Cal-Maine (CALM) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Cal-Maine (United States)

Based on various researches at Oak Spring University , Cal-Maine is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, etc

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Introduction to SWOT Analysis of Cal-Maine

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Cal-Maine can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cal-Maine, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cal-Maine 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 Cal-Maine can be done for the following purposes –
1. Strategic planning of Cal-Maine
2. Improving business portfolio management of Cal-Maine
3. Assessing feasibility of the new initiative in United States
4. Making a Fish/Livestock sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Cal-Maine

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Strengths of Cal-Maine | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Cal-Maine are -

Cross disciplinary teams

– Horizontal connected teams at the Cal-Maine 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.

Superior customer experience

– The customer experience strategy of Cal-Maine in Fish/Livestock industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Effective Research and Development (R&D)

– Cal-Maine has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Cal-Maine staying ahead in the Fish/Livestock industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Strong track record of project management in the Fish/Livestock industry

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

Highly skilled collaborators

– Cal-Maine has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Fish/Livestock industry. Secondly the value chain collaborators of Cal-Maine have helped the firm to develop new products and bring them quickly to the marketplace.

Organizational Resilience of Cal-Maine

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

Operational resilience

– The operational resilience strategy of Cal-Maine comprises – understanding the underlying the factors in the Fish/Livestock 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.

Training and development

– Cal-Maine has one of the best training and development program in Consumer/Non-Cyclical 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.

Ability to recruit top talent

– Cal-Maine is one of the leading players in the Fish/Livestock industry in United States. It is in a position to attract the best talent available in United States. The firm has a robust talent identification program that helps in identifying the brightest.

Learning organization

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

Innovation driven organization

– Cal-Maine is one of the most innovative firm in Fish/Livestock sector.

High switching costs

– The high switching costs that Cal-Maine 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.

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Weaknesses of Cal-Maine | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Cal-Maine are -

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cal-Maine is slow explore the new channels of communication. These new channels of communication can help Cal-Maine to provide better information regarding Fish/Livestock products and services. It can also build an online community to further reach out to potential customers.

Employees’ less understanding of Cal-Maine strategy

– From the outside it seems that the employees of Cal-Maine 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, Cal-Maine 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 Cal-Maine is dominated by functional specialists. It is not different from other players in the Fish/Livestock industry, but Cal-Maine needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cal-Maine to focus more on services in the Fish/Livestock industry rather than just following the product oriented approach.

Lack of clear differentiation of Cal-Maine products

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

Low market penetration in new markets

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

High bargaining power of channel partners in Fish/Livestock industry

– because of the regulatory requirements in United States, Cal-Maine 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 Fish/Livestock industry.

Products dominated business model

– Even though Cal-Maine has some of the most successful models in the Fish/Livestock industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Cal-Maine should strive to include more intangible value offerings along with its core products and services.

Aligning sales with marketing

– From the outside it seems that Cal-Maine needs to have more collaboration between its sales team and marketing team. Sales professionals in the Fish/Livestock industry have deep experience in developing customer relationships. Marketing department at Cal-Maine can leverage the sales team experience to cultivate customer relationships as Cal-Maine is planning to shift buying processes online.

High dependence on Cal-Maine ‘s star products

– The top 2 products and services of Cal-Maine still accounts for major business revenue. This dependence on star products in Fish/Livestock industry has resulted into insufficient focus on developing new products, even though Cal-Maine has relatively successful track record of launching new products.

High operating costs

– Compare to the competitors, Cal-Maine has high operating costs in the Fish/Livestock industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Cal-Maine lucrative customers.

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Cal-Maine Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Cal-Maine are -

Using analytics as competitive advantage

– Cal-Maine has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Fish/Livestock sector. This continuous investment in analytics has enabled Cal-Maine to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cal-Maine to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Cal-Maine in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Fish/Livestock industry, and it will provide faster access to the consumers.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Fish/Livestock industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Cal-Maine 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. Cal-Maine 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.

Manufacturing automation

– Cal-Maine can use the latest technology developments to improve its manufacturing and designing process in Fish/Livestock 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cal-Maine can use these opportunities to build new business models that can help the communities that Cal-Maine operates in. Secondly it can use opportunities from government spending in Fish/Livestock sector.

Better consumer reach

– The expansion of the 5G network will help Cal-Maine to increase its market reach. Cal-Maine 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.

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 Cal-Maine 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.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Fish/Livestock industry, but it has also influenced the consumer preferences. Cal-Maine can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Cal-Maine is facing challenges because of the dominance of functional experts in the organization. Cal-Maine can utilize new technology in the field of Fish/Livestock industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Remote work and new talent hiring opportunities

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

Developing new processes and practices

– Cal-Maine can develop new processes and procedures in Fish/Livestock 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 Cal-Maine 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

– Cal-Maine 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.

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Threats Cal-Maine External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Cal-Maine are -

Shortening product life cycle

– it is one of the major threat that Cal-Maine is facing in Fish/Livestock 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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Cal-Maine may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Fish/Livestock 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 Cal-Maine business can come under increasing regulations regarding data privacy, data security, etc.

Environmental challenges

– Cal-Maine 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. Cal-Maine can take advantage of this fund but it will also bring new competitors in the Fish/Livestock 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 Cal-Maine.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Cal-Maine 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 Cal-Maine prominent markets.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Fish/Livestock industry are lowering. It can presents Cal-Maine with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Fish/Livestock sector.

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 Cal-Maine in the Fish/Livestock sector and impact the bottomline of the organization.

Consumer confidence and its impact on Cal-Maine 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 Fish/Livestock industry and other sectors.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Cal-Maine in Fish/Livestock industry. The Fish/Livestock 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.

Stagnating economy with rate increase

– Cal-Maine 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 Fish/Livestock industry.

High dependence on third party suppliers

– Cal-Maine 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.

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Weighted SWOT Analysis of Cal-Maine Template, Example

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

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