presents Bannari Amman Sugars with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Food Processing 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Bannari Amman Sugars 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 Bannari Amman Sugars prominent markets.
Consumer confidence and its impact on Bannari Amman Sugars demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in Food Processing industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Bannari Amman Sugars may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Food Processing sector.
Weighted SWOT Analysis of Bannari Amman Sugars Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Bannari Amman Sugars 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 Bannari Amman Sugars 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 Bannari Amman Sugars 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 Bannari Amman Sugars 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 Bannari Amman Sugars needs to make to build a sustainable competitive advantage.