SWOT Analysis / TOWS Matrix for Goodfood Market (Canada)
Based on various researches at Oak Spring University , Goodfood Market is operating in a macro-environment that has been destablized by – wage bills are increasing, technology disruption, geopolitical disruptions, there is backlash against globalization, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies,
talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Goodfood Market can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Goodfood Market, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Goodfood Market 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 Goodfood Market can be done for the following purposes –
1. Strategic planning of Goodfood Market
2. Improving business portfolio management of Goodfood Market
3. Assessing feasibility of the new initiative in Canada
4. Making a Restaurants sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Goodfood Market
Strengths of Goodfood Market | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Goodfood Market are -
Analytics focus
– Goodfood Market 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 Restaurants industry. The technology infrastructure of Canada 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.
High switching costs
– The high switching costs that Goodfood Market 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 Restaurants industry
– Goodfood Market is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Goodfood Market in Restaurants industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy of Goodfood Market comprises – understanding the underlying the factors in the Restaurants 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.
Successful track record of launching new products
– Goodfood Market has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Goodfood Market 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.
Diverse revenue streams
– Goodfood Market is present in almost all the verticals within the Restaurants industry. This has provided Goodfood Market 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.
Effective Research and Development (R&D)
– Goodfood Market has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Goodfood Market staying ahead in the Restaurants 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 Goodfood Market in the Services sector have low bargaining power. Goodfood Market has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Goodfood Market to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Goodfood Market has one of the best training and development program in Services 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.
Cross disciplinary teams
– Horizontal connected teams at the Goodfood Market 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.
Sustainable margins compare to other players in Restaurants industry
– Goodfood Market has clearly differentiated products in the market place. This has enabled Goodfood Market to fetch slight price premium compare to the competitors in the Restaurants industry. The sustainable margins have also helped Goodfood Market to invest into research and development (R&D) and innovation.
Weaknesses of Goodfood Market | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Goodfood Market are -
Products dominated business model
– Even though Goodfood Market has some of the most successful models in the Restaurants industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Goodfood Market should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Goodfood Market 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.
Increasing silos among functional specialists
– The organizational structure of Goodfood Market is dominated by functional specialists. It is not different from other players in the Restaurants industry, but Goodfood Market needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Goodfood Market to focus more on services in the Restaurants industry rather than just following the product oriented approach.
High bargaining power of channel partners in Restaurants industry
– because of the regulatory requirements in Canada, Goodfood Market 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 Restaurants industry.
Skills based hiring in Restaurants industry
– The stress on hiring functional specialists at Goodfood Market 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.
Capital Spending Reduction
– Even during the low interest decade, Goodfood Market 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 Restaurants industry using digital technology.
Low market penetration in new markets
– Outside its home market of Canada, Goodfood Market needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative at Goodfood Market, in the dynamic environment of Restaurants industry it has struggled to respond to the nimble upstart competition. Goodfood Market has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Goodfood Market is slow explore the new channels of communication. These new channels of communication can help Goodfood Market to provide better information regarding Restaurants products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, Goodfood Market has high operating costs in the Restaurants industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Goodfood Market lucrative customers.
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 Goodfood Market supply chain. Even after few cautionary changes, Goodfood Market is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Goodfood Market vulnerable to further global disruptions in South East Asia.
Goodfood Market Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Goodfood Market are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Goodfood Market is facing challenges because of the dominance of functional experts in the organization. Goodfood Market can utilize new technology in the field of Restaurants industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Buying journey improvements
– Goodfood Market can improve the customer journey of consumers in the Restaurants industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Goodfood Market 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.
Better consumer reach
– The expansion of the 5G network will help Goodfood Market to increase its market reach. Goodfood Market 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.
Learning at scale
– Online learning technologies has now opened space for Goodfood Market 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Goodfood Market can use these opportunities to build new business models that can help the communities that Goodfood Market operates in. Secondly it can use opportunities from government spending in Restaurants sector.
Using analytics as competitive advantage
– Goodfood Market has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Restaurants sector. This continuous investment in analytics has enabled Goodfood Market to build a competitive advantage using analytics. The analytics driven competitive advantage can help Goodfood Market to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Goodfood Market can use the latest technology developments to improve its manufacturing and designing process in Restaurants 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.
Building a culture of innovation
– managers at Goodfood Market 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 Restaurants industry.
Developing new processes and practices
– Goodfood Market can develop new processes and procedures in Restaurants 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, Goodfood Market 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 Goodfood Market to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Restaurants industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Goodfood Market 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. Goodfood Market 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.
Loyalty marketing
– Goodfood Market 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.
Threats Goodfood Market External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Goodfood Market are -
Increasing wage structure of Goodfood Market
– 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 Goodfood Market.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Goodfood Market 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 Goodfood Market prominent markets.
Regulatory challenges
– Goodfood Market 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 Restaurants industry regulations.
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. Goodfood Market needs to understand the core reasons impacting the Restaurants industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Goodfood Market 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.
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 Goodfood Market in the Restaurants sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Goodfood Market has witnessed rapid integration of technology during Covid-19 in the Restaurants industry. As one of the leading players in the industry, Goodfood Market needs to keep up with the evolution of technology in the Restaurants 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.
Stagnating economy with rate increase
– Goodfood Market 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 Restaurants industry.
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 Goodfood Market business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Goodfood Market 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. Goodfood Market can take advantage of this fund but it will also bring new competitors in the Restaurants industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Restaurants industry are lowering. It can presents Goodfood Market with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Restaurants sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Goodfood Market in Restaurants industry. The Restaurants 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 Goodfood Market.
Weighted SWOT Analysis of Goodfood Market Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Goodfood Market 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 Goodfood Market 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 Goodfood Market 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 Goodfood Market 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 Goodfood Market needs to make to build a sustainable competitive advantage.