SWOT Analysis / TOWS Matrix for Embotelladora Andina (United States)
Based on various researches at Oak Spring University , Embotelladora Andina is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, technology disruption, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, increasing commodity prices,
there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Embotelladora Andina
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Embotelladora Andina can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Embotelladora Andina, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Embotelladora Andina 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 Embotelladora Andina can be done for the following purposes –
1. Strategic planning of Embotelladora Andina
2. Improving business portfolio management of Embotelladora Andina
3. Assessing feasibility of the new initiative in United States
4. Making a Beverages (Nonalcoholic) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Embotelladora Andina
Strengths of Embotelladora Andina | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Embotelladora Andina are -
Learning organization
- Embotelladora Andina 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 Embotelladora Andina is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Embotelladora Andina emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Embotelladora Andina is one of the most innovative firm in Beverages (Nonalcoholic) sector.
High brand equity
– Embotelladora Andina has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Embotelladora Andina to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management in the Beverages (Nonalcoholic) industry
– Embotelladora Andina is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy of Embotelladora Andina comprises – understanding the underlying the factors in the Beverages (Nonalcoholic) 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.
Low bargaining power of suppliers
– Suppliers of Embotelladora Andina in the Consumer/Non-Cyclical sector have low bargaining power. Embotelladora Andina has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Embotelladora Andina to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Embotelladora Andina has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Embotelladora Andina 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.
Sustainable margins compare to other players in Beverages (Nonalcoholic) industry
– Embotelladora Andina has clearly differentiated products in the market place. This has enabled Embotelladora Andina to fetch slight price premium compare to the competitors in the Beverages (Nonalcoholic) industry. The sustainable margins have also helped Embotelladora Andina to invest into research and development (R&D) and innovation.
Digital Transformation in Beverages (Nonalcoholic) industry
- digital transformation varies from industry to industry. For Embotelladora Andina digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Embotelladora Andina 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.
Highly skilled collaborators
– Embotelladora Andina has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Beverages (Nonalcoholic) industry. Secondly the value chain collaborators of Embotelladora Andina have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Embotelladora Andina 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 Beverages (Nonalcoholic) industry. The technology infrastructure of United States 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.
Effective Research and Development (R&D)
– Embotelladora Andina has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Embotelladora Andina staying ahead in the Beverages (Nonalcoholic) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses of Embotelladora Andina | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Embotelladora Andina are -
No frontier risks strategy
– From the 10K / annual statement of Embotelladora Andina, it seems that company is thinking out the frontier risks that can impact Beverages (Nonalcoholic) 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.
Aligning sales with marketing
– From the outside it seems that Embotelladora Andina needs to have more collaboration between its sales team and marketing team. Sales professionals in the Beverages (Nonalcoholic) industry have deep experience in developing customer relationships. Marketing department at Embotelladora Andina can leverage the sales team experience to cultivate customer relationships as Embotelladora Andina is planning to shift buying processes online.
Need for greater diversity
– Embotelladora Andina has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Products dominated business model
– Even though Embotelladora Andina has some of the most successful models in the Beverages (Nonalcoholic) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Embotelladora Andina should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Embotelladora Andina 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 Beverages (Nonalcoholic) industry using digital technology.
Slow decision making process
– As mentioned earlier in the report, Embotelladora Andina has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Beverages (Nonalcoholic) industry over the last five years. Embotelladora Andina 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 Embotelladora Andina is dominated by functional specialists. It is not different from other players in the Beverages (Nonalcoholic) industry, but Embotelladora Andina needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Embotelladora Andina to focus more on services in the Beverages (Nonalcoholic) industry rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee of Embotelladora Andina is just above the Beverages (Nonalcoholic) 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 to strategic competitive environment developments
– As Embotelladora Andina is one of the leading players in the Beverages (Nonalcoholic) industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Beverages (Nonalcoholic) industry in last five years.
High bargaining power of channel partners in Beverages (Nonalcoholic) industry
– because of the regulatory requirements in United States, Embotelladora Andina 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 Beverages (Nonalcoholic) industry.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Embotelladora Andina supply chain. Even after few cautionary changes, Embotelladora Andina is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Embotelladora Andina vulnerable to further global disruptions in South East Asia.
Embotelladora Andina Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Embotelladora Andina are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Embotelladora Andina is facing challenges because of the dominance of functional experts in the organization. Embotelladora Andina can utilize new technology in the field of Beverages (Nonalcoholic) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Beverages (Nonalcoholic) industry, but it has also influenced the consumer preferences. Embotelladora Andina can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Embotelladora Andina 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 Embotelladora Andina to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Embotelladora Andina can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Embotelladora Andina can develop new processes and procedures in Beverages (Nonalcoholic) 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 Beverages (Nonalcoholic) industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Embotelladora Andina 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. Embotelladora Andina 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Embotelladora Andina 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 Embotelladora Andina to hire the very best people irrespective of their geographical location.
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 Embotelladora Andina 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.
Creating value in data economy
– The success of analytics program of Embotelladora Andina has opened avenues for new revenue streams for the organization in Beverages (Nonalcoholic) industry. This can help Embotelladora Andina to build a more holistic ecosystem for Embotelladora Andina products in the Beverages (Nonalcoholic) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Embotelladora Andina to increase its market reach. Embotelladora Andina 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.
Manufacturing automation
– Embotelladora Andina can use the latest technology developments to improve its manufacturing and designing process in Beverages (Nonalcoholic) 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.
Learning at scale
– Online learning technologies has now opened space for Embotelladora Andina 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.
Using analytics as competitive advantage
– Embotelladora Andina has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Beverages (Nonalcoholic) sector. This continuous investment in analytics has enabled Embotelladora Andina to build a competitive advantage using analytics. The analytics driven competitive advantage can help Embotelladora Andina to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Embotelladora Andina External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Embotelladora Andina are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Embotelladora Andina 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 Embotelladora Andina prominent markets.
Increasing wage structure of Embotelladora Andina
– 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 Embotelladora Andina.
Regulatory challenges
– Embotelladora Andina 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 Beverages (Nonalcoholic) industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Embotelladora Andina in Beverages (Nonalcoholic) industry. The Beverages (Nonalcoholic) 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.
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. Embotelladora Andina needs to understand the core reasons impacting the Beverages (Nonalcoholic) industry. This will help it in building a better workplace.
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 Embotelladora Andina.
Technology acceleration in Forth Industrial Revolution
– Embotelladora Andina has witnessed rapid integration of technology during Covid-19 in the Beverages (Nonalcoholic) industry. As one of the leading players in the industry, Embotelladora Andina needs to keep up with the evolution of technology in the Beverages (Nonalcoholic) 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.
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. Embotelladora Andina 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.
Environmental challenges
– Embotelladora Andina 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. Embotelladora Andina can take advantage of this fund but it will also bring new competitors in the Beverages (Nonalcoholic) industry.
Easy access to finance
– Easy access to finance in Beverages (Nonalcoholic) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Embotelladora Andina can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Embotelladora Andina may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Beverages (Nonalcoholic) sector.
Shortening product life cycle
– it is one of the major threat that Embotelladora Andina is facing in Beverages (Nonalcoholic) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Weighted SWOT Analysis of Embotelladora Andina Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Embotelladora Andina 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 Embotelladora Andina 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 Embotelladora Andina 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 Embotelladora Andina 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 Embotelladora Andina needs to make to build a sustainable competitive advantage.