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 – competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, there is backlash against globalization, increasing commodity prices, technology disruption, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, 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 -

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.

Analytics focus

– SOM Distilleries Breweries 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 Beverages (Alcoholic) 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.

Sustainable margins compare to other players in Beverages (Alcoholic) industry

– SOM Distilleries Breweries has clearly differentiated products in the market place. This has enabled SOM Distilleries Breweries to fetch slight price premium compare to the competitors in the Beverages (Alcoholic) industry. The sustainable margins have also helped SOM Distilleries Breweries to invest into research and development (R&D) and innovation.

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.

Ability to recruit top talent

– SOM Distilleries Breweries is one of the leading players in the Beverages (Alcoholic) 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

- SOM Distilleries Breweries 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 SOM Distilleries Breweries is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at SOM Distilleries Breweries emphasize – knowledge, initiative, and innovation.

Organizational Resilience of SOM Distilleries Breweries

– The covid-19 pandemic has put organizational resilience at the centre of everthing SOM Distilleries Breweries does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

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.

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.

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.

Superior customer experience

– The customer experience strategy of SOM Distilleries Breweries in Beverages (Alcoholic) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

High switching costs

– The high switching costs that SOM Distilleries Breweries 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.

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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.

Employees’ less understanding of SOM Distilleries Breweries strategy

– From the outside it seems that the employees of SOM Distilleries Breweries don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.

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 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 SOM Distilleries Breweries supply chain. Even after few cautionary changes, SOM Distilleries Breweries is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left SOM Distilleries Breweries vulnerable to further global disruptions in South East Asia.

No frontier risks strategy

– From the 10K / annual statement of SOM Distilleries Breweries, it seems that company is thinking out the frontier risks that can impact Beverages (Alcoholic) industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.

High 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.

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 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 cash cycle compare to competitors

SOM Distilleries Breweries has a high cash cycle compare to other players in the Beverages (Alcoholic) industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Slow to 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.

Ability to respond to the competition

– As the decision making is very deliberative at SOM Distilleries Breweries, in the dynamic environment of Beverages (Alcoholic) industry it has struggled to respond to the nimble upstart competition. SOM Distilleries Breweries has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

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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 -

Creating value in data economy

– The success of analytics program of SOM Distilleries Breweries has opened avenues for new revenue streams for the organization in Beverages (Alcoholic) industry. This can help SOM Distilleries Breweries to build a more holistic ecosystem for SOM Distilleries Breweries products in the Beverages (Alcoholic) industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, SOM Distilleries Breweries 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 SOM Distilleries Breweries to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

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.

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.

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.

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.

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. SOM Distilleries Breweries can explore opportunities that can attract volunteers and are consistent with its mission and vision.

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.

Leveraging digital technologies

– SOM Distilleries Breweries 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.

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.

Learning at scale

– Online learning technologies has now opened space for SOM Distilleries Breweries 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 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.

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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 -

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.

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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, SOM Distilleries Breweries may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Beverages (Alcoholic) sector.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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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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