Based on various researches at Oak Spring University , Davide Campari-Milano SpA is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, increasing transportation and logistics costs, supply chains are disrupted by pandemic , there is backlash against globalization,
increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Davide Campari-Milano SpA
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Davide Campari-Milano SpA can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Davide Campari-Milano SpA, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Davide Campari-Milano SpA 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 Davide Campari-Milano SpA can be done for the following purposes –
1. Strategic planning of Davide Campari-Milano SpA
2. Improving business portfolio management of Davide Campari-Milano SpA
3. Assessing feasibility of the new initiative in United States
4. Making a sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Davide Campari-Milano SpA
Strengths of Davide Campari-Milano SpA | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Davide Campari-Milano SpA are -
High brand equity
– Davide Campari-Milano SpA has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Davide Campari-Milano SpA to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management in the industry
– Davide Campari-Milano SpA is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Davide Campari-Milano SpA is one of the most innovative firm in sector.
Low bargaining power of suppliers
– Suppliers of Davide Campari-Milano SpA in the sector have low bargaining power. Davide Campari-Milano SpA has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Davide Campari-Milano SpA to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Davide Campari-Milano SpA has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive industry. Secondly the value chain collaborators of Davide Campari-Milano SpA have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in
– Davide Campari-Milano SpA is one of the leading players in the industry in United States. Over the years it has not only transformed the business landscape in the industry in United States but also across the existing markets. The ability to lead change has enabled Davide Campari-Milano SpA in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in industry
- digital transformation varies from industry to industry. For Davide Campari-Milano SpA digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Davide Campari-Milano SpA 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.
Analytics focus
– Davide Campari-Milano SpA 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 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.
Superior customer experience
– The customer experience strategy of Davide Campari-Milano SpA in industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Davide Campari-Milano SpA is present in almost all the verticals within the industry. This has provided Davide Campari-Milano SpA 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.
Ability to recruit top talent
– Davide Campari-Milano SpA is one of the leading players in the 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.
Cross disciplinary teams
– Horizontal connected teams at the Davide Campari-Milano SpA 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.
Weaknesses of Davide Campari-Milano SpA | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Davide Campari-Milano SpA are -
Lack of clear differentiation of Davide Campari-Milano SpA products
– To increase the profitability and margins on the products, Davide Campari-Milano SpA needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– From the outside it seems that Davide Campari-Milano SpA needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department at Davide Campari-Milano SpA can leverage the sales team experience to cultivate customer relationships as Davide Campari-Milano SpA is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of United States, Davide Campari-Milano SpA needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative at Davide Campari-Milano SpA, in the dynamic environment of industry it has struggled to respond to the nimble upstart competition. Davide Campari-Milano SpA 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 Davide Campari-Milano SpA is just above the 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 Davide Campari-Milano SpA ‘s star products
– The top 2 products and services of Davide Campari-Milano SpA still accounts for major business revenue. This dependence on star products in industry has resulted into insufficient focus on developing new products, even though Davide Campari-Milano SpA has relatively successful track record of launching new products.
Employees’ less understanding of Davide Campari-Milano SpA strategy
– From the outside it seems that the employees of Davide Campari-Milano SpA 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.
Increasing silos among functional specialists
– The organizational structure of Davide Campari-Milano SpA is dominated by functional specialists. It is not different from other players in the industry, but Davide Campari-Milano SpA needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Davide Campari-Milano SpA to focus more on services in the industry rather than just following the product oriented approach.
High bargaining power of channel partners in industry
– because of the regulatory requirements in United States, Davide Campari-Milano SpA 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 industry.
Capital Spending Reduction
– Even during the low interest decade, Davide Campari-Milano SpA 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 industry using digital technology.
Products dominated business model
– Even though Davide Campari-Milano SpA has some of the most successful models in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Davide Campari-Milano SpA should strive to include more intangible value offerings along with its core products and services.
Davide Campari-Milano SpA Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Davide Campari-Milano SpA are -
Using analytics as competitive advantage
– Davide Campari-Milano SpA has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in sector. This continuous investment in analytics has enabled Davide Campari-Milano SpA to build a competitive advantage using analytics. The analytics driven competitive advantage can help Davide Campari-Milano SpA to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Davide Campari-Milano SpA can improve the customer journey of consumers in the 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.
Manufacturing automation
– Davide Campari-Milano SpA can use the latest technology developments to improve its manufacturing and designing process in 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Davide Campari-Milano SpA 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. Davide Campari-Milano SpA 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Davide Campari-Milano SpA in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the industry, and it will provide faster access to the consumers.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in industry, but it has also influenced the consumer preferences. Davide Campari-Milano SpA can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Davide Campari-Milano SpA can develop new processes and procedures in 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.
Use of Bitcoin and other crypto currencies for transactions in industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Davide Campari-Milano SpA in the industry. Now Davide Campari-Milano SpA can target international markets with far fewer capital restrictions requirements than the existing system.
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 Davide Campari-Milano SpA 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Davide Campari-Milano SpA can use these opportunities to build new business models that can help the communities that Davide Campari-Milano SpA operates in. Secondly it can use opportunities from government spending in sector.
Building a culture of innovation
– managers at Davide Campari-Milano SpA 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 industry.
Creating value in data economy
– The success of analytics program of Davide Campari-Milano SpA has opened avenues for new revenue streams for the organization in industry. This can help Davide Campari-Milano SpA to build a more holistic ecosystem for Davide Campari-Milano SpA products in the industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Davide Campari-Milano SpA can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Davide Campari-Milano SpA External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Davide Campari-Milano SpA are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Davide Campari-Milano SpA may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of sector.
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.
Easy access to finance
– Easy access to finance in industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Davide Campari-Milano SpA 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
– Davide Campari-Milano SpA has witnessed rapid integration of technology during Covid-19 in the industry. As one of the leading players in the industry, Davide Campari-Milano SpA needs to keep up with the evolution of technology in the 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 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. Davide Campari-Milano SpA needs to understand the core reasons impacting the industry. This will help it in building a better workplace.
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 Davide Campari-Milano SpA business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to industry are lowering. It can presents Davide Campari-Milano SpA with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Davide Campari-Milano SpA in industry. The 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.
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.
Shortening product life cycle
– it is one of the major threat that Davide Campari-Milano SpA is facing in sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Davide Campari-Milano SpA 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 Davide Campari-Milano SpA prominent markets.
Increasing wage structure of Davide Campari-Milano SpA
– 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 Davide Campari-Milano SpA.
Environmental challenges
– Davide Campari-Milano SpA 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. Davide Campari-Milano SpA can take advantage of this fund but it will also bring new competitors in the industry.
Weighted SWOT Analysis of Davide Campari-Milano SpA Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Davide Campari-Milano SpA 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 Davide Campari-Milano SpA 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 Davide Campari-Milano SpA 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 Davide Campari-Milano SpA 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 Davide Campari-Milano SpA needs to make to build a sustainable competitive advantage.