SunOpta Inc. (STKL) SWOT Analysis / TOWS Matrix / MBA Resources
Crops
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for SunOpta Inc. (United States)
Based on various researches at Oak Spring University , SunOpta Inc. is operating in a macro-environment that has been destablized by – increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption,
increasing energy prices, 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 SunOpta Inc. can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the SunOpta Inc., and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which SunOpta Inc. 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 SunOpta Inc. can be done for the following purposes –
1. Strategic planning of SunOpta Inc.
2. Improving business portfolio management of SunOpta Inc.
3. Assessing feasibility of the new initiative in United States
4. Making a Crops sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of SunOpta Inc.
Strengths of SunOpta Inc. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of SunOpta Inc. are -
High switching costs
– The high switching costs that SunOpta Inc. 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.
Digital Transformation in Crops industry
- digital transformation varies from industry to industry. For SunOpta Inc. digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. SunOpta Inc. 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
– SunOpta Inc. 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 Crops 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.
Sustainable margins compare to other players in Crops industry
– SunOpta Inc. has clearly differentiated products in the market place. This has enabled SunOpta Inc. to fetch slight price premium compare to the competitors in the Crops industry. The sustainable margins have also helped SunOpta Inc. to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– SunOpta Inc. has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Crops industry. Secondly the value chain collaborators of SunOpta Inc. have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy of SunOpta Inc. comprises – understanding the underlying the factors in the Crops 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.
Strong track record of project management in the Crops industry
– SunOpta Inc. is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– SunOpta Inc. 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.
Organizational Resilience of SunOpta Inc.
– The covid-19 pandemic has put organizational resilience at the centre of everthing SunOpta Inc. does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of SunOpta Inc. in Crops industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– SunOpta Inc. is one of the most innovative firm in Crops sector.
Successful track record of launching new products
– SunOpta Inc. has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. SunOpta Inc. 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.
Weaknesses of SunOpta Inc. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of SunOpta Inc. are -
Slow decision making process
– As mentioned earlier in the report, SunOpta Inc. has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Crops industry over the last five years. SunOpta Inc. 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.
Capital Spending Reduction
– Even during the low interest decade, SunOpta Inc. 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 Crops industry using digital technology.
High operating costs
– Compare to the competitors, SunOpta Inc. has high operating costs in the Crops industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract SunOpta Inc. lucrative customers.
Skills based hiring in Crops industry
– The stress on hiring functional specialists at SunOpta Inc. 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.
Low market penetration in new markets
– Outside its home market of United States, SunOpta Inc. needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the Crops industry, SunOpta Inc. 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.
Aligning sales with marketing
– From the outside it seems that SunOpta Inc. needs to have more collaboration between its sales team and marketing team. Sales professionals in the Crops industry have deep experience in developing customer relationships. Marketing department at SunOpta Inc. can leverage the sales team experience to cultivate customer relationships as SunOpta Inc. is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative at SunOpta Inc., in the dynamic environment of Crops industry it has struggled to respond to the nimble upstart competition. SunOpta Inc. has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on SunOpta Inc. ‘s star products
– The top 2 products and services of SunOpta Inc. still accounts for major business revenue. This dependence on star products in Crops industry has resulted into insufficient focus on developing new products, even though SunOpta Inc. has relatively successful track record of launching new products.
Products dominated business model
– Even though SunOpta Inc. has some of the most successful models in the Crops industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. SunOpta Inc. should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee of SunOpta Inc. is just above the Crops 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.
SunOpta Inc. Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of SunOpta Inc. are -
Developing new processes and practices
– SunOpta Inc. can develop new processes and procedures in Crops 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.
Using analytics as competitive advantage
– SunOpta Inc. has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Crops sector. This continuous investment in analytics has enabled SunOpta Inc. to build a competitive advantage using analytics. The analytics driven competitive advantage can help SunOpta Inc. to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects SunOpta Inc. can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– SunOpta Inc. can use the latest technology developments to improve its manufacturing and designing process in Crops 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Crops industry, but it has also influenced the consumer preferences. SunOpta Inc. can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– SunOpta Inc. 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. SunOpta Inc. can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– SunOpta Inc. 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 SunOpta Inc. 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 Crops industry.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Crops industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. SunOpta Inc. 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. SunOpta Inc. 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for SunOpta Inc. in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Crops industry, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of SunOpta Inc. has opened avenues for new revenue streams for the organization in Crops industry. This can help SunOpta Inc. to build a more holistic ecosystem for SunOpta Inc. products in the Crops industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, SunOpta Inc. 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.
Threats SunOpta Inc. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of SunOpta Inc. are -
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 SunOpta Inc. business can come under increasing regulations regarding data privacy, data security, 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. SunOpta Inc. needs to understand the core reasons impacting the Crops industry. This will help it in building a better workplace.
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
– SunOpta Inc. has witnessed rapid integration of technology during Covid-19 in the Crops industry. As one of the leading players in the industry, SunOpta Inc. needs to keep up with the evolution of technology in the Crops 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 SunOpta Inc. in Crops industry. The Crops 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.
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. SunOpta Inc. 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.
Consumer confidence and its impact on SunOpta Inc. 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 Crops industry and other sectors.
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.
Easy access to finance
– Easy access to finance in Crops industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. SunOpta Inc. can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 SunOpta Inc..
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 SunOpta Inc. in the Crops sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– SunOpta Inc. 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 Crops industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Crops industry are lowering. It can presents SunOpta Inc. with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Crops sector.
Weighted SWOT Analysis of SunOpta Inc. Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at SunOpta Inc. 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 SunOpta Inc. 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 SunOpta Inc. 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 SunOpta Inc. 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 SunOpta Inc. needs to make to build a sustainable competitive advantage.