SWOT Analysis / TOWS Matrix for Agro Tech Foods (India)
Based on various researches at Oak Spring University , Agro Tech Foods is operating in a macro-environment that has been destablized by – there is backlash against globalization, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, increasing energy prices,
there is increasing trade war between United States & China, technology disruption, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Agro Tech Foods can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Agro Tech Foods, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Agro Tech 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 Agro Tech Foods can be done for the following purposes –
1. Strategic planning of Agro Tech Foods
2. Improving business portfolio management of Agro Tech Foods
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 Agro Tech Foods
Strengths of Agro Tech Foods | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Agro Tech Foods are -
Strong track record of project management in the Food Processing industry
– Agro Tech Foods is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Food Processing industry
– Agro Tech Foods has clearly differentiated products in the market place. This has enabled Agro Tech Foods to fetch slight price premium compare to the competitors in the Food Processing industry. The sustainable margins have also helped Agro Tech Foods to invest into research and development (R&D) and innovation.
Ability to lead change in Food Processing
– Agro Tech Foods 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 Agro Tech Foods in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Agro Tech 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 Agro Tech 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.
Learning organization
- Agro Tech 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 Agro Tech Foods is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Agro Tech Foods emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy of Agro Tech Foods 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.
Effective Research and Development (R&D)
– Agro Tech Foods has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Agro Tech Foods 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.
Superior customer experience
– The customer experience strategy of Agro Tech Foods in Food Processing industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Agro Tech Foods
– The covid-19 pandemic has put organizational resilience at the centre of everthing Agro Tech Foods does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Agro Tech Foods has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Agro Tech Foods to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Agro Tech Foods 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.
Weaknesses of Agro Tech Foods | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Agro Tech Foods are -
Aligning sales with marketing
– From the outside it seems that Agro Tech Foods 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 Agro Tech Foods can leverage the sales team experience to cultivate customer relationships as Agro Tech Foods is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Agro Tech Foods is slow explore the new channels of communication. These new channels of communication can help Agro Tech Foods 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 decision making process
– As mentioned earlier in the report, Agro Tech 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 Food Processing industry over the last five years. Agro Tech 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.
Slow to strategic competitive environment developments
– As Agro Tech Foods 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.
Need for greater diversity
– Agro Tech Foods 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.
High operating costs
– Compare to the competitors, Agro Tech Foods 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 Agro Tech Foods lucrative customers.
Low market penetration in new markets
– Outside its home market of India, Agro Tech Foods 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 Agro Tech Foods supply chain. Even after few cautionary changes, Agro Tech Foods is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Agro Tech Foods vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Agro Tech Foods has some of the most successful models in the Food Processing industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Agro Tech Foods should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Agro Tech Foods 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.
Ability to respond to the competition
– As the decision making is very deliberative at Agro Tech Foods, in the dynamic environment of Food Processing industry it has struggled to respond to the nimble upstart competition. Agro Tech Foods has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Agro Tech Foods Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Agro Tech Foods are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Agro Tech Foods 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 Agro Tech Foods 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. Agro Tech Foods can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Agro Tech 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.
Manufacturing automation
– Agro Tech Foods 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.
Building a culture of innovation
– managers at Agro Tech 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 Food Processing industry.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Agro Tech Foods can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Agro Tech Foods is facing challenges because of the dominance of functional experts in the organization. Agro Tech Foods 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.
Developing new processes and practices
– Agro Tech Foods can develop new processes and procedures in Food Processing 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Agro Tech Foods can use these opportunities to build new business models that can help the communities that Agro Tech Foods 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 Agro Tech Foods to increase its market reach. Agro Tech 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Agro Tech 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 Agro Tech Foods to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Agro Tech Foods 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.
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. Agro Tech Foods can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Agro Tech Foods External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Agro Tech Foods 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.
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 Agro Tech Foods business can come under increasing regulations regarding data privacy, data security, etc.
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.
High dependence on third party suppliers
– Agro Tech 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.
Environmental challenges
– Agro Tech 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. Agro Tech Foods can take advantage of this fund but it will also bring new competitors in the Food Processing industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Agro Tech Foods 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.
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 Agro Tech Foods 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. Agro Tech Foods needs to understand the core reasons impacting the Food Processing industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Agro Tech 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 Agro Tech Foods prominent markets.
Consumer confidence and its impact on Agro Tech Foods 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Food Processing industry are lowering. It can presents Agro Tech Foods with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Food Processing sector.
Shortening product life cycle
– it is one of the major threat that Agro Tech Foods is facing in Food Processing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Agro Tech Foods can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Agro Tech Foods Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Agro Tech 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 Agro Tech 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 Agro Tech 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 Agro Tech 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 Agro Tech Foods needs to make to build a sustainable competitive advantage.