Hap Seng Plantations (HAPP) SWOT Analysis / TOWS Matrix / MBA Resources
Crops
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Hap Seng Plantations (Malaysia)
Based on various researches at Oak Spring University , Hap Seng Plantations is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, increasing energy prices, geopolitical disruptions, increasing household debt because of falling income levels, increasing commodity prices,
central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Hap Seng Plantations
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Hap Seng Plantations can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hap Seng Plantations, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hap Seng Plantations 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 Hap Seng Plantations can be done for the following purposes –
1. Strategic planning of Hap Seng Plantations
2. Improving business portfolio management of Hap Seng Plantations
3. Assessing feasibility of the new initiative in Malaysia
4. Making a Crops sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hap Seng Plantations
Strengths of Hap Seng Plantations | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hap Seng Plantations are -
High switching costs
– The high switching costs that Hap Seng Plantations 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.
Effective Research and Development (R&D)
– Hap Seng Plantations has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Hap Seng Plantations staying ahead in the Crops industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Hap Seng Plantations
– The covid-19 pandemic has put organizational resilience at the centre of everthing Hap Seng Plantations does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management in the Crops industry
– Hap Seng Plantations is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Hap Seng Plantations has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hap Seng Plantations has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Training and development
– Hap Seng Plantations 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.
Ability to recruit top talent
– Hap Seng Plantations is one of the leading players in the Crops industry in Malaysia. It is in a position to attract the best talent available in Malaysia. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Hap Seng Plantations 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 Crops industry. The technology infrastructure of Malaysia 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.
Low bargaining power of suppliers
– Suppliers of Hap Seng Plantations in the Consumer/Non-Cyclical sector have low bargaining power. Hap Seng Plantations has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hap Seng Plantations to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Hap Seng Plantations is present in almost all the verticals within the Crops industry. This has provided Hap Seng Plantations a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
High brand equity
– Hap Seng Plantations has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hap Seng Plantations to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Hap Seng Plantations 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 Hap Seng Plantations is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Hap Seng Plantations emphasize – knowledge, initiative, and innovation.
Weaknesses of Hap Seng Plantations | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hap Seng Plantations are -
Ability to respond to the competition
– As the decision making is very deliberative at Hap Seng Plantations, in the dynamic environment of Crops industry it has struggled to respond to the nimble upstart competition. Hap Seng Plantations has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Hap Seng Plantations products
– To increase the profitability and margins on the products, Hap Seng Plantations needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on Hap Seng Plantations ‘s star products
– The top 2 products and services of Hap Seng Plantations still accounts for major business revenue. This dependence on star products in Crops industry has resulted into insufficient focus on developing new products, even though Hap Seng Plantations has relatively successful track record of launching new products.
No frontier risks strategy
– From the 10K / annual statement of Hap Seng Plantations, it seems that company is thinking out the frontier risks that can impact Crops 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.
Low market penetration in new markets
– Outside its home market of Malaysia, Hap Seng Plantations needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Hap Seng Plantations is dominated by functional specialists. It is not different from other players in the Crops industry, but Hap Seng Plantations needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hap Seng Plantations to focus more on services in the Crops industry rather than just following the product oriented approach.
Skills based hiring in Crops industry
– The stress on hiring functional specialists at Hap Seng Plantations 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, Hap Seng Plantations has high operating costs in the Crops industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Hap Seng Plantations lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Hap Seng Plantations has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Crops industry over the last five years. Hap Seng Plantations 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.
Slow to strategic competitive environment developments
– As Hap Seng Plantations is one of the leading players in the Crops industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Crops industry in last five years.
Employees’ less understanding of Hap Seng Plantations strategy
– From the outside it seems that the employees of Hap Seng Plantations 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.
Hap Seng Plantations Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Hap Seng Plantations 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. Hap Seng Plantations can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Hap Seng Plantations can use the latest technology developments to improve its manufacturing and designing process in Crops 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.
Buying journey improvements
– Hap Seng Plantations can improve the customer journey of consumers in the Crops 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.
Using analytics as competitive advantage
– Hap Seng Plantations has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Crops sector. This continuous investment in analytics has enabled Hap Seng Plantations to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hap Seng Plantations to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Hap Seng Plantations to increase its market reach. Hap Seng Plantations 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Crops industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Hap Seng Plantations 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. Hap Seng Plantations 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hap Seng Plantations is facing challenges because of the dominance of functional experts in the organization. Hap Seng Plantations can utilize new technology in the field of Crops industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, 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 Hap Seng Plantations 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.
Building a culture of innovation
– managers at Hap Seng Plantations 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 Crops industry.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hap Seng Plantations can use these opportunities to build new business models that can help the communities that Hap Seng Plantations operates in. Secondly it can use opportunities from government spending in Crops sector.
Use of Bitcoin and other crypto currencies for transactions in Crops industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Hap Seng Plantations in the Crops industry. Now Hap Seng Plantations can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hap Seng Plantations 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 Hap Seng Plantations to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hap Seng Plantations can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Hap Seng Plantations External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Hap Seng Plantations are -
Easy access to finance
– Easy access to finance in Crops industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Hap Seng Plantations can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Hap Seng Plantations in the Crops sector and impact the bottomline of the organization.
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 Hap Seng Plantations.
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.
Increasing wage structure of Hap Seng Plantations
– 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 Hap Seng Plantations.
Shortening product life cycle
– it is one of the major threat that Hap Seng Plantations is facing in Crops sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Hap Seng Plantations 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 Crops industry and other sectors.
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. Hap Seng Plantations needs to understand the core reasons impacting the Crops industry. This will help it in building a better workplace.
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.
Environmental challenges
– Hap Seng Plantations 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. Hap Seng Plantations can take advantage of this fund but it will also bring new competitors in the Crops industry.
Technology acceleration in Forth Industrial Revolution
– Hap Seng Plantations has witnessed rapid integration of technology during Covid-19 in the Crops industry. As one of the leading players in the industry, Hap Seng Plantations needs to keep up with the evolution of technology in the Crops 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.
Stagnating economy with rate increase
– Hap Seng Plantations 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 Crops industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hap Seng Plantations 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 Hap Seng Plantations prominent markets.
Weighted SWOT Analysis of Hap Seng Plantations Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Hap Seng Plantations 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 Hap Seng Plantations 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 Hap Seng Plantations 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 Hap Seng Plantations 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 Hap Seng Plantations needs to make to build a sustainable competitive advantage.