Based on various researches at Oak Spring University , AGT Food & Ingredients is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, there is backlash against globalization,
challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of AGT Food & Ingredients
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that AGT Food & Ingredients can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the AGT Food & Ingredients, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which AGT Food & Ingredients 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 AGT Food & Ingredients can be done for the following purposes –
1. Strategic planning of AGT Food & Ingredients
2. Improving business portfolio management of AGT Food & Ingredients
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 AGT Food & Ingredients
Strengths of AGT Food & Ingredients | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of AGT Food & Ingredients are -
Successful track record of launching new products
– AGT Food & Ingredients has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. AGT Food & Ingredients 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.
Training and development
– AGT Food & Ingredients 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.
High brand equity
– AGT Food & Ingredients has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled AGT Food & Ingredients to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– AGT Food & Ingredients 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 AGT Food & Ingredients have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– AGT Food & Ingredients is present in almost all the verticals within the Crops industry. This has provided AGT Food & Ingredients 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.
Cross disciplinary teams
– Horizontal connected teams at the AGT Food & Ingredients 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.
Low bargaining power of suppliers
– Suppliers of AGT Food & Ingredients in the Consumer/Non-Cyclical sector have low bargaining power. AGT Food & Ingredients has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps AGT Food & Ingredients to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy of AGT Food & Ingredients 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.
Ability to recruit top talent
– AGT Food & Ingredients is one of the leading players in the Crops industry in Canada. It is in a position to attract the best talent available in Canada. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that AGT Food & Ingredients 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.
Superior customer experience
– The customer experience strategy of AGT Food & Ingredients in Crops industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- AGT Food & Ingredients 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 AGT Food & Ingredients is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at AGT Food & Ingredients emphasize – knowledge, initiative, and innovation.
Weaknesses of AGT Food & Ingredients | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of AGT Food & Ingredients are -
Skills based hiring in Crops industry
– The stress on hiring functional specialists at AGT Food & Ingredients 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 AGT Food & Ingredients, 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 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 AGT Food & Ingredients supply chain. Even after few cautionary changes, AGT Food & Ingredients is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left AGT Food & Ingredients vulnerable to further global disruptions in South East Asia.
High dependence on AGT Food & Ingredients ‘s star products
– The top 2 products and services of AGT Food & Ingredients 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 AGT Food & Ingredients has relatively successful track record of launching new products.
Lack of clear differentiation of AGT Food & Ingredients products
– To increase the profitability and margins on the products, AGT Food & Ingredients needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of AGT Food & Ingredients is dominated by functional specialists. It is not different from other players in the Crops industry, but AGT Food & Ingredients needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help AGT Food & Ingredients to focus more on services in the Crops industry rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, AGT Food & Ingredients has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Crops industry using digital technology.
Aligning sales with marketing
– From the outside it seems that AGT Food & Ingredients 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 AGT Food & Ingredients can leverage the sales team experience to cultivate customer relationships as AGT Food & Ingredients is planning to shift buying processes online.
Employees’ less understanding of AGT Food & Ingredients strategy
– From the outside it seems that the employees of AGT Food & Ingredients 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.
Need for greater diversity
– AGT Food & Ingredients 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.
High bargaining power of channel partners in Crops industry
– because of the regulatory requirements in Canada, AGT Food & Ingredients 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.
AGT Food & Ingredients Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of AGT Food & Ingredients are -
Learning at scale
– Online learning technologies has now opened space for AGT Food & Ingredients 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.
Loyalty marketing
– AGT Food & Ingredients 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. AGT Food & Ingredients 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. AGT Food & Ingredients 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.
Creating value in data economy
– The success of analytics program of AGT Food & Ingredients has opened avenues for new revenue streams for the organization in Crops industry. This can help AGT Food & Ingredients to build a more holistic ecosystem for AGT Food & Ingredients products in the Crops industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– AGT Food & Ingredients 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.
Buying journey improvements
– AGT Food & Ingredients 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.
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 AGT Food & Ingredients 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, AGT Food & Ingredients 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, AGT Food & Ingredients 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 AGT Food & Ingredients 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
– AGT Food & Ingredients 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.
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 AGT Food & Ingredients in the Crops industry. Now AGT Food & Ingredients can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at AGT Food & Ingredients 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for AGT Food & Ingredients 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 AGT Food & Ingredients to hire the very best people irrespective of their geographical location.
Threats AGT Food & Ingredients External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of AGT Food & Ingredients are -
Increasing wage structure of AGT Food & Ingredients
– 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 AGT Food & Ingredients.
Technology acceleration in Forth Industrial Revolution
– AGT Food & Ingredients has witnessed rapid integration of technology during Covid-19 in the Crops industry. As one of the leading players in the industry, AGT Food & Ingredients needs to keep up with the evolution of technology in the Crops 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 AGT Food & Ingredients.
Stagnating economy with rate increase
– AGT Food & Ingredients 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 AGT Food & Ingredients 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Crops industry are lowering. It can presents AGT Food & Ingredients with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Crops sector.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, AGT Food & Ingredients 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.
Regulatory challenges
– AGT Food & Ingredients 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 AGT Food & Ingredients is facing in Crops sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– AGT Food & Ingredients 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, AGT Food & Ingredients 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 AGT Food & Ingredients prominent markets.
Weighted SWOT Analysis of AGT Food & Ingredients Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at AGT Food & Ingredients 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 AGT Food & Ingredients 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 AGT Food & Ingredients 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 AGT Food & Ingredients 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 AGT Food & Ingredients needs to make to build a sustainable competitive advantage.
