SWOT Analysis / TOWS Matrix for Lexaria Bioscience (United States)
Based on various researches at Oak Spring University , Lexaria Bioscience 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, central banks are concerned over increasing inflation, increasing energy prices, increasing transportation and logistics costs, geopolitical disruptions, wage bills are increasing,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Lexaria Bioscience
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Lexaria Bioscience can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Lexaria Bioscience, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Lexaria Bioscience 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 Lexaria Bioscience can be done for the following purposes –
1. Strategic planning of Lexaria Bioscience
2. Improving business portfolio management of Lexaria Bioscience
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 Lexaria Bioscience
Strengths of Lexaria Bioscience | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Lexaria Bioscience are -
Innovation driven organization
– Lexaria Bioscience is one of the most innovative firm in Food Processing sector.
Superior customer experience
– The customer experience strategy of Lexaria Bioscience in Food Processing industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy of Lexaria Bioscience 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.
Effective Research and Development (R&D)
– Lexaria Bioscience has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Lexaria Bioscience 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.
Low bargaining power of suppliers
– Suppliers of Lexaria Bioscience in the Consumer/Non-Cyclical sector have low bargaining power. Lexaria Bioscience has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Lexaria Bioscience to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Food Processing
– Lexaria Bioscience is one of the leading players in the Food Processing industry in United States. Over the years it has not only transformed the business landscape in the Food Processing industry in United States but also across the existing markets. The ability to lead change has enabled Lexaria Bioscience in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Food Processing industry
– Lexaria Bioscience has clearly differentiated products in the market place. This has enabled Lexaria Bioscience to fetch slight price premium compare to the competitors in the Food Processing industry. The sustainable margins have also helped Lexaria Bioscience to invest into research and development (R&D) and innovation.
High brand equity
– Lexaria Bioscience has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Lexaria Bioscience to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Lexaria Bioscience is one of the leading players in the Food Processing 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.
Cross disciplinary teams
– Horizontal connected teams at the Lexaria Bioscience 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.
High switching costs
– The high switching costs that Lexaria Bioscience 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
– Lexaria Bioscience 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.
Weaknesses of Lexaria Bioscience | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Lexaria Bioscience are -
Aligning sales with marketing
– From the outside it seems that Lexaria Bioscience 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 Lexaria Bioscience can leverage the sales team experience to cultivate customer relationships as Lexaria Bioscience is planning to shift buying processes online.
High cash cycle compare to competitors
Lexaria Bioscience has a high cash cycle compare to other players in the Food Processing industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Products dominated business model
– Even though Lexaria Bioscience 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. Lexaria Bioscience should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners in Food Processing industry
– because of the regulatory requirements in United States, Lexaria Bioscience 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 Food Processing industry.
Ability to respond to the competition
– As the decision making is very deliberative at Lexaria Bioscience, in the dynamic environment of Food Processing industry it has struggled to respond to the nimble upstart competition. Lexaria Bioscience has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Lexaria Bioscience 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Lexaria Bioscience is slow explore the new channels of communication. These new channels of communication can help Lexaria Bioscience to provide better information regarding Food Processing products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– From the 10K / annual statement of Lexaria Bioscience, it seems that company is thinking out the frontier risks that can impact Food Processing 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.
Workers concerns about automation
– As automation is fast increasing in the Food Processing industry, Lexaria Bioscience 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.
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 Lexaria Bioscience supply chain. Even after few cautionary changes, Lexaria Bioscience is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Lexaria Bioscience vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Lexaria Bioscience 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.
Lexaria Bioscience Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Lexaria Bioscience are -
Learning at scale
– Online learning technologies has now opened space for Lexaria Bioscience 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Lexaria Bioscience is facing challenges because of the dominance of functional experts in the organization. Lexaria Bioscience 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Lexaria Bioscience 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Lexaria Bioscience 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Lexaria Bioscience can use these opportunities to build new business models that can help the communities that Lexaria Bioscience operates in. Secondly it can use opportunities from government spending in Food Processing sector.
Building a culture of innovation
– managers at Lexaria Bioscience 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.
Using analytics as competitive advantage
– Lexaria Bioscience 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 Lexaria Bioscience to build a competitive advantage using analytics. The analytics driven competitive advantage can help Lexaria Bioscience to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Food Processing industry, but it has also influenced the consumer preferences. Lexaria Bioscience can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Lexaria Bioscience can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Lexaria Bioscience has opened avenues for new revenue streams for the organization in Food Processing industry. This can help Lexaria Bioscience to build a more holistic ecosystem for Lexaria Bioscience products in the Food Processing industry by providing – data insight services, data privacy related products, data based consulting services, etc.
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 Lexaria Bioscience in the Food Processing industry. Now Lexaria Bioscience can target international markets with far fewer capital restrictions requirements than the existing system.
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 Lexaria Bioscience 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.
Developing new processes and practices
– Lexaria Bioscience 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.
Threats Lexaria Bioscience External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Lexaria Bioscience are -
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Food Processing industry are lowering. It can presents Lexaria Bioscience with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Food Processing sector.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Technology acceleration in Forth Industrial Revolution
– Lexaria Bioscience has witnessed rapid integration of technology during Covid-19 in the Food Processing industry. As one of the leading players in the industry, Lexaria Bioscience 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.
Increasing wage structure of Lexaria Bioscience
– 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 Lexaria Bioscience.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Lexaria Bioscience 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Lexaria Bioscience 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 Lexaria Bioscience prominent markets.
Stagnating economy with rate increase
– Lexaria Bioscience 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.
Regulatory challenges
– Lexaria Bioscience 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.
Consumer confidence and its impact on Lexaria Bioscience 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.
Shortening product life cycle
– it is one of the major threat that Lexaria Bioscience is facing in Food Processing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Lexaria Bioscience needs to understand the core reasons impacting the Food Processing industry. This will help it in building a better workplace.
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 Lexaria Bioscience business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Lexaria Bioscience Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Lexaria Bioscience 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 Lexaria Bioscience 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 Lexaria Bioscience 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 Lexaria Bioscience 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 Lexaria Bioscience needs to make to build a sustainable competitive advantage.