Based on various researches at Oak Spring University , Negri Sembilan Oil Palms is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, there is backlash against globalization,
challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Negri Sembilan Oil Palms
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Negri Sembilan Oil Palms can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Negri Sembilan Oil Palms, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Negri Sembilan Oil Palms 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 Negri Sembilan Oil Palms can be done for the following purposes –
1. Strategic planning of Negri Sembilan Oil Palms
2. Improving business portfolio management of Negri Sembilan Oil Palms
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 Negri Sembilan Oil Palms
Strengths of Negri Sembilan Oil Palms | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Negri Sembilan Oil Palms are -
High brand equity
– Negri Sembilan Oil Palms has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Negri Sembilan Oil Palms to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Negri Sembilan Oil Palms 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 lead change in Crops
– Negri Sembilan Oil Palms is one of the leading players in the Crops industry in Malaysia. Over the years it has not only transformed the business landscape in the Crops industry in Malaysia but also across the existing markets. The ability to lead change has enabled Negri Sembilan Oil Palms in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Negri Sembilan Oil Palms 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 Negri Sembilan Oil Palms 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.
Strong track record of project management in the Crops industry
– Negri Sembilan Oil Palms is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Negri Sembilan Oil Palms
– The covid-19 pandemic has put organizational resilience at the centre of everthing Negri Sembilan Oil Palms does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Negri Sembilan Oil Palms has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Crops industry. Secondly the value chain collaborators of Negri Sembilan Oil Palms have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Negri Sembilan Oil Palms has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Negri Sembilan Oil Palms 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.
Operational resilience
– The operational resilience strategy of Negri Sembilan Oil Palms comprises – understanding the underlying the factors in the Crops 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.
Innovation driven organization
– Negri Sembilan Oil Palms is one of the most innovative firm in Crops sector.
Successful track record of launching new products
– Negri Sembilan Oil Palms has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Negri Sembilan Oil Palms has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Weaknesses of Negri Sembilan Oil Palms | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Negri Sembilan Oil Palms are -
Ability to respond to the competition
– As the decision making is very deliberative at Negri Sembilan Oil Palms, in the dynamic environment of Crops industry it has struggled to respond to the nimble upstart competition. Negri Sembilan Oil Palms has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee of Negri Sembilan Oil Palms is just above the Crops 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.
Slow decision making process
– As mentioned earlier in the report, Negri Sembilan Oil Palms 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. Negri Sembilan Oil Palms 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.
Capital Spending Reduction
– Even during the low interest decade, Negri Sembilan Oil Palms 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 Crops industry using digital technology.
Products dominated business model
– Even though Negri Sembilan Oil Palms has some of the most successful models in the Crops industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Negri Sembilan Oil Palms should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Negri Sembilan Oil Palms 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.
Increasing silos among functional specialists
– The organizational structure of Negri Sembilan Oil Palms is dominated by functional specialists. It is not different from other players in the Crops industry, but Negri Sembilan Oil Palms needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Negri Sembilan Oil Palms to focus more on services in the Crops industry rather than just following the product oriented approach.
Employees’ less understanding of Negri Sembilan Oil Palms strategy
– From the outside it seems that the employees of Negri Sembilan Oil Palms don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High operating costs
– Compare to the competitors, Negri Sembilan Oil Palms 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 Negri Sembilan Oil Palms lucrative customers.
Aligning sales with marketing
– From the outside it seems that Negri Sembilan Oil Palms needs to have more collaboration between its sales team and marketing team. Sales professionals in the Crops industry have deep experience in developing customer relationships. Marketing department at Negri Sembilan Oil Palms can leverage the sales team experience to cultivate customer relationships as Negri Sembilan Oil Palms is planning to shift buying processes online.
Lack of clear differentiation of Negri Sembilan Oil Palms products
– To increase the profitability and margins on the products, Negri Sembilan Oil Palms needs to provide more differentiated products than what it is currently offering in the marketplace.
Negri Sembilan Oil Palms Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Negri Sembilan Oil Palms are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Negri Sembilan Oil Palms can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Negri Sembilan Oil Palms in the Crops industry. Now Negri Sembilan Oil Palms can target international markets with far fewer capital restrictions requirements than the existing system.
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. Negri Sembilan Oil Palms can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Negri Sembilan Oil Palms has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Learning at scale
– Online learning technologies has now opened space for Negri Sembilan Oil Palms 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Negri Sembilan Oil Palms can use these opportunities to build new business models that can help the communities that Negri Sembilan Oil Palms operates in. Secondly it can use opportunities from government spending in Crops sector.
Developing new processes and practices
– Negri Sembilan Oil Palms can develop new processes and procedures in Crops 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Negri Sembilan Oil Palms in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Crops industry, and it will provide faster access to the consumers.
Leveraging digital technologies
– Negri Sembilan Oil Palms 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Negri Sembilan Oil Palms 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 Negri Sembilan Oil Palms to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Negri Sembilan Oil Palms to increase its market reach. Negri Sembilan Oil Palms 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Negri Sembilan Oil Palms is facing challenges because of the dominance of functional experts in the organization. Negri Sembilan Oil Palms 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.
Building a culture of innovation
– managers at Negri Sembilan Oil Palms 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.
Threats Negri Sembilan Oil Palms External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Negri Sembilan Oil Palms are -
Regulatory challenges
– Negri Sembilan Oil Palms 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 Crops industry regulations.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Negri Sembilan Oil Palms 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 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. Negri Sembilan Oil Palms needs to understand the core reasons impacting the Crops industry. This will help it in building a better workplace.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Crops industry are lowering. It can presents Negri Sembilan Oil Palms with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Crops sector.
Environmental challenges
– Negri Sembilan Oil Palms 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. Negri Sembilan Oil Palms can take advantage of this fund but it will also bring new competitors in the Crops industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Negri Sembilan Oil Palms may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Crops sector.
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 Negri Sembilan Oil Palms in the Crops sector and impact the bottomline of the organization.
Consumer confidence and its impact on Negri Sembilan Oil Palms 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.
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. Negri Sembilan Oil Palms can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Technology acceleration in Forth Industrial Revolution
– Negri Sembilan Oil Palms has witnessed rapid integration of technology during Covid-19 in the Crops industry. As one of the leading players in the industry, Negri Sembilan Oil Palms 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.
Shortening product life cycle
– it is one of the major threat that Negri Sembilan Oil Palms is facing in Crops sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Negri Sembilan Oil Palms Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Negri Sembilan Oil Palms 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 Negri Sembilan Oil Palms 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 Negri Sembilan Oil Palms 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 Negri Sembilan Oil Palms 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 Negri Sembilan Oil Palms needs to make to build a sustainable competitive advantage.