Companhia de Distribuicao (CBD) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Companhia de Distribuicao (United States)

Based on various researches at Oak Spring University , Companhia de Distribuicao is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, increasing energy prices, talent flight as more people leaving formal jobs, geopolitical disruptions, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, etc

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Introduction to SWOT Analysis of Companhia de Distribuicao

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

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Strengths of Companhia de Distribuicao | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Companhia de Distribuicao are -

Highly skilled collaborators

– Companhia de Distribuicao 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 Companhia de Distribuicao have helped the firm to develop new products and bring them quickly to the marketplace.

Effective Research and Development (R&D)

– Companhia de Distribuicao has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Companhia de Distribuicao 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.

Operational resilience

– The operational resilience strategy of Companhia de Distribuicao comprises – understanding the underlying the factors in the Retail (Grocery) 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.

Strong track record of project management in the Retail (Grocery) industry

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

Analytics focus

– Companhia de Distribuicao 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 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.

Sustainable margins compare to other players in Retail (Grocery) industry

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

Low bargaining power of suppliers

– Suppliers of Companhia de Distribuicao in the Services sector have low bargaining power. Companhia de Distribuicao has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Companhia de Distribuicao to manage not only supply disruptions but also source products at highly competitive prices.

Ability to recruit top talent

– Companhia de Distribuicao is one of the leading players in the Retail (Grocery) 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.

Digital Transformation in Retail (Grocery) industry

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

Cross disciplinary teams

– Horizontal connected teams at the Companhia de Distribuicao 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.

High brand equity

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

Training and development

– Companhia de Distribuicao 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.

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Weaknesses of Companhia de Distribuicao | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Companhia de Distribuicao are -

Products dominated business model

– Even though Companhia de Distribuicao 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. Companhia de Distribuicao should strive to include more intangible value offerings along with its core products and services.

Employees’ less understanding of Companhia de Distribuicao strategy

– From the outside it seems that the employees of Companhia de Distribuicao 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.

No frontier risks strategy

– From the 10K / annual statement of Companhia de Distribuicao, it seems that company is thinking out the frontier risks that can impact Retail (Grocery) 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.

High dependence on Companhia de Distribuicao ‘s star products

– The top 2 products and services of Companhia de Distribuicao 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 Companhia de Distribuicao has relatively successful track record of launching new products.

Skills based hiring in Retail (Grocery) industry

– The stress on hiring functional specialists at Companhia de Distribuicao 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.

Compensation and incentives

– The revenue per employee of Companhia de Distribuicao 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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Companhia de Distribuicao is slow explore the new channels of communication. These new channels of communication can help Companhia de Distribuicao to provide better information regarding Retail (Grocery) products and services. It can also build an online community to further reach out to potential customers.

High cash cycle compare to competitors

Companhia de Distribuicao has a high cash cycle compare to other players in the Retail (Grocery) industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

High bargaining power of channel partners in Retail (Grocery) industry

– because of the regulatory requirements in United States, Companhia de Distribuicao 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 Retail (Grocery) industry.

Slow decision making process

– As mentioned earlier in the report, Companhia de Distribuicao 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. Companhia de Distribuicao 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.

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 Companhia de Distribuicao supply chain. Even after few cautionary changes, Companhia de Distribuicao is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Companhia de Distribuicao vulnerable to further global disruptions in South East Asia.

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Companhia de Distribuicao Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Companhia de Distribuicao are -

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Companhia de Distribuicao can use these opportunities to build new business models that can help the communities that Companhia de Distribuicao operates in. Secondly it can use opportunities from government spending in Retail (Grocery) sector.

Learning at scale

– Online learning technologies has now opened space for Companhia de Distribuicao 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.

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. Companhia de Distribuicao can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Loyalty marketing

– Companhia de Distribuicao 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.

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 Companhia de Distribuicao 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Companhia de Distribuicao is facing challenges because of the dominance of functional experts in the organization. Companhia de Distribuicao 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.

Buying journey improvements

– Companhia de Distribuicao 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.

Creating value in data economy

– The success of analytics program of Companhia de Distribuicao has opened avenues for new revenue streams for the organization in Retail (Grocery) industry. This can help Companhia de Distribuicao to build a more holistic ecosystem for Companhia de Distribuicao products in the Retail (Grocery) industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Reforming the budgeting process

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

Leveraging digital technologies

– Companhia de Distribuicao 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Companhia de Distribuicao 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 Companhia de Distribuicao to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Remote work and new talent hiring opportunities

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

Manufacturing automation

– Companhia de Distribuicao can use the latest technology developments to improve its manufacturing and designing process in Retail (Grocery) 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.

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Threats Companhia de Distribuicao External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Companhia de Distribuicao are -

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. Companhia de Distribuicao can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Retail (Grocery) industry are lowering. It can presents Companhia de Distribuicao with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Retail (Grocery) sector.

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.

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 Companhia de Distribuicao in the Retail (Grocery) sector and impact the bottomline of the organization.

Stagnating economy with rate increase

– Companhia de Distribuicao 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.

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 Companhia de Distribuicao business can come under increasing regulations regarding data privacy, data security, etc.

Consumer confidence and its impact on Companhia de Distribuicao 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 Retail (Grocery) industry and other sectors.

Shortening product life cycle

– it is one of the major threat that Companhia de Distribuicao is facing in Retail (Grocery) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Companhia de Distribuicao 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 Companhia de Distribuicao prominent markets.

Environmental challenges

– Companhia de Distribuicao 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. Companhia de Distribuicao can take advantage of this fund but it will also bring new competitors in the Retail (Grocery) industry.

High dependence on third party suppliers

– Companhia de Distribuicao 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.

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. Companhia de Distribuicao needs to understand the core reasons impacting the Retail (Grocery) industry. This will help it in building a better workplace.

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.

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Weighted SWOT Analysis of Companhia de Distribuicao Template, Example

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

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