Fresh Del Monte Produce (FDP) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Fresh Del Monte Produce (United States)

Based on various researches at Oak Spring University , Fresh Del Monte Produce is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc

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Introduction to SWOT Analysis of Fresh Del Monte Produce

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Fresh Del Monte Produce can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fresh Del Monte Produce, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fresh Del Monte Produce 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 Fresh Del Monte Produce can be done for the following purposes –
1. Strategic planning of Fresh Del Monte Produce
2. Improving business portfolio management of Fresh Del Monte Produce
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 Fresh Del Monte Produce

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Strengths of Fresh Del Monte Produce | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Fresh Del Monte Produce are -

Successful track record of launching new products

– Fresh Del Monte Produce has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Fresh Del Monte Produce 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.

Effective Research and Development (R&D)

– Fresh Del Monte Produce has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Fresh Del Monte Produce 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.

High switching costs

– The high switching costs that Fresh Del Monte Produce 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.

Digital Transformation in Crops industry

- digital transformation varies from industry to industry. For Fresh Del Monte Produce digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Fresh Del Monte Produce 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.

Ability to recruit top talent

– Fresh Del Monte Produce 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.

Sustainable margins compare to other players in Crops industry

– Fresh Del Monte Produce has clearly differentiated products in the market place. This has enabled Fresh Del Monte Produce to fetch slight price premium compare to the competitors in the Crops industry. The sustainable margins have also helped Fresh Del Monte Produce to invest into research and development (R&D) and innovation.

Organizational Resilience of Fresh Del Monte Produce

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

Analytics focus

– Fresh Del Monte Produce 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 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.

Low bargaining power of suppliers

– Suppliers of Fresh Del Monte Produce in the Consumer/Non-Cyclical sector have low bargaining power. Fresh Del Monte Produce has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Fresh Del Monte Produce to manage not only supply disruptions but also source products at highly competitive prices.

High brand equity

– Fresh Del Monte Produce has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Fresh Del Monte Produce to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Cross disciplinary teams

– Horizontal connected teams at the Fresh Del Monte Produce 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.

Learning organization

- Fresh Del Monte Produce 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 Fresh Del Monte Produce is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Fresh Del Monte Produce emphasize – knowledge, initiative, and innovation.

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Weaknesses of Fresh Del Monte Produce | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Fresh Del Monte Produce are -

Aligning sales with marketing

– From the outside it seems that Fresh Del Monte Produce needs to have more collaboration between its sales team and marketing team. Sales professionals in the Crops industry have deep experience in developing customer relationships. Marketing department at Fresh Del Monte Produce can leverage the sales team experience to cultivate customer relationships as Fresh Del Monte Produce is planning to shift buying processes online.

Ability to respond to the competition

– As the decision making is very deliberative at Fresh Del Monte Produce, in the dynamic environment of Crops industry it has struggled to respond to the nimble upstart competition. Fresh Del Monte Produce has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

High cash cycle compare to competitors

Fresh Del Monte Produce 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.

High operating costs

– Compare to the competitors, Fresh Del Monte Produce 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 Fresh Del Monte Produce lucrative customers.

Slow decision making process

– As mentioned earlier in the report, Fresh Del Monte Produce has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Crops industry over the last five years. Fresh Del Monte Produce 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.

Slow to strategic competitive environment developments

– As Fresh Del Monte Produce is one of the leading players in the Crops industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Crops industry in last five years.

Interest costs

– Compare to the competition, Fresh Del Monte Produce 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 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 Fresh Del Monte Produce supply chain. Even after few cautionary changes, Fresh Del Monte Produce is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Fresh Del Monte Produce vulnerable to further global disruptions in South East Asia.

Skills based hiring in Crops industry

– The stress on hiring functional specialists at Fresh Del Monte Produce 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 Fresh Del Monte Produce is dominated by functional specialists. It is not different from other players in the Crops industry, but Fresh Del Monte Produce needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Fresh Del Monte Produce to focus more on services in the Crops industry rather than just following the product oriented approach.

High dependence on Fresh Del Monte Produce ‘s star products

– The top 2 products and services of Fresh Del Monte Produce 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 Fresh Del Monte Produce has relatively successful track record of launching new products.

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Fresh Del Monte Produce Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Fresh Del Monte Produce are -

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. Fresh Del Monte Produce can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Fresh Del Monte Produce can use these opportunities to build new business models that can help the communities that Fresh Del Monte Produce operates in. Secondly it can use opportunities from government spending in Crops sector.

Using analytics as competitive advantage

– Fresh Del Monte Produce 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 Fresh Del Monte Produce to build a competitive advantage using analytics. The analytics driven competitive advantage can help Fresh Del Monte Produce to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Fresh Del Monte Produce is facing challenges because of the dominance of functional experts in the organization. Fresh Del Monte Produce 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.

Creating value in data economy

– The success of analytics program of Fresh Del Monte Produce has opened avenues for new revenue streams for the organization in Crops industry. This can help Fresh Del Monte Produce to build a more holistic ecosystem for Fresh Del Monte Produce products in the Crops industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Building a culture of innovation

– managers at Fresh Del Monte Produce 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 Crops industry.

Buying journey improvements

– Fresh Del Monte Produce can improve the customer journey of consumers in the Crops 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.

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. Fresh Del Monte Produce can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Fresh Del Monte Produce 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 Fresh Del Monte Produce to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Learning at scale

– Online learning technologies has now opened space for Fresh Del Monte Produce 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.

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 Fresh Del Monte Produce in the Crops industry. Now Fresh Del Monte Produce can target international markets with far fewer capital restrictions requirements than the existing system.

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. Fresh Del Monte Produce 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. Fresh Del Monte Produce 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 Fresh Del Monte Produce 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.

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Threats Fresh Del Monte Produce External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Fresh Del Monte Produce are -

Consumer confidence and its impact on Fresh Del Monte Produce 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.

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. Fresh Del Monte Produce 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.

Stagnating economy with rate increase

– Fresh Del Monte Produce 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.

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 Fresh Del Monte Produce in the Crops sector and impact the bottomline of the organization.

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 Fresh Del Monte Produce business can come under increasing regulations regarding data privacy, data security, etc.

Shortening product life cycle

– it is one of the major threat that Fresh Del Monte Produce is facing in Crops sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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 Fresh Del Monte Produce.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Fresh Del Monte Produce 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 Fresh Del Monte Produce prominent markets.

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.

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.

Regulatory challenges

– Fresh Del Monte Produce 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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Fresh Del Monte Produce 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.

Environmental challenges

– Fresh Del Monte Produce 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. Fresh Del Monte Produce can take advantage of this fund but it will also bring new competitors in the Crops industry.

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Weighted SWOT Analysis of Fresh Del Monte Produce Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Fresh Del Monte Produce 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 Fresh Del Monte Produce 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 Fresh Del Monte Produce 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 Fresh Del Monte Produce 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 Fresh Del Monte Produce needs to make to build a sustainable competitive advantage.

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