SWOT Analysis / TOWS Matrix for Alimentation Couche-Tard (Canada)
Based on various researches at Oak Spring University , Alimentation Couche-Tard is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, wage bills are increasing, increasing energy prices, there is increasing trade war between United States & China,
geopolitical disruptions, increasing commodity prices, etc
Introduction to SWOT Analysis of Alimentation Couche-Tard
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Alimentation Couche-Tard can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Alimentation Couche-Tard, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Alimentation Couche-Tard 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 Alimentation Couche-Tard can be done for the following purposes –
1. Strategic planning of Alimentation Couche-Tard
2. Improving business portfolio management of Alimentation Couche-Tard
3. Assessing feasibility of the new initiative in Canada
4. Making a Retail (Grocery) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Alimentation Couche-Tard
Strengths of Alimentation Couche-Tard | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Alimentation Couche-Tard are -
High switching costs
– The high switching costs that Alimentation Couche-Tard 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.
Ability to lead change in Retail (Grocery)
– Alimentation Couche-Tard is one of the leading players in the Retail (Grocery) industry in Canada. Over the years it has not only transformed the business landscape in the Retail (Grocery) industry in Canada but also across the existing markets. The ability to lead change has enabled Alimentation Couche-Tard in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Alimentation Couche-Tard has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Alimentation Couche-Tard staying ahead in the Retail (Grocery) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Alimentation Couche-Tard 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 Alimentation Couche-Tard is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Alimentation Couche-Tard emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Alimentation Couche-Tard is one of the leading players in the Retail (Grocery) industry in Canada. It is in a position to attract the best talent available in Canada. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Alimentation Couche-Tard has one of the best training and development program in Services 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.
Superior customer experience
– The customer experience strategy of Alimentation Couche-Tard in Retail (Grocery) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Alimentation Couche-Tard has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Retail (Grocery) industry. Secondly the value chain collaborators of Alimentation Couche-Tard have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Alimentation Couche-Tard 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 Retail (Grocery) industry. The technology infrastructure of Canada 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.
Digital Transformation in Retail (Grocery) industry
- digital transformation varies from industry to industry. For Alimentation Couche-Tard digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Alimentation Couche-Tard 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.
Successful track record of launching new products
– Alimentation Couche-Tard has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Alimentation Couche-Tard 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.
Strong track record of project management in the Retail (Grocery) industry
– Alimentation Couche-Tard is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses of Alimentation Couche-Tard | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Alimentation Couche-Tard are -
Increasing silos among functional specialists
– The organizational structure of Alimentation Couche-Tard is dominated by functional specialists. It is not different from other players in the Retail (Grocery) industry, but Alimentation Couche-Tard needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Alimentation Couche-Tard to focus more on services in the Retail (Grocery) industry rather than just following the product oriented approach.
High dependence on Alimentation Couche-Tard ‘s star products
– The top 2 products and services of Alimentation Couche-Tard still accounts for major business revenue. This dependence on star products in Retail (Grocery) industry has resulted into insufficient focus on developing new products, even though Alimentation Couche-Tard has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the Retail (Grocery) industry, Alimentation Couche-Tard 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Alimentation Couche-Tard is slow explore the new channels of communication. These new channels of communication can help Alimentation Couche-Tard to provide better information regarding Retail (Grocery) products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Alimentation Couche-Tard 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.
Interest costs
– Compare to the competition, Alimentation Couche-Tard 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.
Compensation and incentives
– The revenue per employee of Alimentation Couche-Tard is just above the Retail (Grocery) 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.
Low market penetration in new markets
– Outside its home market of Canada, Alimentation Couche-Tard needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Alimentation Couche-Tard has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Retail (Grocery) industry over the last five years. Alimentation Couche-Tard even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Capital Spending Reduction
– Even during the low interest decade, Alimentation Couche-Tard 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 Retail (Grocery) industry using digital technology.
Products dominated business model
– Even though Alimentation Couche-Tard has some of the most successful models in the Retail (Grocery) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Alimentation Couche-Tard should strive to include more intangible value offerings along with its core products and services.
Alimentation Couche-Tard Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Alimentation Couche-Tard are -
Use of Bitcoin and other crypto currencies for transactions in Retail (Grocery) industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Alimentation Couche-Tard in the Retail (Grocery) industry. Now Alimentation Couche-Tard can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Alimentation Couche-Tard has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Retail (Grocery) sector. This continuous investment in analytics has enabled Alimentation Couche-Tard to build a competitive advantage using analytics. The analytics driven competitive advantage can help Alimentation Couche-Tard to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Alimentation Couche-Tard can use these opportunities to build new business models that can help the communities that Alimentation Couche-Tard operates in. Secondly it can use opportunities from government spending in Retail (Grocery) sector.
Buying journey improvements
– Alimentation Couche-Tard can improve the customer journey of consumers in the Retail (Grocery) 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.
Leveraging digital technologies
– Alimentation Couche-Tard 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Alimentation Couche-Tard is facing challenges because of the dominance of functional experts in the organization. Alimentation Couche-Tard can utilize new technology in the field of Retail (Grocery) 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 Retail (Grocery) industry, but it has also influenced the consumer preferences. Alimentation Couche-Tard can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Alimentation Couche-Tard 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.
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. Alimentation Couche-Tard can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Alimentation Couche-Tard has opened avenues for new revenue streams for the organization in Retail (Grocery) industry. This can help Alimentation Couche-Tard to build a more holistic ecosystem for Alimentation Couche-Tard products in the Retail (Grocery) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Alimentation Couche-Tard can develop new processes and procedures in Retail (Grocery) 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.
Learning at scale
– Online learning technologies has now opened space for Alimentation Couche-Tard 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Alimentation Couche-Tard in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Retail (Grocery) industry, and it will provide faster access to the consumers.
Threats Alimentation Couche-Tard External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Alimentation Couche-Tard are -
Shortening product life cycle
– it is one of the major threat that Alimentation Couche-Tard is facing in Retail (Grocery) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Alimentation Couche-Tard
– 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 Alimentation Couche-Tard.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Alimentation Couche-Tard in Retail (Grocery) industry. The Retail (Grocery) 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Alimentation Couche-Tard may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Retail (Grocery) sector.
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 Alimentation Couche-Tard business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Alimentation Couche-Tard 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.
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 Alimentation Couche-Tard in the Retail (Grocery) sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Alimentation Couche-Tard 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 Retail (Grocery) industry.
Environmental challenges
– Alimentation Couche-Tard 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. Alimentation Couche-Tard can take advantage of this fund but it will also bring new competitors in the Retail (Grocery) industry.
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 Alimentation Couche-Tard.
Easy access to finance
– Easy access to finance in Retail (Grocery) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Alimentation Couche-Tard can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Alimentation Couche-Tard needs to understand the core reasons impacting the Retail (Grocery) industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Alimentation Couche-Tard Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Alimentation Couche-Tard 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 Alimentation Couche-Tard 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 Alimentation Couche-Tard 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 Alimentation Couche-Tard 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 Alimentation Couche-Tard needs to make to build a sustainable competitive advantage.