Jeronimo Martins SGPS SA ADR (JRONY) SWOT Analysis / TOWS Matrix / MBA Resources
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Jeronimo Martins SGPS SA ADR (United States)
Based on various researches at Oak Spring University , Jeronimo Martins SGPS SA ADR is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, geopolitical disruptions, increasing energy prices, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models,
central banks are concerned over increasing inflation, there is backlash against globalization, etc
Introduction to SWOT Analysis of Jeronimo Martins SGPS SA ADR
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Jeronimo Martins SGPS SA ADR can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Jeronimo Martins SGPS SA ADR, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Jeronimo Martins SGPS SA ADR 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 Jeronimo Martins SGPS SA ADR can be done for the following purposes –
1. Strategic planning of Jeronimo Martins SGPS SA ADR
2. Improving business portfolio management of Jeronimo Martins SGPS SA ADR
3. Assessing feasibility of the new initiative in United States
4. Making a sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Jeronimo Martins SGPS SA ADR
Strengths of Jeronimo Martins SGPS SA ADR | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Jeronimo Martins SGPS SA ADR are -
Learning organization
- Jeronimo Martins SGPS SA ADR 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 Jeronimo Martins SGPS SA ADR is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Jeronimo Martins SGPS SA ADR emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Jeronimo Martins SGPS SA ADR is present in almost all the verticals within the industry. This has provided Jeronimo Martins SGPS SA ADR 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.
Training and development
– Jeronimo Martins SGPS SA ADR has one of the best training and development program in 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.
Organizational Resilience of Jeronimo Martins SGPS SA ADR
– The covid-19 pandemic has put organizational resilience at the centre of everthing Jeronimo Martins SGPS SA ADR does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Jeronimo Martins SGPS SA ADR has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive industry. Secondly the value chain collaborators of Jeronimo Martins SGPS SA ADR have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Jeronimo Martins SGPS SA ADR has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Jeronimo Martins SGPS SA ADR 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.
Ability to lead change in
– Jeronimo Martins SGPS SA ADR is one of the leading players in the industry in United States. Over the years it has not only transformed the business landscape in the industry in United States but also across the existing markets. The ability to lead change has enabled Jeronimo Martins SGPS SA ADR in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Jeronimo Martins SGPS SA ADR 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.
Strong track record of project management in the industry
– Jeronimo Martins SGPS SA ADR is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Jeronimo Martins SGPS SA ADR is one of the leading players in the 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.
Digital Transformation in industry
- digital transformation varies from industry to industry. For Jeronimo Martins SGPS SA ADR digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Jeronimo Martins SGPS SA ADR 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.
Analytics focus
– Jeronimo Martins SGPS SA ADR 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 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.
Weaknesses of Jeronimo Martins SGPS SA ADR | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Jeronimo Martins SGPS SA ADR are -
Low market penetration in new markets
– Outside its home market of United States, Jeronimo Martins SGPS SA ADR needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Jeronimo Martins SGPS SA ADR is dominated by functional specialists. It is not different from other players in the industry, but Jeronimo Martins SGPS SA ADR needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Jeronimo Martins SGPS SA ADR to focus more on services in the industry rather than just following the product oriented approach.
Need for greater diversity
– Jeronimo Martins SGPS SA ADR 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.
Compensation and incentives
– The revenue per employee of Jeronimo Martins SGPS SA ADR is just above the 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.
Aligning sales with marketing
– From the outside it seems that Jeronimo Martins SGPS SA ADR needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department at Jeronimo Martins SGPS SA ADR can leverage the sales team experience to cultivate customer relationships as Jeronimo Martins SGPS SA ADR is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Jeronimo Martins SGPS SA ADR 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 industry using digital technology.
High dependence on Jeronimo Martins SGPS SA ADR ‘s star products
– The top 2 products and services of Jeronimo Martins SGPS SA ADR still accounts for major business revenue. This dependence on star products in industry has resulted into insufficient focus on developing new products, even though Jeronimo Martins SGPS SA ADR has relatively successful track record of launching new products.
Skills based hiring in industry
– The stress on hiring functional specialists at Jeronimo Martins SGPS SA ADR 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.
Employees’ less understanding of Jeronimo Martins SGPS SA ADR strategy
– From the outside it seems that the employees of Jeronimo Martins SGPS SA ADR 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 bargaining power of channel partners in industry
– because of the regulatory requirements in United States, Jeronimo Martins SGPS SA ADR 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 industry.
Ability to respond to the competition
– As the decision making is very deliberative at Jeronimo Martins SGPS SA ADR, in the dynamic environment of industry it has struggled to respond to the nimble upstart competition. Jeronimo Martins SGPS SA ADR has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Jeronimo Martins SGPS SA ADR Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Jeronimo Martins SGPS SA ADR are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Jeronimo Martins SGPS SA ADR can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Jeronimo Martins SGPS SA ADR 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Jeronimo Martins SGPS SA ADR 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 Jeronimo Martins SGPS SA ADR to hire the very best people irrespective of their geographical location.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in industry, but it has also influenced the consumer preferences. Jeronimo Martins SGPS SA ADR can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Jeronimo Martins SGPS SA ADR is facing challenges because of the dominance of functional experts in the organization. Jeronimo Martins SGPS SA ADR can utilize new technology in the field of industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Jeronimo Martins SGPS SA ADR can use these opportunities to build new business models that can help the communities that Jeronimo Martins SGPS SA ADR operates in. Secondly it can use opportunities from government spending in sector.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Jeronimo Martins SGPS SA ADR 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. Jeronimo Martins SGPS SA ADR 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.
Better consumer reach
– The expansion of the 5G network will help Jeronimo Martins SGPS SA ADR to increase its market reach. Jeronimo Martins SGPS SA ADR 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.
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. Jeronimo Martins SGPS SA ADR can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Jeronimo Martins SGPS SA ADR 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 industry.
Using analytics as competitive advantage
– Jeronimo Martins SGPS SA ADR has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in sector. This continuous investment in analytics has enabled Jeronimo Martins SGPS SA ADR to build a competitive advantage using analytics. The analytics driven competitive advantage can help Jeronimo Martins SGPS SA ADR to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Jeronimo Martins SGPS SA ADR 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Jeronimo Martins SGPS SA ADR 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 Jeronimo Martins SGPS SA ADR to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Jeronimo Martins SGPS SA ADR External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Jeronimo Martins SGPS SA ADR are -
Increasing wage structure of Jeronimo Martins SGPS SA ADR
– 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 Jeronimo Martins SGPS SA ADR.
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. Jeronimo Martins SGPS SA ADR 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.
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 Jeronimo Martins SGPS SA ADR in the sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Jeronimo Martins SGPS SA ADR has witnessed rapid integration of technology during Covid-19 in the industry. As one of the leading players in the industry, Jeronimo Martins SGPS SA ADR needs to keep up with the evolution of technology in the 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Jeronimo Martins SGPS SA ADR 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 Jeronimo Martins SGPS SA ADR prominent markets.
Easy access to finance
– Easy access to finance in industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Jeronimo Martins SGPS SA ADR can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Consumer confidence and its impact on Jeronimo Martins SGPS SA ADR 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 industry and other sectors.
Environmental challenges
– Jeronimo Martins SGPS SA ADR 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. Jeronimo Martins SGPS SA ADR can take advantage of this fund but it will also bring new competitors in the industry.
Shortening product life cycle
– it is one of the major threat that Jeronimo Martins SGPS SA ADR is facing in 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 Jeronimo Martins SGPS SA ADR.
Regulatory challenges
– Jeronimo Martins SGPS SA ADR 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 industry regulations.
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.
Weighted SWOT Analysis of Jeronimo Martins SGPS SA ADR Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Jeronimo Martins SGPS SA ADR 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 Jeronimo Martins SGPS SA ADR 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 Jeronimo Martins SGPS SA ADR 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 Jeronimo Martins SGPS SA ADR 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 Jeronimo Martins SGPS SA ADR needs to make to build a sustainable competitive advantage.