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 – technology disruption, increasing energy prices, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, supply chains are disrupted by pandemic ,
there is increasing trade war between United States & China, geopolitical disruptions, 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 -
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.
Strong track record of project management in the Food Processing industry
– Bannari Amman Sugars is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
Innovation driven organization
– Bannari Amman Sugars is one of the most innovative firm in Food Processing sector.
Cross disciplinary teams
– Horizontal connected teams at the Bannari Amman Sugars 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.
Sustainable margins compare to other players in Food Processing industry
– Bannari Amman Sugars has clearly differentiated products in the market place. This has enabled Bannari Amman Sugars to fetch slight price premium compare to the competitors in the Food Processing industry. The sustainable margins have also helped Bannari Amman Sugars to invest into research and development (R&D) and innovation.
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.
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.
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.
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.
Ability to recruit top talent
– Bannari Amman Sugars is one of the leading players in the Food Processing 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.
Learning organization
- Bannari Amman Sugars 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 Bannari Amman Sugars is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Bannari Amman Sugars emphasize – knowledge, initiative, and innovation.
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 -
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.
Compensation and incentives
– The revenue per employee of Bannari Amman Sugars is just above the Food Processing 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.
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 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.
No frontier risks strategy
– From the 10K / annual statement of Bannari Amman Sugars, it seems that company is thinking out the frontier risks that can impact Food Processing 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Bannari Amman Sugars is slow explore the new channels of communication. These new channels of communication can help Bannari Amman Sugars to provide better information regarding Food Processing products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As Bannari Amman Sugars is one of the leading players in the Food Processing industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Food Processing industry in last five years.
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 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.
Capital Spending Reduction
– Even during the low interest decade, Bannari Amman Sugars 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 Food Processing industry using digital technology.
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.
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 -
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.
Use of Bitcoin and other crypto currencies for transactions in Food Processing industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Bannari Amman Sugars in the Food Processing industry. Now Bannari Amman Sugars can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Bannari Amman Sugars is facing challenges because of the dominance of functional experts in the organization. Bannari Amman Sugars can utilize new technology in the field of Food Processing industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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.
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.
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.
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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Bannari Amman Sugars can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Bannari Amman Sugars 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 Bannari Amman Sugars to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Bannari Amman Sugars can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 -
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.
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.
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.
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.
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. Bannari Amman Sugars 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.
Shortening product life cycle
– it is one of the major threat that Bannari Amman Sugars is facing in Food Processing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Bannari Amman Sugars 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 Food Processing industry.
Regulatory challenges
– Bannari Amman Sugars 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 Food Processing industry regulations.
Environmental challenges
– Bannari Amman Sugars 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. Bannari Amman Sugars can take advantage of this fund but it will also bring new competitors in the Food Processing 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. Bannari Amman Sugars needs to understand the core reasons impacting the Food Processing industry. This will help it in building a better workplace.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Bannari Amman Sugars in Food Processing industry. The Food Processing 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.
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.
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.