Based on various researches at Oak Spring University , CHS Inc Pref is operating in a macro-environment that has been destablized by – challanges to central banks by blockchain based private currencies, geopolitical disruptions, cloud computing is disrupting traditional business models, wage bills are increasing, increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation,
increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that CHS Inc Pref can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the CHS Inc Pref, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which CHS Inc Pref operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of CHS Inc Pref can be done for the following purposes –
1. Strategic planning of CHS Inc Pref
2. Improving business portfolio management of CHS Inc Pref
3. Assessing feasibility of the new initiative in United States
4. Making a Crops sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of CHS Inc Pref
Strengths of CHS Inc Pref | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of CHS Inc Pref are -
Organizational Resilience of CHS Inc Pref
– The covid-19 pandemic has put organizational resilience at the centre of everthing CHS Inc Pref does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– CHS Inc Pref 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.
Digital Transformation in Crops industry
- digital transformation varies from industry to industry. For CHS Inc Pref digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. CHS Inc Pref 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.
High switching costs
– The high switching costs that CHS Inc Pref 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.
Sustainable margins compare to other players in Crops industry
– CHS Inc Pref has clearly differentiated products in the market place. This has enabled CHS Inc Pref to fetch slight price premium compare to the competitors in the Crops industry. The sustainable margins have also helped CHS Inc Pref to invest into research and development (R&D) and innovation.
Ability to lead change in Crops
– CHS Inc Pref is one of the leading players in the Crops industry in United States. Over the years it has not only transformed the business landscape in the Crops industry in United States but also across the existing markets. The ability to lead change has enabled CHS Inc Pref in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of CHS Inc Pref in the Consumer/Non-Cyclical sector have low bargaining power. CHS Inc Pref has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps CHS Inc Pref to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– CHS Inc Pref is one of the most innovative firm in Crops sector.
Successful track record of launching new products
– CHS Inc Pref has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. CHS Inc Pref 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.
Highly skilled collaborators
– CHS Inc Pref has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Crops industry. Secondly the value chain collaborators of CHS Inc Pref have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– CHS Inc Pref is one of the leading players in the Crops 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
- CHS Inc Pref 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 CHS Inc Pref is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at CHS Inc Pref emphasize – knowledge, initiative, and innovation.
Weaknesses of CHS Inc Pref | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of CHS Inc Pref are -
Lack of clear differentiation of CHS Inc Pref products
– To increase the profitability and margins on the products, CHS Inc Pref needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, CHS Inc Pref has high operating costs in the Crops industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract CHS Inc Pref lucrative customers.
High cash cycle compare to competitors
CHS Inc Pref has a high cash cycle compare to other players in the Crops industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Interest costs
– Compare to the competition, CHS Inc Pref 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 bargaining power of channel partners in Crops industry
– because of the regulatory requirements in United States, CHS Inc Pref 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 Crops industry.
Capital Spending Reduction
– Even during the low interest decade, CHS Inc Pref has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Crops industry using digital technology.
Ability to respond to the competition
– As the decision making is very deliberative at CHS Inc Pref, in the dynamic environment of Crops industry it has struggled to respond to the nimble upstart competition. CHS Inc Pref has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee of CHS Inc Pref is just above the Crops 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.
High dependence on CHS Inc Pref ‘s star products
– The top 2 products and services of CHS Inc Pref still accounts for major business revenue. This dependence on star products in Crops industry has resulted into insufficient focus on developing new products, even though CHS Inc Pref has relatively successful track record of launching new products.
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 CHS Inc Pref supply chain. Even after few cautionary changes, CHS Inc Pref is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left CHS Inc Pref vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of CHS Inc Pref is dominated by functional specialists. It is not different from other players in the Crops industry, but CHS Inc Pref needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help CHS Inc Pref to focus more on services in the Crops industry rather than just following the product oriented approach.
CHS Inc Pref Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of CHS Inc Pref are -
Manufacturing automation
– CHS Inc Pref can use the latest technology developments to improve its manufacturing and designing process in Crops 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.
Creating value in data economy
– The success of analytics program of CHS Inc Pref has opened avenues for new revenue streams for the organization in Crops industry. This can help CHS Inc Pref to build a more holistic ecosystem for CHS Inc Pref products in the Crops industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. CHS Inc Pref can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for CHS Inc Pref 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, CHS Inc Pref is facing challenges because of the dominance of functional experts in the organization. CHS Inc Pref can utilize new technology in the field of Crops industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, CHS Inc Pref can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Lowering marketing communication costs
– 5G expansion will open new opportunities for CHS Inc Pref in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Crops industry, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, CHS Inc Pref can use these opportunities to build new business models that can help the communities that CHS Inc Pref operates in. Secondly it can use opportunities from government spending in Crops sector.
Better consumer reach
– The expansion of the 5G network will help CHS Inc Pref to increase its market reach. CHS Inc Pref 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Crops industry, but it has also influenced the consumer preferences. CHS Inc Pref can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 CHS Inc Pref 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.
Use of Bitcoin and other crypto currencies for transactions in Crops industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for CHS Inc Pref in the Crops industry. Now CHS Inc Pref can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– CHS Inc Pref has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Crops sector. This continuous investment in analytics has enabled CHS Inc Pref to build a competitive advantage using analytics. The analytics driven competitive advantage can help CHS Inc Pref to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats CHS Inc Pref External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of CHS Inc Pref are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, CHS Inc Pref may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Crops 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 CHS Inc Pref business can come under increasing regulations regarding data privacy, data security, etc.
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 Crops industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. CHS Inc Pref can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of CHS Inc Pref
– 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 CHS Inc Pref.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, CHS Inc Pref 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 CHS Inc Pref prominent markets.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for CHS Inc Pref in Crops industry. The Crops 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
– CHS Inc Pref 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 Crops industry.
Environmental challenges
– CHS Inc Pref 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. CHS Inc Pref can take advantage of this fund but it will also bring new competitors in the Crops industry.
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 CHS Inc Pref in the Crops sector and impact the bottomline of the organization.
Regulatory challenges
– CHS Inc Pref 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 Crops industry regulations.
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 CHS Inc Pref.
High dependence on third party suppliers
– CHS Inc Pref 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.
Weighted SWOT Analysis of CHS Inc Pref Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at CHS Inc Pref 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 CHS Inc Pref 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 CHS Inc Pref 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 CHS Inc Pref 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 CHS Inc Pref needs to make to build a sustainable competitive advantage.