Ag Growth Int (AFN) SWOT Analysis / TOWS Matrix / MBA Resources
Crops
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Ag Growth Int (Canada)
Based on various researches at Oak Spring University , Ag Growth Int is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models,
talent flight as more people leaving formal jobs, geopolitical disruptions, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Ag Growth Int can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ag Growth Int, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ag Growth Int 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 Ag Growth Int can be done for the following purposes –
1. Strategic planning of Ag Growth Int
2. Improving business portfolio management of Ag Growth Int
3. Assessing feasibility of the new initiative in Canada
4. Making a Crops sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ag Growth Int
Strengths of Ag Growth Int | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ag Growth Int are -
High switching costs
– The high switching costs that Ag Growth Int 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.
Diverse revenue streams
– Ag Growth Int is present in almost all the verticals within the Crops industry. This has provided Ag Growth Int 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.
Innovation driven organization
– Ag Growth Int is one of the most innovative firm in Crops sector.
Sustainable margins compare to other players in Crops industry
– Ag Growth Int has clearly differentiated products in the market place. This has enabled Ag Growth Int to fetch slight price premium compare to the competitors in the Crops industry. The sustainable margins have also helped Ag Growth Int to invest into research and development (R&D) and innovation.
High brand equity
– Ag Growth Int has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ag Growth Int to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Ag Growth Int 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.
Effective Research and Development (R&D)
– Ag Growth Int has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Ag Growth Int staying ahead in the Crops industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy of Ag Growth Int comprises – understanding the underlying the factors in the Crops 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.
Analytics focus
– Ag Growth Int 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 Crops industry. The technology infrastructure of Canada 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 Crops industry
- digital transformation varies from industry to industry. For Ag Growth Int digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ag Growth Int 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.
Highly skilled collaborators
– Ag Growth Int 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 Ag Growth Int have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Ag Growth Int in the Consumer/Non-Cyclical sector have low bargaining power. Ag Growth Int has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ag Growth Int to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses of Ag Growth Int | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ag Growth Int are -
High cash cycle compare to competitors
Ag Growth Int 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.
No frontier risks strategy
– From the 10K / annual statement of Ag Growth Int, it seems that company is thinking out the frontier risks that can impact Crops 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 Crops industry
– because of the regulatory requirements in Canada, Ag Growth Int 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.
Ability to respond to the competition
– As the decision making is very deliberative at Ag Growth Int, in the dynamic environment of Crops industry it has struggled to respond to the nimble upstart competition. Ag Growth Int has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on Ag Growth Int ‘s star products
– The top 2 products and services of Ag Growth Int 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 Ag Growth Int 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 Ag Growth Int supply chain. Even after few cautionary changes, Ag Growth Int is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ag Growth Int vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, Ag Growth Int 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 Ag Growth Int lucrative customers.
Skills based hiring in Crops industry
– The stress on hiring functional specialists at Ag Growth Int 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.
Increasing silos among functional specialists
– The organizational structure of Ag Growth Int is dominated by functional specialists. It is not different from other players in the Crops industry, but Ag Growth Int needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ag Growth Int to focus more on services in the Crops industry rather than just following the product oriented approach.
Products dominated business model
– Even though Ag Growth Int has some of the most successful models in the Crops industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Ag Growth Int should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Ag Growth Int 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.
Ag Growth Int Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Ag Growth Int are -
Using analytics as competitive advantage
– Ag Growth Int 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 Ag Growth Int to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ag Growth Int to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Ag Growth Int can develop new processes and procedures in Crops 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ag Growth Int can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Ag Growth Int has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Crops industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Ag Growth Int 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. Ag Growth Int 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.
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. Ag Growth Int 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 Ag Growth Int 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ag Growth Int can use these opportunities to build new business models that can help the communities that Ag Growth Int operates in. Secondly it can use opportunities from government spending in Crops sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ag Growth Int 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.
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 Ag Growth Int 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ag Growth Int 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.
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 Ag Growth Int in the Crops industry. Now Ag Growth Int can target international markets with far fewer capital restrictions requirements than the existing system.
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. Ag Growth Int can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Ag Growth Int External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Ag Growth Int are -
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. Ag Growth Int can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ag Growth Int 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.
Regulatory challenges
– Ag Growth Int 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.
Shortening product life cycle
– it is one of the major threat that Ag Growth Int is facing in Crops sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Ag Growth Int 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.
High dependence on third party suppliers
– Ag Growth Int 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.
Stagnating economy with rate increase
– Ag Growth Int 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.
Consumer confidence and its impact on Ag Growth Int 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 Crops industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Ag Growth Int 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.
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. Ag Growth Int needs to understand the core reasons impacting the Crops industry. This will help it in building a better workplace.
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 Ag Growth Int in the Crops sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Ag Growth Int Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Ag Growth Int 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 Ag Growth Int 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 Ag Growth Int 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 Ag Growth Int 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 Ag Growth Int needs to make to build a sustainable competitive advantage.