SWOT Analysis / TOWS Matrix for Malayan Flour Mills (Malaysia)
Based on various researches at Oak Spring University , Malayan Flour Mills is operating in a macro-environment that has been destablized by – increasing commodity prices, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation,
wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Malayan Flour Mills
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Malayan Flour Mills can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Malayan Flour Mills, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Malayan Flour Mills 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 Malayan Flour Mills can be done for the following purposes –
1. Strategic planning of Malayan Flour Mills
2. Improving business portfolio management of Malayan Flour Mills
3. Assessing feasibility of the new initiative in Malaysia
4. Making a Food Processing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Malayan Flour Mills
Strengths of Malayan Flour Mills | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Malayan Flour Mills are -
Diverse revenue streams
– Malayan Flour Mills is present in almost all the verticals within the Food Processing industry. This has provided Malayan Flour Mills 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.
Operational resilience
– The operational resilience strategy of Malayan Flour Mills 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.
Sustainable margins compare to other players in Food Processing industry
– Malayan Flour Mills has clearly differentiated products in the market place. This has enabled Malayan Flour Mills to fetch slight price premium compare to the competitors in the Food Processing industry. The sustainable margins have also helped Malayan Flour Mills to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Malayan Flour Mills in the Consumer/Non-Cyclical sector have low bargaining power. Malayan Flour Mills has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Malayan Flour Mills to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Malayan Flour Mills is one of the most innovative firm in Food Processing sector.
High switching costs
– The high switching costs that Malayan Flour Mills 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.
Ability to recruit top talent
– Malayan Flour Mills is one of the leading players in the Food Processing 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
– Malayan Flour Mills 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 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.
Training and development
– Malayan Flour Mills 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.
Learning organization
- Malayan Flour Mills 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 Malayan Flour Mills is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Malayan Flour Mills emphasize – knowledge, initiative, and innovation.
High brand equity
– Malayan Flour Mills has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Malayan Flour Mills to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management in the Food Processing industry
– Malayan Flour Mills is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses of Malayan Flour Mills | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Malayan Flour Mills are -
Slow to strategic competitive environment developments
– As Malayan Flour Mills is one of the leading players in the Food Processing industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Food Processing industry in last five years.
Skills based hiring in Food Processing industry
– The stress on hiring functional specialists at Malayan Flour Mills 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 cash cycle compare to competitors
Malayan Flour Mills has a high cash cycle compare to other players in the Food Processing industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Low market penetration in new markets
– Outside its home market of Malaysia, Malayan Flour Mills needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, Malayan Flour Mills 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 Malayan Flour Mills lucrative customers.
Interest costs
– Compare to the competition, Malayan Flour Mills 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 Malayan Flour Mills ‘s star products
– The top 2 products and services of Malayan Flour Mills 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 Malayan Flour Mills has relatively successful track record of launching new products.
Aligning sales with marketing
– From the outside it seems that Malayan Flour Mills 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 Malayan Flour Mills can leverage the sales team experience to cultivate customer relationships as Malayan Flour Mills is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Malayan Flour Mills 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. Malayan Flour Mills 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.
Increasing silos among functional specialists
– The organizational structure of Malayan Flour Mills is dominated by functional specialists. It is not different from other players in the Food Processing industry, but Malayan Flour Mills needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Malayan Flour Mills to focus more on services in the Food Processing industry rather than just following the product oriented approach.
High bargaining power of channel partners in Food Processing industry
– because of the regulatory requirements in Malaysia, Malayan Flour Mills 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.
Malayan Flour Mills Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Malayan Flour Mills are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Malayan Flour Mills can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Malayan Flour Mills 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.
Buying journey improvements
– Malayan Flour Mills 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.
Developing new processes and practices
– Malayan Flour Mills 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.
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. Malayan Flour Mills 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. Malayan Flour Mills 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.
Manufacturing automation
– Malayan Flour Mills can use the latest technology developments to improve its manufacturing and designing process in Food Processing 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Malayan Flour Mills is facing challenges because of the dominance of functional experts in the organization. Malayan Flour Mills 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, Malayan Flour Mills can use these opportunities to build new business models that can help the communities that Malayan Flour Mills operates in. Secondly it can use opportunities from government spending in Food Processing sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Malayan Flour Mills in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Food Processing industry, and it will provide faster access to the consumers.
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. Malayan Flour Mills 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 Food Processing industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Malayan Flour Mills in the Food Processing industry. Now Malayan Flour Mills can target international markets with far fewer capital restrictions requirements than the existing system.
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 Malayan Flour Mills 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Malayan Flour Mills can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help Malayan Flour Mills to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Malayan Flour Mills External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Malayan Flour Mills are -
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 Malayan Flour Mills.
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.
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. Malayan Flour Mills can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Malayan Flour Mills 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.
Increasing wage structure of Malayan Flour Mills
– 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 Malayan Flour Mills.
Shortening product life cycle
– it is one of the major threat that Malayan Flour Mills is facing in Food Processing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Malayan Flour Mills 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.
Regulatory challenges
– Malayan Flour Mills 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Food Processing industry are lowering. It can presents Malayan Flour Mills with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Food Processing sector.
Technology acceleration in Forth Industrial Revolution
– Malayan Flour Mills has witnessed rapid integration of technology during Covid-19 in the Food Processing industry. As one of the leading players in the industry, Malayan Flour Mills 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.
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. Malayan Flour Mills needs to understand the core reasons impacting the Food Processing industry. This will help it in building a better workplace.
Environmental challenges
– Malayan Flour Mills 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. Malayan Flour Mills can take advantage of this fund but it will also bring new competitors in the Food Processing industry.
High dependence on third party suppliers
– Malayan Flour Mills 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.
Weighted SWOT Analysis of Malayan Flour Mills Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Malayan Flour Mills 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 Malayan Flour Mills 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 Malayan Flour Mills 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 Malayan Flour Mills 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 Malayan Flour Mills needs to make to build a sustainable competitive advantage.