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 – digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, supply chains are disrupted by pandemic , increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions,
challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, 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 -
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.
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 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.
Analytics focus
– John B Sanfilippo&Son 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 Food Processing 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.
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.
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.
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.
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.
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.
Training and development
– John B Sanfilippo&Son 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)
– 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.
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.
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 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.
Aligning sales with marketing
– From the outside it seems that John B Sanfilippo&Son needs to have more collaboration between its sales team and marketing team. Sales professionals in the Food Processing industry have deep experience in developing customer relationships. Marketing department at John B Sanfilippo&Son can leverage the sales team experience to cultivate customer relationships as John B Sanfilippo&Son is planning to shift buying processes online.
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.
Skills based hiring in Food Processing industry
– The stress on hiring functional specialists at John B Sanfilippo&Son 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, John B Sanfilippo&Son is slow explore the new channels of communication. These new channels of communication can help John B Sanfilippo&Son to provide better information regarding Food Processing products and services. It can also build an online community to further reach out to potential customers.
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.
Slow decision making process
– As mentioned earlier in the report, John B Sanfilippo&Son has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Food Processing industry over the last five years. John B Sanfilippo&Son 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.
Increasing silos among functional specialists
– The organizational structure of John B Sanfilippo&Son is dominated by functional specialists. It is not different from other players in the Food Processing industry, but John B Sanfilippo&Son needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help John B Sanfilippo&Son to focus more on services in the Food Processing industry rather than just following the product oriented approach.
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.
Lack of clear differentiation of John B Sanfilippo&Son products
– To increase the profitability and margins on the products, John B Sanfilippo&Son needs to provide more differentiated products than what it is currently offering in the marketplace.
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 -
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Food Processing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. John B Sanfilippo&Son 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. John B Sanfilippo&Son 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.
Using analytics as competitive advantage
– John B Sanfilippo&Son has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Food Processing sector. This continuous investment in analytics has enabled John B Sanfilippo&Son to build a competitive advantage using analytics. The analytics driven competitive advantage can help John B Sanfilippo&Son to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– John B Sanfilippo&Son can improve the customer journey of consumers in the Food Processing 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.
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.
Manufacturing automation
– John B Sanfilippo&Son can use the latest technology developments to improve its manufacturing and designing process in Food Processing sector. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Better consumer reach
– The expansion of the 5G network will help John B Sanfilippo&Son to increase its market reach. John B Sanfilippo&Son will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Leveraging digital technologies
– John B Sanfilippo&Son 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.
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.
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.
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.
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.
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.
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.
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 -
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.
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.
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. John B Sanfilippo&Son 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.
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.
Environmental challenges
– John B Sanfilippo&Son 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. John B Sanfilippo&Son can take advantage of this fund but it will also bring new competitors in the Food Processing industry.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, John B Sanfilippo&Son may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Food Processing sector.
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.
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.
Technology acceleration in Forth Industrial Revolution
– John B Sanfilippo&Son has witnessed rapid integration of technology during Covid-19 in the Food Processing industry. As one of the leading players in the industry, John B Sanfilippo&Son needs to keep up with the evolution of technology in the Food Processing 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.
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.
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.
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.