BRASILAGRO ON (AGRO3) SWOT Analysis / TOWS Matrix / MBA Resources
Crops
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for BRASILAGRO ON (Brazil)
Based on various researches at Oak Spring University , BRASILAGRO ON is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs,
increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that BRASILAGRO ON can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the BRASILAGRO ON, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which BRASILAGRO ON 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 BRASILAGRO ON can be done for the following purposes –
1. Strategic planning of BRASILAGRO ON
2. Improving business portfolio management of BRASILAGRO ON
3. Assessing feasibility of the new initiative in Brazil
4. Making a Crops sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of BRASILAGRO ON
Strengths of BRASILAGRO ON | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of BRASILAGRO ON are -
Superior customer experience
– The customer experience strategy of BRASILAGRO ON in Crops industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of BRASILAGRO ON in the Consumer/Non-Cyclical sector have low bargaining power. BRASILAGRO ON has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps BRASILAGRO ON to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– BRASILAGRO ON is one of the most innovative firm in Crops sector.
Analytics focus
– BRASILAGRO ON 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 Brazil 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 brand equity
– BRASILAGRO ON has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled BRASILAGRO ON to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management in the Crops industry
– BRASILAGRO ON is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that BRASILAGRO ON 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.
Learning organization
- BRASILAGRO ON 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 BRASILAGRO ON is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at BRASILAGRO ON emphasize – knowledge, initiative, and innovation.
Digital Transformation in Crops industry
- digital transformation varies from industry to industry. For BRASILAGRO ON digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. BRASILAGRO ON 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.
Ability to recruit top talent
– BRASILAGRO ON is one of the leading players in the Crops industry in Brazil. It is in a position to attract the best talent available in Brazil. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of BRASILAGRO ON
– The covid-19 pandemic has put organizational resilience at the centre of everthing BRASILAGRO ON does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– BRASILAGRO ON 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 BRASILAGRO ON have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses of BRASILAGRO ON | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of BRASILAGRO ON are -
Slow decision making process
– As mentioned earlier in the report, BRASILAGRO ON 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. BRASILAGRO ON 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.
Products dominated business model
– Even though BRASILAGRO ON 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. BRASILAGRO ON should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of Brazil, BRASILAGRO ON needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring in Crops industry
– The stress on hiring functional specialists at BRASILAGRO ON 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.
Workers concerns about automation
– As automation is fast increasing in the Crops industry, BRASILAGRO ON needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High bargaining power of channel partners in Crops industry
– because of the regulatory requirements in Brazil, BRASILAGRO ON 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 Crops industry.
Ability to respond to the competition
– As the decision making is very deliberative at BRASILAGRO ON, in the dynamic environment of Crops industry it has struggled to respond to the nimble upstart competition. BRASILAGRO ON has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ less understanding of BRASILAGRO ON strategy
– From the outside it seems that the employees of BRASILAGRO ON 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.
Interest costs
– Compare to the competition, BRASILAGRO ON 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 BRASILAGRO ON is dominated by functional specialists. It is not different from other players in the Crops industry, but BRASILAGRO ON needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help BRASILAGRO ON to focus more on services in the Crops industry rather than just following the product oriented approach.
Aligning sales with marketing
– From the outside it seems that BRASILAGRO ON 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 BRASILAGRO ON can leverage the sales team experience to cultivate customer relationships as BRASILAGRO ON is planning to shift buying processes online.
BRASILAGRO ON Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of BRASILAGRO ON are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, BRASILAGRO ON can use these opportunities to build new business models that can help the communities that BRASILAGRO ON operates in. Secondly it can use opportunities from government spending in Crops sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, BRASILAGRO ON is facing challenges because of the dominance of functional experts in the organization. BRASILAGRO ON 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for BRASILAGRO ON 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Crops industry, but it has also influenced the consumer preferences. BRASILAGRO ON can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. BRASILAGRO ON can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– BRASILAGRO ON 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 BRASILAGRO ON to build a competitive advantage using analytics. The analytics driven competitive advantage can help BRASILAGRO ON to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– BRASILAGRO ON 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.
Building a culture of innovation
– managers at BRASILAGRO ON 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.
Learning at scale
– Online learning technologies has now opened space for BRASILAGRO ON 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.
Loyalty marketing
– BRASILAGRO ON 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, BRASILAGRO ON 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 BRASILAGRO ON to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 BRASILAGRO ON 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, BRASILAGRO ON 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.
Threats BRASILAGRO ON External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of BRASILAGRO ON are -
Technology acceleration in Forth Industrial Revolution
– BRASILAGRO ON has witnessed rapid integration of technology during Covid-19 in the Crops industry. As one of the leading players in the industry, BRASILAGRO ON 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.
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 BRASILAGRO ON in the Crops sector and impact the bottomline of the organization.
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. BRASILAGRO ON 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.
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.
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. BRASILAGRO ON can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– BRASILAGRO ON 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.
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.
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. BRASILAGRO ON needs to understand the core reasons impacting the Crops industry. This will help it in building a better workplace.
Regulatory challenges
– BRASILAGRO ON 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.
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 BRASILAGRO ON business can come under increasing regulations regarding data privacy, data security, etc.
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 BRASILAGRO ON.
Environmental challenges
– BRASILAGRO ON 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. BRASILAGRO ON can take advantage of this fund but it will also bring new competitors in the Crops industry.
Increasing wage structure of BRASILAGRO ON
– 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 BRASILAGRO ON.
Weighted SWOT Analysis of BRASILAGRO ON Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at BRASILAGRO ON 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 BRASILAGRO ON 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 BRASILAGRO ON 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 BRASILAGRO ON 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 BRASILAGRO ON needs to make to build a sustainable competitive advantage.
