SWOT Analysis / TOWS Matrix for Ebro Foods (United Kingdom)
Based on various researches at Oak Spring University , Ebro Foods is operating in a macro-environment that has been destablized by – geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, technology disruption,
there is backlash against globalization, central banks are concerned over increasing inflation, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Ebro Foods can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ebro Foods, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ebro Foods operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Ebro Foods can be done for the following purposes –
1. Strategic planning of Ebro Foods
2. Improving business portfolio management of Ebro Foods
3. Assessing feasibility of the new initiative in United Kingdom
4. Making a Food Processing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ebro Foods
Strengths of Ebro Foods | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ebro Foods are -
Successful track record of launching new products
– Ebro Foods has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ebro Foods 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.
Highly skilled collaborators
– Ebro Foods 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 Ebro Foods have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Food Processing
– Ebro Foods is one of the leading players in the Food Processing industry in United Kingdom. Over the years it has not only transformed the business landscape in the Food Processing industry in United Kingdom but also across the existing markets. The ability to lead change has enabled Ebro Foods in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Ebro Foods 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 Food Processing industry
– Ebro Foods is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Ebro Foods 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 United Kingdom 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.
High switching costs
– The high switching costs that Ebro Foods has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Cross disciplinary teams
– Horizontal connected teams at the Ebro Foods are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Sustainable margins compare to other players in Food Processing industry
– Ebro Foods has clearly differentiated products in the market place. This has enabled Ebro Foods to fetch slight price premium compare to the competitors in the Food Processing industry. The sustainable margins have also helped Ebro Foods to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Ebro Foods has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Ebro Foods staying ahead in the Food Processing industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Ebro Foods is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Ebro Foods is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Ebro Foods emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Ebro Foods in Food Processing industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses of Ebro Foods | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ebro Foods are -
High bargaining power of channel partners in Food Processing industry
– because of the regulatory requirements in United Kingdom, Ebro Foods 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 Food Processing industry.
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 Ebro Foods supply chain. Even after few cautionary changes, Ebro Foods is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ebro Foods vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ebro Foods is slow explore the new channels of communication. These new channels of communication can help Ebro Foods to provide better information regarding Food Processing products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Ebro Foods has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Lack of clear differentiation of Ebro Foods products
– To increase the profitability and margins on the products, Ebro Foods needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring in Food Processing industry
– The stress on hiring functional specialists at Ebro Foods 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.
High operating costs
– Compare to the competitors, Ebro Foods has high operating costs in the Food Processing industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Ebro Foods lucrative customers.
High dependence on Ebro Foods ‘s star products
– The top 2 products and services of Ebro Foods 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 Ebro Foods has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative at Ebro Foods, in the dynamic environment of Food Processing industry it has struggled to respond to the nimble upstart competition. Ebro Foods has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Ebro Foods is dominated by functional specialists. It is not different from other players in the Food Processing industry, but Ebro Foods needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ebro Foods to focus more on services in the Food Processing industry rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Ebro Foods has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Food Processing industry using digital technology.
Ebro Foods Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Ebro Foods are -
Use of Bitcoin and other crypto currencies for transactions in Food Processing industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Ebro Foods in the Food Processing industry. Now Ebro Foods can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Ebro Foods to increase its market reach. Ebro Foods will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Buying journey improvements
– Ebro Foods can improve the customer journey of consumers in the Food Processing 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.
Creating value in data economy
– The success of analytics program of Ebro Foods has opened avenues for new revenue streams for the organization in Food Processing industry. This can help Ebro Foods to build a more holistic ecosystem for Ebro Foods products in the Food Processing industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Ebro Foods 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 Ebro Foods to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ebro Foods to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Ebro Foods can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Ebro Foods can develop new processes and procedures in Food Processing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
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 Ebro Foods 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, Ebro Foods can use these opportunities to build new business models that can help the communities that Ebro Foods operates in. Secondly it can use opportunities from government spending in Food Processing sector.
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. Ebro Foods can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ebro Foods can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ebro Foods 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ebro Foods is facing challenges because of the dominance of functional experts in the organization. Ebro Foods can utilize new technology in the field of Food Processing industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats Ebro Foods External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Ebro Foods are -
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. Ebro Foods needs to understand the core reasons impacting the Food Processing industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ebro Foods can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate Ebro Foods prominent markets.
Technology acceleration in Forth Industrial Revolution
– Ebro Foods has witnessed rapid integration of technology during Covid-19 in the Food Processing industry. As one of the leading players in the industry, Ebro Foods 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.
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 Ebro Foods business can come under increasing regulations regarding data privacy, data security, etc.
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. Ebro Foods 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.
High dependence on third party suppliers
– Ebro Foods high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Easy access to finance
– Easy access to finance in Food Processing industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Ebro Foods can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Ebro Foods 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.
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 Ebro Foods.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Ebro Foods may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Food Processing sector.
Stagnating economy with rate increase
– Ebro Foods 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.
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 Ebro Foods in the Food Processing sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Ebro Foods Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Ebro Foods needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of Ebro Foods is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of Ebro Foods is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Ebro Foods to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Ebro Foods needs to make to build a sustainable competitive advantage.