Charoen Pokphand Indonesia (CPIN) SWOT Analysis / TOWS Matrix / MBA Resources
Food Processing
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Charoen Pokphand Indonesia (Indonesia)
Based on various researches at Oak Spring University , Charoen Pokphand Indonesia is operating in a macro-environment that has been destablized by – geopolitical disruptions, increasing energy prices, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , wage bills are increasing,
talent flight as more people leaving formal jobs, technology disruption, etc
Introduction to SWOT Analysis of Charoen Pokphand Indonesia
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Charoen Pokphand Indonesia can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Charoen Pokphand Indonesia, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Charoen Pokphand Indonesia 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 Charoen Pokphand Indonesia can be done for the following purposes –
1. Strategic planning of Charoen Pokphand Indonesia
2. Improving business portfolio management of Charoen Pokphand Indonesia
3. Assessing feasibility of the new initiative in Indonesia
4. Making a Food Processing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Charoen Pokphand Indonesia
Strengths of Charoen Pokphand Indonesia | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Charoen Pokphand Indonesia are -
Learning organization
- Charoen Pokphand Indonesia 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 Charoen Pokphand Indonesia is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Charoen Pokphand Indonesia emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Charoen Pokphand Indonesia has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Charoen Pokphand Indonesia 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.
Digital Transformation in Food Processing industry
- digital transformation varies from industry to industry. For Charoen Pokphand Indonesia digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Charoen Pokphand Indonesia 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.
Operational resilience
– The operational resilience strategy of Charoen Pokphand Indonesia 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.
Highly skilled collaborators
– Charoen Pokphand Indonesia has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Food Processing industry. Secondly the value chain collaborators of Charoen Pokphand Indonesia have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Charoen Pokphand Indonesia
– The covid-19 pandemic has put organizational resilience at the centre of everthing Charoen Pokphand Indonesia does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Charoen Pokphand Indonesia is one of the most innovative firm in Food Processing sector.
Analytics focus
– Charoen Pokphand Indonesia 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 Indonesia 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.
Ability to lead change in Food Processing
– Charoen Pokphand Indonesia is one of the leading players in the Food Processing industry in Indonesia. Over the years it has not only transformed the business landscape in the Food Processing industry in Indonesia but also across the existing markets. The ability to lead change has enabled Charoen Pokphand Indonesia in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Charoen Pokphand Indonesia has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Charoen Pokphand Indonesia to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Charoen Pokphand Indonesia is one of the leading players in the Food Processing industry in Indonesia. It is in a position to attract the best talent available in Indonesia. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Charoen Pokphand Indonesia has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Charoen Pokphand Indonesia 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.
Weaknesses of Charoen Pokphand Indonesia | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Charoen Pokphand Indonesia are -
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 Charoen Pokphand Indonesia supply chain. Even after few cautionary changes, Charoen Pokphand Indonesia is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Charoen Pokphand Indonesia vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Charoen Pokphand Indonesia 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. Charoen Pokphand Indonesia should strive to include more intangible value offerings along with its core products and services.
High dependence on Charoen Pokphand Indonesia ‘s star products
– The top 2 products and services of Charoen Pokphand Indonesia still accounts for major business revenue. This dependence on star products in Food Processing industry has resulted into insufficient focus on developing new products, even though Charoen Pokphand Indonesia has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Charoen Pokphand Indonesia 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.
Increasing silos among functional specialists
– The organizational structure of Charoen Pokphand Indonesia is dominated by functional specialists. It is not different from other players in the Food Processing industry, but Charoen Pokphand Indonesia needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Charoen Pokphand Indonesia to focus more on services in the Food Processing industry rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Charoen Pokphand Indonesia 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. Charoen Pokphand Indonesia 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.
Employees’ less understanding of Charoen Pokphand Indonesia strategy
– From the outside it seems that the employees of Charoen Pokphand Indonesia 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, Charoen Pokphand Indonesia 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 Charoen Pokphand Indonesia lucrative customers.
Aligning sales with marketing
– From the outside it seems that Charoen Pokphand Indonesia 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 Charoen Pokphand Indonesia can leverage the sales team experience to cultivate customer relationships as Charoen Pokphand Indonesia is planning to shift buying processes online.
Interest costs
– Compare to the competition, Charoen Pokphand Indonesia 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.
Ability to respond to the competition
– As the decision making is very deliberative at Charoen Pokphand Indonesia, in the dynamic environment of Food Processing industry it has struggled to respond to the nimble upstart competition. Charoen Pokphand Indonesia has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Charoen Pokphand Indonesia Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Charoen Pokphand Indonesia are -
Loyalty marketing
– Charoen Pokphand Indonesia 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.
Using analytics as competitive advantage
– Charoen Pokphand Indonesia has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Food Processing sector. This continuous investment in analytics has enabled Charoen Pokphand Indonesia to build a competitive advantage using analytics. The analytics driven competitive advantage can help Charoen Pokphand Indonesia to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Food Processing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Charoen Pokphand Indonesia 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. Charoen Pokphand Indonesia 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.
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 Charoen Pokphand Indonesia 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Charoen Pokphand Indonesia 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.
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. Charoen Pokphand Indonesia can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Charoen Pokphand Indonesia 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Charoen Pokphand Indonesia is facing challenges because of the dominance of functional experts in the organization. Charoen Pokphand Indonesia 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Charoen Pokphand Indonesia can use these opportunities to build new business models that can help the communities that Charoen Pokphand Indonesia operates in. Secondly it can use opportunities from government spending in Food Processing sector.
Developing new processes and practices
– Charoen Pokphand Indonesia 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.
Building a culture of innovation
– managers at Charoen Pokphand Indonesia 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.
Learning at scale
– Online learning technologies has now opened space for Charoen Pokphand Indonesia 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.
Better consumer reach
– The expansion of the 5G network will help Charoen Pokphand Indonesia to increase its market reach. Charoen Pokphand Indonesia 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.
Threats Charoen Pokphand Indonesia External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Charoen Pokphand Indonesia are -
Stagnating economy with rate increase
– Charoen Pokphand Indonesia 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Charoen Pokphand Indonesia 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 Charoen Pokphand Indonesia in the Food Processing sector and impact the bottomline of the organization.
Consumer confidence and its impact on Charoen Pokphand Indonesia 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 Charoen Pokphand Indonesia with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Food Processing sector.
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 Charoen Pokphand Indonesia.
Regulatory challenges
– Charoen Pokphand Indonesia 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.
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. Charoen Pokphand Indonesia 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.
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 Charoen Pokphand Indonesia business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Charoen Pokphand Indonesia is facing in Food Processing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Charoen Pokphand Indonesia has witnessed rapid integration of technology during Covid-19 in the Food Processing industry. As one of the leading players in the industry, Charoen Pokphand Indonesia needs to keep up with the evolution of technology in the Food Processing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Increasing wage structure of Charoen Pokphand Indonesia
– 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 Charoen Pokphand Indonesia.
Environmental challenges
– Charoen Pokphand Indonesia 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. Charoen Pokphand Indonesia can take advantage of this fund but it will also bring new competitors in the Food Processing industry.
Weighted SWOT Analysis of Charoen Pokphand Indonesia Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Charoen Pokphand Indonesia 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 Charoen Pokphand Indonesia 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 Charoen Pokphand Indonesia 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 Charoen Pokphand Indonesia 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 Charoen Pokphand Indonesia needs to make to build a sustainable competitive advantage.
