Based on various researches at Oak Spring University , Drinks Americas Hldg is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, increasing commodity prices, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, increasing energy prices, supply chains are disrupted by pandemic ,
cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Drinks Americas Hldg
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Drinks Americas Hldg can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Drinks Americas Hldg, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Drinks Americas Hldg 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 Drinks Americas Hldg can be done for the following purposes –
1. Strategic planning of Drinks Americas Hldg
2. Improving business portfolio management of Drinks Americas Hldg
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 Drinks Americas Hldg
Strengths of Drinks Americas Hldg | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Drinks Americas Hldg are -
Ability to lead change in Beverages (Alcoholic)
– Drinks Americas Hldg is one of the leading players in the Beverages (Alcoholic) industry in United States. Over the years it has not only transformed the business landscape in the Beverages (Alcoholic) industry in United States but also across the existing markets. The ability to lead change has enabled Drinks Americas Hldg in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Drinks Americas Hldg is one of the most innovative firm in Beverages (Alcoholic) sector.
Digital Transformation in Beverages (Alcoholic) industry
- digital transformation varies from industry to industry. For Drinks Americas Hldg digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Drinks Americas Hldg 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.
Learning organization
- Drinks Americas Hldg 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 Drinks Americas Hldg is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Drinks Americas Hldg emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Drinks Americas Hldg has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Beverages (Alcoholic) industry. Secondly the value chain collaborators of Drinks Americas Hldg have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Drinks Americas Hldg is present in almost all the verticals within the Beverages (Alcoholic) industry. This has provided Drinks Americas Hldg a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Successful track record of launching new products
– Drinks Americas Hldg has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Drinks Americas Hldg 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.
Strong track record of project management in the Beverages (Alcoholic) industry
– Drinks Americas Hldg is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Drinks Americas Hldg has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Drinks Americas Hldg to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Drinks Americas Hldg has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Drinks Americas Hldg staying ahead in the Beverages (Alcoholic) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Drinks Americas Hldg in the Consumer/Non-Cyclical sector have low bargaining power. Drinks Americas Hldg has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Drinks Americas Hldg to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy of Drinks Americas Hldg 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.
Weaknesses of Drinks Americas Hldg | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Drinks Americas Hldg are -
High cash cycle compare to competitors
Drinks Americas Hldg 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.
Compensation and incentives
– The revenue per employee of Drinks Americas Hldg is just above the Beverages (Alcoholic) 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.
Need for greater diversity
– Drinks Americas Hldg 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.
Aligning sales with marketing
– From the outside it seems that Drinks Americas Hldg 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 Drinks Americas Hldg can leverage the sales team experience to cultivate customer relationships as Drinks Americas Hldg is planning to shift buying processes online.
High operating costs
– Compare to the competitors, Drinks Americas Hldg 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 Drinks Americas Hldg lucrative customers.
High dependence on Drinks Americas Hldg ‘s star products
– The top 2 products and services of Drinks Americas Hldg still accounts for major business revenue. This dependence on star products in Beverages (Alcoholic) industry has resulted into insufficient focus on developing new products, even though Drinks Americas Hldg has relatively successful track record of launching new products.
Lack of clear differentiation of Drinks Americas Hldg products
– To increase the profitability and margins on the products, Drinks Americas Hldg needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring in Beverages (Alcoholic) industry
– The stress on hiring functional specialists at Drinks Americas Hldg 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.
No frontier risks strategy
– From the 10K / annual statement of Drinks Americas Hldg, it seems that company is thinking out the frontier risks that can impact Beverages (Alcoholic) 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 bargaining power of channel partners in Beverages (Alcoholic) industry
– because of the regulatory requirements in United States, Drinks Americas Hldg 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.
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 Drinks Americas Hldg supply chain. Even after few cautionary changes, Drinks Americas Hldg is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Drinks Americas Hldg vulnerable to further global disruptions in South East Asia.
Drinks Americas Hldg Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Drinks Americas Hldg are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Drinks Americas Hldg can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Drinks Americas Hldg 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 Drinks Americas Hldg to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Drinks Americas Hldg can use these opportunities to build new business models that can help the communities that Drinks Americas Hldg operates in. Secondly it can use opportunities from government spending in Beverages (Alcoholic) sector.
Leveraging digital technologies
– Drinks Americas Hldg 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.
Manufacturing automation
– Drinks Americas Hldg 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Drinks Americas Hldg 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 Drinks Americas Hldg to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Drinks Americas Hldg 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.
Creating value in data economy
– The success of analytics program of Drinks Americas Hldg has opened avenues for new revenue streams for the organization in Beverages (Alcoholic) industry. This can help Drinks Americas Hldg to build a more holistic ecosystem for Drinks Americas Hldg products in the Beverages (Alcoholic) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Drinks Americas Hldg 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Drinks Americas Hldg 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 Drinks Americas Hldg 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.
Buying journey improvements
– Drinks Americas Hldg 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.
Learning at scale
– Online learning technologies has now opened space for Drinks Americas Hldg 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.
Threats Drinks Americas Hldg External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Drinks Americas Hldg are -
Shortening product life cycle
– it is one of the major threat that Drinks Americas Hldg is facing in Beverages (Alcoholic) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Drinks Americas Hldg 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.
Increasing wage structure of Drinks Americas Hldg
– 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 Drinks Americas Hldg.
Environmental challenges
– Drinks Americas Hldg 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. Drinks Americas Hldg can take advantage of this fund but it will also bring new competitors 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. Drinks Americas Hldg needs to understand the core reasons impacting the Beverages (Alcoholic) industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Drinks Americas Hldg 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.
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.
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. Drinks Americas Hldg 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.
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. Drinks Americas Hldg can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Drinks Americas Hldg 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 Drinks Americas Hldg prominent markets.
Technology acceleration in Forth Industrial Revolution
– Drinks Americas Hldg has witnessed rapid integration of technology during Covid-19 in the Beverages (Alcoholic) industry. As one of the leading players in the industry, Drinks Americas Hldg 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.
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 Drinks Americas Hldg.
Regulatory challenges
– Drinks Americas Hldg 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.
Weighted SWOT Analysis of Drinks Americas Hldg Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Drinks Americas Hldg 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 Drinks Americas Hldg 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 Drinks Americas Hldg 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 Drinks Americas Hldg 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 Drinks Americas Hldg needs to make to build a sustainable competitive advantage.