Compania Cervecerias Unidas (CCU) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Compania Cervecerias Unidas (United States)

Based on various researches at Oak Spring University , Compania Cervecerias Unidas is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , wage bills are increasing, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, etc

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Introduction to SWOT Analysis of Compania Cervecerias Unidas

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

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Strengths of Compania Cervecerias Unidas | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Compania Cervecerias Unidas are -

Innovation driven organization

– Compania Cervecerias Unidas is one of the most innovative firm in Beverages (Alcoholic) sector.

Learning organization

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

Analytics focus

– Compania Cervecerias Unidas is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the Beverages (Alcoholic) 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.

Digital Transformation in Beverages (Alcoholic) industry

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

Low bargaining power of suppliers

– Suppliers of Compania Cervecerias Unidas in the Consumer/Non-Cyclical sector have low bargaining power. Compania Cervecerias Unidas has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Compania Cervecerias Unidas to manage not only supply disruptions but also source products at highly competitive prices.

Operational resilience

– The operational resilience strategy of Compania Cervecerias Unidas comprises – understanding the underlying the factors in the Beverages (Alcoholic) 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.

High brand equity

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

Strong track record of project management in the Beverages (Alcoholic) industry

– Compania Cervecerias Unidas 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

– Compania Cervecerias Unidas has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Compania Cervecerias Unidas has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.

Sustainable margins compare to other players in Beverages (Alcoholic) industry

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

Superior customer experience

– The customer experience strategy of Compania Cervecerias Unidas in Beverages (Alcoholic) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

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Weaknesses of Compania Cervecerias Unidas | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Compania Cervecerias Unidas are -

Increasing silos among functional specialists

– The organizational structure of Compania Cervecerias Unidas is dominated by functional specialists. It is not different from other players in the Beverages (Alcoholic) industry, but Compania Cervecerias Unidas needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Compania Cervecerias Unidas to focus more on services in the Beverages (Alcoholic) industry rather than just following the product oriented approach.

Need for greater diversity

– Compania Cervecerias Unidas 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.

Slow to harness new channels of communication

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

Low market penetration in new markets

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

High cash cycle compare to competitors

Compania Cervecerias Unidas has a high cash cycle compare to other players in the Beverages (Alcoholic) industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Skills based hiring in Beverages (Alcoholic) industry

– The stress on hiring functional specialists at Compania Cervecerias Unidas 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.

Interest costs

– Compare to the competition, Compania Cervecerias Unidas 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.

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

High bargaining power of channel partners in Beverages (Alcoholic) industry

– because of the regulatory requirements in United States, Compania Cervecerias Unidas is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Beverages (Alcoholic) industry.

Aligning sales with marketing

– From the outside it seems that Compania Cervecerias Unidas needs to have more collaboration between its sales team and marketing team. Sales professionals in the Beverages (Alcoholic) industry have deep experience in developing customer relationships. Marketing department at Compania Cervecerias Unidas can leverage the sales team experience to cultivate customer relationships as Compania Cervecerias Unidas is planning to shift buying processes online.

Products dominated business model

– Even though Compania Cervecerias Unidas has some of the most successful models in the Beverages (Alcoholic) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Compania Cervecerias Unidas should strive to include more intangible value offerings along with its core products and services.

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Compania Cervecerias Unidas Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Compania Cervecerias Unidas are -

Redefining models of collaboration and team work

– As explained in the weaknesses section, Compania Cervecerias Unidas is facing challenges because of the dominance of functional experts in the organization. Compania Cervecerias Unidas can utilize new technology in the field of Beverages (Alcoholic) 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 Compania Cervecerias Unidas 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. Compania Cervecerias Unidas can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Beverages (Alcoholic) industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Compania Cervecerias Unidas 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. Compania Cervecerias Unidas can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.

Remote work and new talent hiring opportunities

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

Developing new processes and practices

– Compania Cervecerias Unidas can develop new processes and procedures in Beverages (Alcoholic) 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.

Building a culture of innovation

– managers at Compania Cervecerias Unidas can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Beverages (Alcoholic) industry.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Compania Cervecerias Unidas in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Beverages (Alcoholic) industry, and it will provide faster access to the consumers.

Manufacturing automation

– Compania Cervecerias Unidas can use the latest technology developments to improve its manufacturing and designing process in Beverages (Alcoholic) 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.

Better consumer reach

– The expansion of the 5G network will help Compania Cervecerias Unidas to increase its market reach. Compania Cervecerias Unidas 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.

Use of Bitcoin and other crypto currencies for transactions in Beverages (Alcoholic) industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Compania Cervecerias Unidas in the Beverages (Alcoholic) industry. Now Compania Cervecerias Unidas can target international markets with far fewer capital restrictions requirements than the existing system.

Increase in government spending

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

Leveraging digital technologies

– Compania Cervecerias Unidas 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.

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Threats Compania Cervecerias Unidas External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Compania Cervecerias Unidas are -

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Beverages (Alcoholic) industry are lowering. It can presents Compania Cervecerias Unidas with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Beverages (Alcoholic) sector.

Increasing wage structure of Compania Cervecerias Unidas

– 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 Compania Cervecerias Unidas.

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.

Technology acceleration in Forth Industrial Revolution

– Compania Cervecerias Unidas has witnessed rapid integration of technology during Covid-19 in the Beverages (Alcoholic) industry. As one of the leading players in the industry, Compania Cervecerias Unidas needs to keep up with the evolution of technology in the Beverages (Alcoholic) sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.

High dependence on third party suppliers

– Compania Cervecerias Unidas 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.

Regulatory challenges

– Compania Cervecerias Unidas needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Beverages (Alcoholic) industry regulations.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Compania Cervecerias Unidas 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 Compania Cervecerias Unidas prominent markets.

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. Compania Cervecerias Unidas needs to understand the core reasons impacting the Beverages (Alcoholic) industry. This will help it in building a better workplace.

Easy access to finance

– Easy access to finance in Beverages (Alcoholic) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Compania Cervecerias Unidas can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Consumer confidence and its impact on Compania Cervecerias Unidas 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 Beverages (Alcoholic) industry and other sectors.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Compania Cervecerias Unidas may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Beverages (Alcoholic) 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 Compania Cervecerias Unidas in the Beverages (Alcoholic) sector and impact the bottomline of the organization.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Compania Cervecerias Unidas in Beverages (Alcoholic) industry. The Beverages (Alcoholic) 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.

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Weighted SWOT Analysis of Compania Cervecerias Unidas Template, Example

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

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