SWOT Analysis / TOWS Matrix for Daodaoquan Grain Oil (China)
Based on various researches at Oak Spring University , Daodaoquan Grain Oil is operating in a macro-environment that has been destablized by – technology disruption, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Daodaoquan Grain Oil
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Daodaoquan Grain Oil can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Daodaoquan Grain Oil, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Daodaoquan Grain Oil 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 Daodaoquan Grain Oil can be done for the following purposes –
1. Strategic planning of Daodaoquan Grain Oil
2. Improving business portfolio management of Daodaoquan Grain Oil
3. Assessing feasibility of the new initiative in China
4. Making a Food Processing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Daodaoquan Grain Oil
Strengths of Daodaoquan Grain Oil | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Daodaoquan Grain Oil are -
Training and development
– Daodaoquan Grain Oil 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.
High brand equity
– Daodaoquan Grain Oil has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Daodaoquan Grain Oil to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Daodaoquan Grain Oil 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 Food Processing industry
– Daodaoquan Grain Oil is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Daodaoquan Grain Oil is one of the most innovative firm in Food Processing sector.
Cross disciplinary teams
– Horizontal connected teams at the Daodaoquan Grain Oil 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 Food Processing industry
– Daodaoquan Grain Oil has clearly differentiated products in the market place. This has enabled Daodaoquan Grain Oil to fetch slight price premium compare to the competitors in the Food Processing industry. The sustainable margins have also helped Daodaoquan Grain Oil to invest into research and development (R&D) and innovation.
Organizational Resilience of Daodaoquan Grain Oil
– The covid-19 pandemic has put organizational resilience at the centre of everthing Daodaoquan Grain Oil does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Food Processing industry
- digital transformation varies from industry to industry. For Daodaoquan Grain Oil digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Daodaoquan Grain Oil 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.
Diverse revenue streams
– Daodaoquan Grain Oil is present in almost all the verticals within the Food Processing industry. This has provided Daodaoquan Grain Oil 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.
Highly skilled collaborators
– Daodaoquan Grain Oil has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Food Processing industry. Secondly the value chain collaborators of Daodaoquan Grain Oil have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Daodaoquan Grain Oil has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Daodaoquan Grain Oil 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.
Weaknesses of Daodaoquan Grain Oil | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Daodaoquan Grain Oil are -
Interest costs
– Compare to the competition, Daodaoquan Grain Oil 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.
Slow to strategic competitive environment developments
– As Daodaoquan Grain Oil is one of the leading players in the Food Processing industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Food Processing industry in last five years.
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 Daodaoquan Grain Oil supply chain. Even after few cautionary changes, Daodaoquan Grain Oil is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Daodaoquan Grain Oil vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Daodaoquan Grain Oil 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.
Lack of clear differentiation of Daodaoquan Grain Oil products
– To increase the profitability and margins on the products, Daodaoquan Grain Oil needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Daodaoquan Grain Oil 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.
Products dominated business model
– Even though Daodaoquan Grain Oil 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. Daodaoquan Grain Oil should strive to include more intangible value offerings along with its core products and services.
High dependence on Daodaoquan Grain Oil ‘s star products
– The top 2 products and services of Daodaoquan Grain Oil 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 Daodaoquan Grain Oil has relatively successful track record of launching new products.
No frontier risks strategy
– From the 10K / annual statement of Daodaoquan Grain Oil, 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.
Employees’ less understanding of Daodaoquan Grain Oil strategy
– From the outside it seems that the employees of Daodaoquan Grain Oil 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.
Need for greater diversity
– Daodaoquan Grain Oil 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.
Daodaoquan Grain Oil Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Daodaoquan Grain Oil are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Daodaoquan Grain Oil is facing challenges because of the dominance of functional experts in the organization. Daodaoquan Grain Oil 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.
Loyalty marketing
– Daodaoquan Grain Oil 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.
Developing new processes and practices
– Daodaoquan Grain Oil 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Daodaoquan Grain Oil 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 Daodaoquan Grain Oil 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 Food Processing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Daodaoquan Grain Oil 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. Daodaoquan Grain Oil 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.
Manufacturing automation
– Daodaoquan Grain Oil 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Daodaoquan Grain Oil can use these opportunities to build new business models that can help the communities that Daodaoquan Grain Oil operates in. Secondly it can use opportunities from government spending in Food Processing sector.
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. Daodaoquan Grain Oil can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Daodaoquan Grain Oil in the Food Processing industry. Now Daodaoquan Grain Oil can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Daodaoquan Grain Oil has opened avenues for new revenue streams for the organization in Food Processing industry. This can help Daodaoquan Grain Oil to build a more holistic ecosystem for Daodaoquan Grain Oil products in the Food Processing industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Daodaoquan Grain Oil 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.
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 Daodaoquan Grain Oil 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.
Leveraging digital technologies
– Daodaoquan Grain Oil 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.
Threats Daodaoquan Grain Oil External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Daodaoquan Grain Oil are -
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. Daodaoquan Grain Oil 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.
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. Daodaoquan Grain Oil needs to understand the core reasons impacting the Food Processing industry. This will help it in building a better workplace.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Daodaoquan Grain Oil 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.
Shortening product life cycle
– it is one of the major threat that Daodaoquan Grain Oil is facing in Food Processing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Daodaoquan Grain Oil 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 Daodaoquan Grain Oil business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Daodaoquan Grain Oil
– 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 Daodaoquan Grain Oil.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Daodaoquan Grain Oil 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 Daodaoquan Grain Oil prominent markets.
Environmental challenges
– Daodaoquan Grain Oil 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. Daodaoquan Grain Oil can take advantage of this fund but it will also bring new competitors in the Food Processing industry.
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. Daodaoquan Grain Oil can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Daodaoquan Grain Oil 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.
Technology acceleration in Forth Industrial Revolution
– Daodaoquan Grain Oil has witnessed rapid integration of technology during Covid-19 in the Food Processing industry. As one of the leading players in the industry, Daodaoquan Grain Oil 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.
Weighted SWOT Analysis of Daodaoquan Grain Oil Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Daodaoquan Grain Oil 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 Daodaoquan Grain Oil 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 Daodaoquan Grain Oil 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 Daodaoquan Grain Oil 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 Daodaoquan Grain Oil needs to make to build a sustainable competitive advantage.