SWOT Analysis / TOWS Matrix for Khong Guan Flour (Singapore)
Based on various researches at Oak Spring University , Khong Guan Flour is operating in a macro-environment that has been destablized by – cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, geopolitical disruptions, increasing energy prices, there is increasing trade war between United States & China, increasing commodity prices,
technology disruption, there is backlash against globalization, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Khong Guan Flour can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Khong Guan Flour, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Khong Guan Flour 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 Khong Guan Flour can be done for the following purposes –
1. Strategic planning of Khong Guan Flour
2. Improving business portfolio management of Khong Guan Flour
3. Assessing feasibility of the new initiative in Singapore
4. Making a Food Processing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Khong Guan Flour
Strengths of Khong Guan Flour | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Khong Guan Flour are -
Operational resilience
– The operational resilience strategy of Khong Guan Flour 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.
Ability to recruit top talent
– Khong Guan Flour is one of the leading players in the Food Processing industry in Singapore. It is in a position to attract the best talent available in Singapore. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Khong Guan Flour in the Consumer/Non-Cyclical sector have low bargaining power. Khong Guan Flour has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Khong Guan Flour to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Food Processing industry
– Khong Guan Flour has clearly differentiated products in the market place. This has enabled Khong Guan Flour to fetch slight price premium compare to the competitors in the Food Processing industry. The sustainable margins have also helped Khong Guan Flour to invest into research and development (R&D) and innovation.
Organizational Resilience of Khong Guan Flour
– The covid-19 pandemic has put organizational resilience at the centre of everthing Khong Guan Flour does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Khong Guan Flour has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Khong Guan Flour 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.
Diverse revenue streams
– Khong Guan Flour is present in almost all the verticals within the Food Processing industry. This has provided Khong Guan Flour 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.
Superior customer experience
– The customer experience strategy of Khong Guan Flour in Food Processing industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Khong Guan Flour 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.
Strong track record of project management in the Food Processing industry
– Khong Guan Flour is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Food Processing industry
- digital transformation varies from industry to industry. For Khong Guan Flour digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Khong Guan Flour 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.
High brand equity
– Khong Guan Flour has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Khong Guan Flour to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of Khong Guan Flour | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Khong Guan Flour are -
No frontier risks strategy
– From the 10K / annual statement of Khong Guan Flour, it seems that company is thinking out the frontier risks that can impact Food Processing 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.
High cash cycle compare to competitors
Khong Guan Flour 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.
Slow decision making process
– As mentioned earlier in the report, Khong Guan Flour 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. Khong Guan Flour 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.
Lack of clear differentiation of Khong Guan Flour products
– To increase the profitability and margins on the products, Khong Guan Flour needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As Khong Guan Flour 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.
Ability to respond to the competition
– As the decision making is very deliberative at Khong Guan Flour, in the dynamic environment of Food Processing industry it has struggled to respond to the nimble upstart competition. Khong Guan Flour has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Khong Guan Flour 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.
Low market penetration in new markets
– Outside its home market of Singapore, Khong Guan Flour needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring in Food Processing industry
– The stress on hiring functional specialists at Khong Guan Flour 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.
Products dominated business model
– Even though Khong Guan Flour has some of the most successful models in the Food Processing industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Khong Guan Flour should strive to include more intangible value offerings along with its core products and services.
High dependence on Khong Guan Flour ‘s star products
– The top 2 products and services of Khong Guan Flour 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 Khong Guan Flour has relatively successful track record of launching new products.
Khong Guan Flour Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Khong Guan Flour are -
Developing new processes and practices
– Khong Guan Flour 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.
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. Khong Guan Flour can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Khong Guan Flour to increase its market reach. Khong Guan Flour 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Khong Guan Flour 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 Khong Guan Flour to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Khong Guan Flour 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 Khong Guan Flour has opened avenues for new revenue streams for the organization in Food Processing industry. This can help Khong Guan Flour to build a more holistic ecosystem for Khong Guan Flour products in the Food Processing industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Khong Guan Flour 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Khong Guan Flour 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 Khong Guan Flour to hire the very best people irrespective of their geographical location.
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. Khong Guan Flour 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. Khong Guan Flour 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.
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. Khong Guan Flour 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 Khong Guan Flour in the Food Processing industry. Now Khong Guan Flour can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Khong Guan Flour is facing challenges because of the dominance of functional experts in the organization. Khong Guan Flour 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.
Learning at scale
– Online learning technologies has now opened space for Khong Guan Flour 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.
Threats Khong Guan Flour External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Khong Guan Flour are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Khong Guan Flour 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.
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 Khong Guan Flour.
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. Khong Guan Flour needs to understand the core reasons impacting the Food Processing industry. This will help it in building a better workplace.
Regulatory challenges
– Khong Guan Flour 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Khong Guan Flour in Food Processing industry. The Food Processing 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.
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 Khong Guan Flour in the Food Processing sector and impact the bottomline 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. Khong Guan Flour can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Khong Guan Flour 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.
Stagnating economy with rate increase
– Khong Guan Flour 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Food Processing industry are lowering. It can presents Khong Guan Flour with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Food Processing sector.
Increasing wage structure of Khong Guan Flour
– 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 Khong Guan Flour.
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 Khong Guan Flour business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Khong Guan Flour 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 Khong Guan Flour prominent markets.
Weighted SWOT Analysis of Khong Guan Flour Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Khong Guan Flour 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 Khong Guan Flour 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 Khong Guan Flour 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 Khong Guan Flour 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 Khong Guan Flour needs to make to build a sustainable competitive advantage.
