John B Sanfilippo&Son (JBSS) SWOT Analysis / TOWS Matrix / MBA Resources
Food Processing
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for John B Sanfilippo&Son (United States)
Based on various researches at Oak Spring University , John B Sanfilippo&Son is operating in a macro-environment that has been destablized by – challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, wage bills are increasing, increasing commodity prices, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation,
increasing transportation and logistics costs, increasing energy prices, etc
Introduction to SWOT Analysis of John B Sanfilippo&Son
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that John B Sanfilippo&Son can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the John B Sanfilippo&Son, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which John B Sanfilippo&Son 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 John B Sanfilippo&Son can be done for the following purposes –
1. Strategic planning of John B Sanfilippo&Son
2. Improving business portfolio management of John B Sanfilippo&Son
3. Assessing feasibility of the new initiative in United States
4. Making a Food Processing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of John B Sanfilippo&Son
Strengths of John B Sanfilippo&Son | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of John B Sanfilippo&Son are -
Strong track record of project management in the Food Processing industry
– John B Sanfilippo&Son is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– John B Sanfilippo&Son has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – John B Sanfilippo&Son staying ahead in the Food Processing industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– John B Sanfilippo&Son is present in almost all the verticals within the Food Processing industry. This has provided John B Sanfilippo&Son 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.
Operational resilience
– The operational resilience strategy of John B Sanfilippo&Son comprises – understanding the underlying the factors in the Food Processing 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.
Sustainable margins compare to other players in Food Processing industry
– John B Sanfilippo&Son has clearly differentiated products in the market place. This has enabled John B Sanfilippo&Son to fetch slight price premium compare to the competitors in the Food Processing industry. The sustainable margins have also helped John B Sanfilippo&Son to invest into research and development (R&D) and innovation.
Organizational Resilience of John B Sanfilippo&Son
– The covid-19 pandemic has put organizational resilience at the centre of everthing John B Sanfilippo&Son does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of John B Sanfilippo&Son in Food Processing industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– John B Sanfilippo&Son has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. John B Sanfilippo&Son 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.
High switching costs
– The high switching costs that John B Sanfilippo&Son 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.
Low bargaining power of suppliers
– Suppliers of John B Sanfilippo&Son in the Consumer/Non-Cyclical sector have low bargaining power. John B Sanfilippo&Son has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps John B Sanfilippo&Son to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- John B Sanfilippo&Son 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 John B Sanfilippo&Son is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at John B Sanfilippo&Son emphasize – knowledge, initiative, and innovation.
High brand equity
– John B Sanfilippo&Son has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled John B Sanfilippo&Son to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of John B Sanfilippo&Son | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of John B Sanfilippo&Son are -
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 John B Sanfilippo&Son supply chain. Even after few cautionary changes, John B Sanfilippo&Son is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left John B Sanfilippo&Son vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though John B Sanfilippo&Son has some of the most successful models in the Food Processing industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. John B Sanfilippo&Son should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee of John B Sanfilippo&Son is just above the Food Processing 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.
Employees’ less understanding of John B Sanfilippo&Son strategy
– From the outside it seems that the employees of John B Sanfilippo&Son 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.
High dependence on John B Sanfilippo&Son ‘s star products
– The top 2 products and services of John B Sanfilippo&Son still accounts for major business revenue. This dependence on star products in Food Processing industry has resulted into insufficient focus on developing new products, even though John B Sanfilippo&Son has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the Food Processing industry, John B Sanfilippo&Son needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Capital Spending Reduction
– Even during the low interest decade, John B Sanfilippo&Son 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 Food Processing industry using digital technology.
Need for greater diversity
– John B Sanfilippo&Son 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.
Interest costs
– Compare to the competition, John B Sanfilippo&Son 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.
Slow to strategic competitive environment developments
– As John B Sanfilippo&Son is one of the leading players in the Food Processing industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Food Processing industry in last five years.
High operating costs
– Compare to the competitors, John B Sanfilippo&Son has high operating costs in the Food Processing industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract John B Sanfilippo&Son lucrative customers.
John B Sanfilippo&Son Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of John B Sanfilippo&Son are -
Use of Bitcoin and other crypto currencies for transactions in Food Processing industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for John B Sanfilippo&Son in the Food Processing industry. Now John B Sanfilippo&Son can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for John B Sanfilippo&Son 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.
Developing new processes and practices
– John B Sanfilippo&Son can develop new processes and procedures in Food Processing 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, John B Sanfilippo&Son 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 John B Sanfilippo&Son to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects John B Sanfilippo&Son can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at John B Sanfilippo&Son 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 Food Processing industry.
Lowering marketing communication costs
– 5G expansion will open new opportunities for John B Sanfilippo&Son in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Food Processing industry, and it will provide faster access to the consumers.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for John B Sanfilippo&Son 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 John B Sanfilippo&Son to hire the very best people irrespective of their geographical location.
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 John B Sanfilippo&Son 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.
Loyalty marketing
– John B Sanfilippo&Son 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.
Creating value in data economy
– The success of analytics program of John B Sanfilippo&Son has opened avenues for new revenue streams for the organization in Food Processing industry. This can help John B Sanfilippo&Son to build a more holistic ecosystem for John B Sanfilippo&Son products in the Food Processing industry by providing – data insight services, data privacy related products, data based consulting services, etc.
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. John B Sanfilippo&Son can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, John B Sanfilippo&Son is facing challenges because of the dominance of functional experts in the organization. John B Sanfilippo&Son can utilize new technology in the field of Food Processing industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats John B Sanfilippo&Son External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of John B Sanfilippo&Son are -
Stagnating economy with rate increase
– John B Sanfilippo&Son 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 Food Processing industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, John B Sanfilippo&Son 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 John B Sanfilippo&Son prominent markets.
Increasing wage structure of John B Sanfilippo&Son
– 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 John B Sanfilippo&Son.
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 John B Sanfilippo&Son in the Food Processing sector and impact the bottomline of the organization.
Consumer confidence and its impact on John B Sanfilippo&Son 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 Food Processing industry and other sectors.
Regulatory challenges
– John B Sanfilippo&Son 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 Food Processing industry regulations.
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 John B Sanfilippo&Son business can come under increasing regulations regarding data privacy, data security, etc.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for John B Sanfilippo&Son in Food Processing industry. The Food Processing 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.
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 John B Sanfilippo&Son.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Food Processing industry are lowering. It can presents John B Sanfilippo&Son with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Food Processing sector.
Easy access to finance
– Easy access to finance in Food Processing industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. John B Sanfilippo&Son can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– John B Sanfilippo&Son 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.
Weighted SWOT Analysis of John B Sanfilippo&Son Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at John B Sanfilippo&Son 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 John B Sanfilippo&Son 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 John B Sanfilippo&Son 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 John B Sanfilippo&Son 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 John B Sanfilippo&Son needs to make to build a sustainable competitive advantage.