SOM Distilleries Breweries (SDB) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for SOM Distilleries Breweries (India)

Based on various researches at Oak Spring University , SOM Distilleries Breweries is operating in a macro-environment that has been destablized by – there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, increasing energy prices, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, etc

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Introduction to SWOT Analysis of SOM Distilleries Breweries

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that SOM Distilleries Breweries can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the SOM Distilleries Breweries, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which SOM Distilleries Breweries 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of SOM Distilleries Breweries can be done for the following purposes –
1. Strategic planning of SOM Distilleries Breweries
2. Improving business portfolio management of SOM Distilleries Breweries
3. Assessing feasibility of the new initiative in India
4. Making a Beverages (Alcoholic) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of SOM Distilleries Breweries

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Strengths of SOM Distilleries Breweries | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of SOM Distilleries Breweries are -

Effective Research and Development (R&D)

– SOM Distilleries Breweries has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – SOM Distilleries Breweries staying ahead in the Beverages (Alcoholic) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Innovation driven organization

– SOM Distilleries Breweries is one of the most innovative firm in Beverages (Alcoholic) sector.

Low bargaining power of suppliers

– Suppliers of SOM Distilleries Breweries in the Consumer/Non-Cyclical sector have low bargaining power. SOM Distilleries Breweries has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps SOM Distilleries Breweries to manage not only supply disruptions but also source products at highly competitive prices.

High brand equity

– SOM Distilleries Breweries has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled SOM Distilleries Breweries to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Ability to lead change in Beverages (Alcoholic)

– SOM Distilleries Breweries is one of the leading players in the Beverages (Alcoholic) industry in India. Over the years it has not only transformed the business landscape in the Beverages (Alcoholic) industry in India but also across the existing markets. The ability to lead change has enabled SOM Distilleries Breweries in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Operational resilience

– The operational resilience strategy of SOM Distilleries Breweries comprises – understanding the underlying the factors in the Beverages (Alcoholic) 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.

Digital Transformation in Beverages (Alcoholic) industry

- digital transformation varies from industry to industry. For SOM Distilleries Breweries digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. SOM Distilleries Breweries 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.

Diverse revenue streams

– SOM Distilleries Breweries is present in almost all the verticals within the Beverages (Alcoholic) industry. This has provided SOM Distilleries Breweries 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.

Successful track record of launching new products

– SOM Distilleries Breweries has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. SOM Distilleries Breweries 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.

Training and development

– SOM Distilleries Breweries 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.

Strong track record of project management in the Beverages (Alcoholic) industry

– SOM Distilleries Breweries is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Cross disciplinary teams

– Horizontal connected teams at the SOM Distilleries Breweries 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.

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Weaknesses of SOM Distilleries Breweries | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of SOM Distilleries Breweries are -

High bargaining power of channel partners in Beverages (Alcoholic) industry

– because of the regulatory requirements in India, SOM Distilleries Breweries 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 Beverages (Alcoholic) industry.

Slow decision making process

– As mentioned earlier in the report, SOM Distilleries Breweries has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Beverages (Alcoholic) industry over the last five years. SOM Distilleries Breweries 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.

High operating costs

– Compare to the competitors, SOM Distilleries Breweries has high operating costs in the Beverages (Alcoholic) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract SOM Distilleries Breweries lucrative customers.

High dependence on SOM Distilleries Breweries ‘s star products

– The top 2 products and services of SOM Distilleries Breweries still accounts for major business revenue. This dependence on star products in Beverages (Alcoholic) industry has resulted into insufficient focus on developing new products, even though SOM Distilleries Breweries has relatively successful track record of launching new products.

Aligning sales with marketing

– From the outside it seems that SOM Distilleries Breweries needs to have more collaboration between its sales team and marketing team. Sales professionals in the Beverages (Alcoholic) industry have deep experience in developing customer relationships. Marketing department at SOM Distilleries Breweries can leverage the sales team experience to cultivate customer relationships as SOM Distilleries Breweries is planning to shift buying processes online.

Compensation and incentives

– The revenue per employee of SOM Distilleries Breweries is just above the Beverages (Alcoholic) 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.

Low market penetration in new markets

– Outside its home market of India, SOM Distilleries Breweries needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Lack of clear differentiation of SOM Distilleries Breweries products

– To increase the profitability and margins on the products, SOM Distilleries Breweries needs to provide more differentiated products than what it is currently offering in the marketplace.

Skills based hiring in Beverages (Alcoholic) industry

– The stress on hiring functional specialists at SOM Distilleries Breweries 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.

Interest costs

– Compare to the competition, SOM Distilleries Breweries has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.

Slow to strategic competitive environment developments

– As SOM Distilleries Breweries is one of the leading players in the Beverages (Alcoholic) industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Beverages (Alcoholic) industry in last five years.

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SOM Distilleries Breweries Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of SOM Distilleries Breweries are -

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects SOM Distilleries Breweries can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Manufacturing automation

– SOM Distilleries Breweries can use the latest technology developments to improve its manufacturing and designing process in Beverages (Alcoholic) 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, SOM Distilleries Breweries can use these opportunities to build new business models that can help the communities that SOM Distilleries Breweries operates in. Secondly it can use opportunities from government spending in Beverages (Alcoholic) sector.

Lowering marketing communication costs

– 5G expansion will open new opportunities for SOM Distilleries Breweries in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Beverages (Alcoholic) industry, and it will provide faster access to the consumers.

Buying journey improvements

– SOM Distilleries Breweries can improve the customer journey of consumers in the Beverages (Alcoholic) 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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for SOM Distilleries Breweries 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 SOM Distilleries Breweries to hire the very best people irrespective of their geographical location.

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 SOM Distilleries Breweries 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.

Developing new processes and practices

– SOM Distilleries Breweries can develop new processes and procedures in Beverages (Alcoholic) 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.

Loyalty marketing

– SOM Distilleries Breweries 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.

Building a culture of innovation

– managers at SOM Distilleries Breweries 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 Beverages (Alcoholic) industry.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Beverages (Alcoholic) industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. SOM Distilleries Breweries 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. SOM Distilleries Breweries 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.

Better consumer reach

– The expansion of the 5G network will help SOM Distilleries Breweries to increase its market reach. SOM Distilleries Breweries 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, SOM Distilleries Breweries 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.

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Threats SOM Distilleries Breweries External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of SOM Distilleries Breweries are -

Increasing wage structure of SOM Distilleries Breweries

– 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 SOM Distilleries Breweries.

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 SOM Distilleries Breweries in the Beverages (Alcoholic) 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. SOM Distilleries Breweries needs to understand the core reasons impacting the Beverages (Alcoholic) 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. SOM Distilleries Breweries 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.

Consumer confidence and its impact on SOM Distilleries Breweries 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 Beverages (Alcoholic) industry and other sectors.

Environmental challenges

– SOM Distilleries Breweries 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. SOM Distilleries Breweries can take advantage of this fund but it will also bring new competitors in the Beverages (Alcoholic) industry.

Regulatory challenges

– SOM Distilleries Breweries 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 Beverages (Alcoholic) industry regulations.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Beverages (Alcoholic) industry are lowering. It can presents SOM Distilleries Breweries with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Beverages (Alcoholic) sector.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, SOM Distilleries Breweries 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 SOM Distilleries Breweries prominent markets.

Technology acceleration in Forth Industrial Revolution

– SOM Distilleries Breweries has witnessed rapid integration of technology during Covid-19 in the Beverages (Alcoholic) industry. As one of the leading players in the industry, SOM Distilleries Breweries needs to keep up with the evolution of technology in the Beverages (Alcoholic) 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.

Shortening product life cycle

– it is one of the major threat that SOM Distilleries Breweries is facing in Beverages (Alcoholic) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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 SOM Distilleries Breweries business can come under increasing regulations regarding data privacy, data security, etc.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for SOM Distilleries Breweries in Beverages (Alcoholic) industry. The Beverages (Alcoholic) 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.

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Weighted SWOT Analysis of SOM Distilleries Breweries Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at SOM Distilleries Breweries 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 SOM Distilleries Breweries 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 SOM Distilleries Breweries 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 SOM Distilleries Breweries 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 SOM Distilleries Breweries needs to make to build a sustainable competitive advantage.

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