Based on various researches at Oak Spring University , Gifore Agricultural Machinery Chain is operating in a macro-environment that has been destablized by – increasing energy prices, talent flight as more people leaving formal jobs, there is backlash against globalization, central banks are concerned over increasing inflation, technology disruption, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models,
increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Gifore Agricultural Machinery Chain
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Gifore Agricultural Machinery Chain can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Gifore Agricultural Machinery Chain, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Gifore Agricultural Machinery Chain 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 Gifore Agricultural Machinery Chain can be done for the following purposes –
1. Strategic planning of Gifore Agricultural Machinery Chain
2. Improving business portfolio management of Gifore Agricultural Machinery Chain
3. Assessing feasibility of the new initiative in China
4. Making a Constr. & Agric. Machinery sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Gifore Agricultural Machinery Chain
Strengths of Gifore Agricultural Machinery Chain | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Gifore Agricultural Machinery Chain are -
Innovation driven organization
– Gifore Agricultural Machinery Chain is one of the most innovative firm in Constr. & Agric. Machinery sector.
Superior customer experience
– The customer experience strategy of Gifore Agricultural Machinery Chain in Constr. & Agric. Machinery industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Gifore Agricultural Machinery Chain is present in almost all the verticals within the Constr. & Agric. Machinery industry. This has provided Gifore Agricultural Machinery Chain 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
– Gifore Agricultural Machinery Chain has one of the best training and development program in Capital Goods 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
– Gifore Agricultural Machinery Chain has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Gifore Agricultural Machinery Chain to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Constr. & Agric. Machinery industry
– Gifore Agricultural Machinery Chain has clearly differentiated products in the market place. This has enabled Gifore Agricultural Machinery Chain to fetch slight price premium compare to the competitors in the Constr. & Agric. Machinery industry. The sustainable margins have also helped Gifore Agricultural Machinery Chain to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy of Gifore Agricultural Machinery Chain comprises – understanding the underlying the factors in the Constr. & Agric. Machinery 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.
Learning organization
- Gifore Agricultural Machinery Chain 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 Gifore Agricultural Machinery Chain is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Gifore Agricultural Machinery Chain emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Gifore Agricultural Machinery Chain has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Constr. & Agric. Machinery industry. Secondly the value chain collaborators of Gifore Agricultural Machinery Chain have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Constr. & Agric. Machinery industry
- digital transformation varies from industry to industry. For Gifore Agricultural Machinery Chain digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Gifore Agricultural Machinery Chain 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.
Ability to recruit top talent
– Gifore Agricultural Machinery Chain is one of the leading players in the Constr. & Agric. Machinery industry in China. It is in a position to attract the best talent available in China. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Gifore Agricultural Machinery Chain 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.
Weaknesses of Gifore Agricultural Machinery Chain | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Gifore Agricultural Machinery Chain are -
Ability to respond to the competition
– As the decision making is very deliberative at Gifore Agricultural Machinery Chain, in the dynamic environment of Constr. & Agric. Machinery industry it has struggled to respond to the nimble upstart competition. Gifore Agricultural Machinery Chain has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of China, Gifore Agricultural Machinery Chain needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Gifore Agricultural Machinery Chain has some of the most successful models in the Constr. & Agric. Machinery industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Gifore Agricultural Machinery Chain should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Gifore Agricultural Machinery Chain products
– To increase the profitability and margins on the products, Gifore Agricultural Machinery Chain needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners in Constr. & Agric. Machinery industry
– because of the regulatory requirements in China, Gifore Agricultural Machinery Chain 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 Constr. & Agric. Machinery industry.
No frontier risks strategy
– From the 10K / annual statement of Gifore Agricultural Machinery Chain, it seems that company is thinking out the frontier risks that can impact Constr. & Agric. Machinery 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.
Skills based hiring in Constr. & Agric. Machinery industry
– The stress on hiring functional specialists at Gifore Agricultural Machinery Chain 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.
Workers concerns about automation
– As automation is fast increasing in the Constr. & Agric. Machinery industry, Gifore Agricultural Machinery Chain 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.
Slow to strategic competitive environment developments
– As Gifore Agricultural Machinery Chain is one of the leading players in the Constr. & Agric. Machinery industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Constr. & Agric. Machinery industry in last five years.
Employees’ less understanding of Gifore Agricultural Machinery Chain strategy
– From the outside it seems that the employees of Gifore Agricultural Machinery Chain 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.
Interest costs
– Compare to the competition, Gifore Agricultural Machinery Chain 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.
Gifore Agricultural Machinery Chain Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Gifore Agricultural Machinery Chain are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Gifore Agricultural Machinery Chain 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 Gifore Agricultural Machinery Chain to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Gifore Agricultural Machinery Chain can use these opportunities to build new business models that can help the communities that Gifore Agricultural Machinery Chain operates in. Secondly it can use opportunities from government spending in Constr. & Agric. Machinery sector.
Buying journey improvements
– Gifore Agricultural Machinery Chain can improve the customer journey of consumers in the Constr. & Agric. Machinery 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.
Using analytics as competitive advantage
– Gifore Agricultural Machinery Chain has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Constr. & Agric. Machinery sector. This continuous investment in analytics has enabled Gifore Agricultural Machinery Chain to build a competitive advantage using analytics. The analytics driven competitive advantage can help Gifore Agricultural Machinery Chain to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Gifore Agricultural Machinery Chain can develop new processes and procedures in Constr. & Agric. Machinery 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.
Leveraging digital technologies
– Gifore Agricultural Machinery Chain 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Gifore Agricultural Machinery Chain is facing challenges because of the dominance of functional experts in the organization. Gifore Agricultural Machinery Chain can utilize new technology in the field of Constr. & Agric. Machinery industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Constr. & Agric. Machinery industry, but it has also influenced the consumer preferences. Gifore Agricultural Machinery Chain can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Gifore Agricultural Machinery Chain to increase its market reach. Gifore Agricultural Machinery Chain 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.
Use of Bitcoin and other crypto currencies for transactions in Constr. & Agric. Machinery industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Gifore Agricultural Machinery Chain in the Constr. & Agric. Machinery industry. Now Gifore Agricultural Machinery Chain can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Gifore Agricultural Machinery Chain can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Gifore Agricultural Machinery Chain in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Constr. & Agric. Machinery industry, and it will provide faster access to the consumers.
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. Gifore Agricultural Machinery Chain can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Gifore Agricultural Machinery Chain External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Gifore Agricultural Machinery Chain 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 Gifore Agricultural Machinery Chain business can come under increasing regulations regarding data privacy, data security, etc.
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 Gifore Agricultural Machinery Chain in the Constr. & Agric. Machinery sector and impact the bottomline of the organization.
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. Gifore Agricultural Machinery Chain needs to understand the core reasons impacting the Constr. & Agric. Machinery industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Gifore Agricultural Machinery Chain 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 Gifore Agricultural Machinery Chain prominent markets.
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.
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. Gifore Agricultural Machinery Chain 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.
Shortening product life cycle
– it is one of the major threat that Gifore Agricultural Machinery Chain is facing in Constr. & Agric. Machinery sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Gifore Agricultural Machinery Chain 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 Constr. & Agric. Machinery industry.
Regulatory challenges
– Gifore Agricultural Machinery Chain 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 Constr. & Agric. Machinery industry regulations.
Consumer confidence and its impact on Gifore Agricultural Machinery Chain 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 Constr. & Agric. Machinery industry and other sectors.
Increasing wage structure of Gifore Agricultural Machinery Chain
– 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 Gifore Agricultural Machinery Chain.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Constr. & Agric. Machinery industry are lowering. It can presents Gifore Agricultural Machinery Chain with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Constr. & Agric. Machinery sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Gifore Agricultural Machinery Chain in Constr. & Agric. Machinery industry. The Constr. & Agric. Machinery 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.
Weighted SWOT Analysis of Gifore Agricultural Machinery Chain Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Gifore Agricultural Machinery Chain 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 Gifore Agricultural Machinery Chain 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 Gifore Agricultural Machinery Chain 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 Gifore Agricultural Machinery Chain 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 Gifore Agricultural Machinery Chain needs to make to build a sustainable competitive advantage.