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 – increasing energy prices, there is increasing trade war between United States & China, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, wage bills are increasing, geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, 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 -

Training and development

– Compania Cervecerias Unidas 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.

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.

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.

High switching costs

– The high switching costs that Compania Cervecerias Unidas 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.

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.

Organizational Resilience of Compania Cervecerias Unidas

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

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.

Innovation driven organization

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

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.

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.

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.

Ability to recruit top talent

– Compania Cervecerias Unidas is one of the leading players in the Beverages (Alcoholic) 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.

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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 -

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.

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.

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 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.

Lack of clear differentiation of Compania Cervecerias Unidas products

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

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.

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.

Slow decision making process

– As mentioned earlier in the report, Compania Cervecerias Unidas has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Beverages (Alcoholic) industry over the last five years. Compania Cervecerias Unidas 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.

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.

Employees’ less understanding of Compania Cervecerias Unidas strategy

– From the outside it seems that the employees of Compania Cervecerias Unidas 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.

High operating costs

– Compare to the competitors, Compania Cervecerias Unidas has high operating costs in the Beverages (Alcoholic) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Compania Cervecerias Unidas lucrative customers.

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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.

Buying journey improvements

– Compania Cervecerias Unidas can improve the customer journey of consumers in the Beverages (Alcoholic) 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.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Beverages (Alcoholic) industry, but it has also influenced the consumer preferences. Compania Cervecerias Unidas can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Creating value in data economy

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

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.

Using analytics as competitive advantage

– Compania Cervecerias Unidas has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Beverages (Alcoholic) sector. This continuous investment in analytics has enabled Compania Cervecerias Unidas to build a competitive advantage using analytics. The analytics driven competitive advantage can help Compania Cervecerias Unidas to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

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.

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.

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.

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.

Reforming the budgeting process

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

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.

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.

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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 -

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.

Stagnating economy with rate increase

– Compania Cervecerias Unidas 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 Beverages (Alcoholic) industry.

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.

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.

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.

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.

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.

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.

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.

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.

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.

Instability in the European markets

– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Compania Cervecerias Unidas will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.

Shortening product life cycle

– it is one of the major threat that Compania Cervecerias Unidas is facing in Beverages (Alcoholic) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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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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