SWOT Analysis / TOWS Matrix for Victory Supermarket Chain (Israel)
Based on various researches at Oak Spring University , Victory Supermarket Chain is operating in a macro-environment that has been destablized by – wage bills are increasing, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, central banks are concerned over increasing inflation, increasing energy prices, cloud computing is disrupting traditional business models,
challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Victory Supermarket Chain
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Victory Supermarket Chain can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Victory Supermarket Chain, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Victory Supermarket Chain 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 Victory Supermarket Chain can be done for the following purposes –
1. Strategic planning of Victory Supermarket Chain
2. Improving business portfolio management of Victory Supermarket Chain
3. Assessing feasibility of the new initiative in Israel
4. Making a Retail (Grocery) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Victory Supermarket Chain
Strengths of Victory Supermarket Chain | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Victory Supermarket Chain are -
Successful track record of launching new products
– Victory Supermarket Chain has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Victory Supermarket Chain 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.
High brand equity
– Victory Supermarket Chain has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Victory Supermarket Chain to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Retail (Grocery) industry
- digital transformation varies from industry to industry. For Victory Supermarket Chain digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Victory Supermarket Chain 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.
Cross disciplinary teams
– Horizontal connected teams at the Victory Supermarket Chain 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.
Analytics focus
– Victory Supermarket Chain 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 Retail (Grocery) industry. The technology infrastructure of Israel 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.
Training and development
– Victory Supermarket Chain has one of the best training and development program in Services 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.
Highly skilled collaborators
– Victory Supermarket Chain has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Retail (Grocery) industry. Secondly the value chain collaborators of Victory Supermarket Chain have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Victory Supermarket Chain in the Services sector have low bargaining power. Victory Supermarket Chain has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Victory Supermarket Chain to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Victory Supermarket Chain is one of the leading players in the Retail (Grocery) industry in Israel. It is in a position to attract the best talent available in Israel. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy of Victory Supermarket Chain comprises – understanding the underlying the factors in the Retail (Grocery) 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.
Sustainable margins compare to other players in Retail (Grocery) industry
– Victory Supermarket Chain has clearly differentiated products in the market place. This has enabled Victory Supermarket Chain to fetch slight price premium compare to the competitors in the Retail (Grocery) industry. The sustainable margins have also helped Victory Supermarket Chain to invest into research and development (R&D) and innovation.
Ability to lead change in Retail (Grocery)
– Victory Supermarket Chain is one of the leading players in the Retail (Grocery) industry in Israel. Over the years it has not only transformed the business landscape in the Retail (Grocery) industry in Israel but also across the existing markets. The ability to lead change has enabled Victory Supermarket Chain in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses of Victory Supermarket Chain | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Victory Supermarket Chain are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Victory Supermarket Chain is slow explore the new channels of communication. These new channels of communication can help Victory Supermarket Chain to provide better information regarding Retail (Grocery) products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Victory Supermarket Chain 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.
Workers concerns about automation
– As automation is fast increasing in the Retail (Grocery) industry, Victory Supermarket Chain needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Interest costs
– Compare to the competition, Victory Supermarket Chain 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.
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 Victory Supermarket Chain supply chain. Even after few cautionary changes, Victory Supermarket Chain is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Victory Supermarket Chain vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Victory Supermarket Chain is dominated by functional specialists. It is not different from other players in the Retail (Grocery) industry, but Victory Supermarket Chain needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Victory Supermarket Chain to focus more on services in the Retail (Grocery) industry rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Israel, Victory Supermarket Chain needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Victory Supermarket Chain has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Retail (Grocery) industry over the last five years. Victory Supermarket Chain 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.
Aligning sales with marketing
– From the outside it seems that Victory Supermarket Chain needs to have more collaboration between its sales team and marketing team. Sales professionals in the Retail (Grocery) industry have deep experience in developing customer relationships. Marketing department at Victory Supermarket Chain can leverage the sales team experience to cultivate customer relationships as Victory Supermarket Chain is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee of Victory Supermarket Chain is just above the Retail (Grocery) 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.
High operating costs
– Compare to the competitors, Victory Supermarket Chain has high operating costs in the Retail (Grocery) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Victory Supermarket Chain lucrative customers.
Victory Supermarket Chain Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Victory Supermarket Chain are -
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. Victory Supermarket Chain can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Use of Bitcoin and other crypto currencies for transactions in Retail (Grocery) industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Victory Supermarket Chain in the Retail (Grocery) industry. Now Victory Supermarket Chain can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Victory Supermarket Chain can improve the customer journey of consumers in the Retail (Grocery) 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Victory Supermarket Chain 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Victory Supermarket Chain in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Retail (Grocery) industry, and it will provide faster access to the consumers.
Manufacturing automation
– Victory Supermarket Chain can use the latest technology developments to improve its manufacturing and designing process in Retail (Grocery) 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.
Better consumer reach
– The expansion of the 5G network will help Victory Supermarket Chain to increase its market reach. Victory Supermarket Chain 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.
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 Victory Supermarket Chain 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Victory Supermarket Chain can use these opportunities to build new business models that can help the communities that Victory Supermarket Chain operates in. Secondly it can use opportunities from government spending in Retail (Grocery) sector.
Using analytics as competitive advantage
– Victory Supermarket Chain has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Retail (Grocery) sector. This continuous investment in analytics has enabled Victory Supermarket Chain to build a competitive advantage using analytics. The analytics driven competitive advantage can help Victory Supermarket Chain to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Victory Supermarket Chain 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.
Creating value in data economy
– The success of analytics program of Victory Supermarket Chain has opened avenues for new revenue streams for the organization in Retail (Grocery) industry. This can help Victory Supermarket Chain to build a more holistic ecosystem for Victory Supermarket Chain products in the Retail (Grocery) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Victory Supermarket Chain 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.
Threats Victory Supermarket Chain External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Victory Supermarket Chain are -
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 Victory Supermarket Chain business can come under increasing regulations regarding data privacy, data security, etc.
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. Victory Supermarket Chain needs to understand the core reasons impacting the Retail (Grocery) 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. Victory Supermarket Chain 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Victory Supermarket Chain may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Retail (Grocery) sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Victory Supermarket Chain 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 Victory Supermarket Chain prominent markets.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Victory Supermarket Chain in Retail (Grocery) industry. The Retail (Grocery) 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.
Stagnating economy with rate increase
– Victory Supermarket Chain 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 Retail (Grocery) industry.
Regulatory challenges
– Victory Supermarket Chain 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 Retail (Grocery) industry regulations.
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.
Environmental challenges
– Victory Supermarket Chain 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. Victory Supermarket Chain can take advantage of this fund but it will also bring new competitors in the Retail (Grocery) industry.
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.
Consumer confidence and its impact on Victory Supermarket Chain 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 Retail (Grocery) industry and other sectors.
Easy access to finance
– Easy access to finance in Retail (Grocery) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Victory Supermarket Chain 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 Victory Supermarket Chain Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Victory Supermarket Chain 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 Victory Supermarket Chain 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 Victory Supermarket Chain 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 Victory Supermarket Chain 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 Victory Supermarket Chain needs to make to build a sustainable competitive advantage.