Berry Global (BERY) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Berry Global (United States)

Based on various researches at Oak Spring University , Berry Global is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , increasing transportation and logistics costs, geopolitical disruptions, etc

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Introduction to SWOT Analysis of Berry Global

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Berry Global can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Berry Global, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Berry Global 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Berry Global can be done for the following purposes –
1. Strategic planning of Berry Global
2. Improving business portfolio management of Berry Global
3. Assessing feasibility of the new initiative in United States
4. Making a Containers & Packaging sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Berry Global

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Strengths of Berry Global | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Berry Global are -

Analytics focus

– Berry Global 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 Containers & Packaging 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.

Organizational Resilience of Berry Global

– The covid-19 pandemic has put organizational resilience at the centre of everthing Berry Global does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Strong track record of project management in the Containers & Packaging industry

– Berry Global is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Successful track record of launching new products

– Berry Global has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Berry Global 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.

Effective Research and Development (R&D)

– Berry Global has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Berry Global staying ahead in the Containers & Packaging industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Innovation driven organization

– Berry Global is one of the most innovative firm in Containers & Packaging sector.

High brand equity

– Berry Global has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Berry Global to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Training and development

– Berry Global has one of the best training and development program in Basic Materials 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.

Sustainable margins compare to other players in Containers & Packaging industry

– Berry Global has clearly differentiated products in the market place. This has enabled Berry Global to fetch slight price premium compare to the competitors in the Containers & Packaging industry. The sustainable margins have also helped Berry Global to invest into research and development (R&D) and innovation.

Digital Transformation in Containers & Packaging industry

- digital transformation varies from industry to industry. For Berry Global digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Berry Global 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.

Learning organization

- Berry Global 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 Berry Global is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Berry Global emphasize – knowledge, initiative, and innovation.

Cross disciplinary teams

– Horizontal connected teams at the Berry Global 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.

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Weaknesses of Berry Global | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Berry Global are -

Slow to strategic competitive environment developments

– As Berry Global is one of the leading players in the Containers & Packaging industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Containers & Packaging industry in last five years.

Low market penetration in new markets

– Outside its home market of United States, Berry Global needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Lack of clear differentiation of Berry Global products

– To increase the profitability and margins on the products, Berry Global needs to provide more differentiated products than what it is currently offering in the marketplace.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Berry Global is slow explore the new channels of communication. These new channels of communication can help Berry Global to provide better information regarding Containers & Packaging products and services. It can also build an online community to further reach out to potential customers.

No frontier risks strategy

– From the 10K / annual statement of Berry Global, it seems that company is thinking out the frontier risks that can impact Containers & Packaging 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.

Employees’ less understanding of Berry Global strategy

– From the outside it seems that the employees of Berry Global 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.

Compensation and incentives

– The revenue per employee of Berry Global is just above the Containers & Packaging 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.

Skills based hiring in Containers & Packaging industry

– The stress on hiring functional specialists at Berry Global 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.

Slow decision making process

– As mentioned earlier in the report, Berry Global has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Containers & Packaging industry over the last five years. Berry Global 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 Berry Global is dominated by functional specialists. It is not different from other players in the Containers & Packaging industry, but Berry Global needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Berry Global to focus more on services in the Containers & Packaging industry rather than just following the product oriented approach.

Capital Spending Reduction

– Even during the low interest decade, Berry Global 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 Containers & Packaging industry using digital technology.

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Berry Global Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Berry Global are -

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Berry Global 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 Berry Global to hire the very best people irrespective of their geographical location.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Berry Global in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Containers & Packaging industry, and it will provide faster access to the consumers.

Better consumer reach

– The expansion of the 5G network will help Berry Global to increase its market reach. Berry Global 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.

Leveraging digital technologies

– Berry Global 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.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Containers & Packaging industry, but it has also influenced the consumer preferences. Berry Global 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, Berry Global 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 Berry Global to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Berry Global is facing challenges because of the dominance of functional experts in the organization. Berry Global can utilize new technology in the field of Containers & Packaging 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 Berry Global 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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Containers & Packaging industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Berry Global 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. Berry Global 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.

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 Berry Global 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Berry Global can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Manufacturing automation

– Berry Global can use the latest technology developments to improve its manufacturing and designing process in Containers & Packaging 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.

Use of Bitcoin and other crypto currencies for transactions in Containers & Packaging industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Berry Global in the Containers & Packaging industry. Now Berry Global can target international markets with far fewer capital restrictions requirements than the existing system.

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Threats Berry Global External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Berry Global are -

Regulatory challenges

– Berry Global 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 Containers & Packaging industry regulations.

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.

Consumer confidence and its impact on Berry Global 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 Containers & Packaging industry and other sectors.

High dependence on third party suppliers

– Berry Global 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.

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. Berry Global 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.

Easy access to finance

– Easy access to finance in Containers & Packaging industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Berry Global can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Berry Global 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 Berry Global prominent markets.

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.

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 Berry Global business can come under increasing regulations regarding data privacy, data security, etc.

Increasing wage structure of Berry Global

– 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 Berry Global.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Berry Global in Containers & Packaging industry. The Containers & Packaging 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.

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 Berry Global.

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. Berry Global needs to understand the core reasons impacting the Containers & Packaging industry. This will help it in building a better workplace.

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Weighted SWOT Analysis of Berry Global Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Berry Global 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 Berry Global 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 Berry Global 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 Berry Global 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 Berry Global needs to make to build a sustainable competitive advantage.

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