Baywa Vink AG (BYWGnx) SWOT Analysis / TOWS Matrix / MBA Resources
Crops
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Baywa Vink AG (Germany)
Based on various researches at Oak Spring University , Baywa Vink AG is operating in a macro-environment that has been destablized by – increasing commodity prices, wage bills are increasing, there is increasing trade war between United States & China, there is backlash against globalization, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%,
central banks are concerned over increasing inflation, geopolitical disruptions, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Baywa Vink AG can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Baywa Vink AG, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Baywa Vink AG 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 Baywa Vink AG can be done for the following purposes –
1. Strategic planning of Baywa Vink AG
2. Improving business portfolio management of Baywa Vink AG
3. Assessing feasibility of the new initiative in Germany
4. Making a Crops sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Baywa Vink AG
Strengths of Baywa Vink AG | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Baywa Vink AG are -
Superior customer experience
– The customer experience strategy of Baywa Vink AG in Crops industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Baywa Vink AG 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 Baywa Vink AG have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Baywa Vink AG has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Baywa Vink AG 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.
High brand equity
– Baywa Vink AG has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Baywa Vink AG to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Baywa Vink AG 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.
Low bargaining power of suppliers
– Suppliers of Baywa Vink AG in the Consumer/Non-Cyclical sector have low bargaining power. Baywa Vink AG has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Baywa Vink AG to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Baywa Vink AG 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 Baywa Vink AG digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Baywa Vink AG 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.
Cross disciplinary teams
– Horizontal connected teams at the Baywa Vink AG 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.
Ability to recruit top talent
– Baywa Vink AG is one of the leading players in the Crops industry in Germany. It is in a position to attract the best talent available in Germany. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Crops
– Baywa Vink AG is one of the leading players in the Crops industry in Germany. Over the years it has not only transformed the business landscape in the Crops industry in Germany but also across the existing markets. The ability to lead change has enabled Baywa Vink AG in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Baywa Vink AG
– The covid-19 pandemic has put organizational resilience at the centre of everthing Baywa Vink AG does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses of Baywa Vink AG | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Baywa Vink AG are -
Employees’ less understanding of Baywa Vink AG strategy
– From the outside it seems that the employees of Baywa Vink AG 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.
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 Baywa Vink AG supply chain. Even after few cautionary changes, Baywa Vink AG is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Baywa Vink AG vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Baywa Vink AG is one of the leading players in the Crops industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Crops industry in last five years.
High dependence on Baywa Vink AG ‘s star products
– The top 2 products and services of Baywa Vink AG 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 Baywa Vink AG has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Baywa Vink AG is dominated by functional specialists. It is not different from other players in the Crops industry, but Baywa Vink AG needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Baywa Vink AG to focus more on services in the Crops industry rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Baywa Vink AG 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.
Low market penetration in new markets
– Outside its home market of Germany, Baywa Vink AG needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee of Baywa Vink AG 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.
Aligning sales with marketing
– From the outside it seems that Baywa Vink AG 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 Baywa Vink AG can leverage the sales team experience to cultivate customer relationships as Baywa Vink AG is planning to shift buying processes online.
High bargaining power of channel partners in Crops industry
– because of the regulatory requirements in Germany, Baywa Vink AG 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 Crops industry.
No frontier risks strategy
– From the 10K / annual statement of Baywa Vink AG, it seems that company is thinking out the frontier risks that can impact Crops 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.
Baywa Vink AG Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Baywa Vink AG are -
Leveraging digital technologies
– Baywa Vink AG 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.
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. Baywa Vink AG can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Baywa Vink AG 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 Baywa Vink AG 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Baywa Vink AG is facing challenges because of the dominance of functional experts in the organization. Baywa Vink AG can utilize new technology in the field of Crops industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, 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. Baywa Vink AG can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Baywa Vink AG 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. Baywa Vink AG 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Baywa Vink AG can use these opportunities to build new business models that can help the communities that Baywa Vink AG operates in. Secondly it can use opportunities from government spending in Crops sector.
Creating value in data economy
– The success of analytics program of Baywa Vink AG has opened avenues for new revenue streams for the organization in Crops industry. This can help Baywa Vink AG to build a more holistic ecosystem for Baywa Vink AG products in the Crops industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Baywa Vink AG 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.
Buying journey improvements
– Baywa Vink AG can improve the customer journey of consumers in the Crops 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
– Baywa Vink AG 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 Baywa Vink AG to build a competitive advantage using analytics. The analytics driven competitive advantage can help Baywa Vink AG to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Use of Bitcoin and other crypto currencies for transactions in Crops industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Baywa Vink AG in the Crops industry. Now Baywa Vink AG can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Baywa Vink AG External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Baywa Vink AG are -
Environmental challenges
– Baywa Vink AG 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. Baywa Vink AG can take advantage of this fund but it will also bring new competitors in the Crops industry.
Shortening product life cycle
– it is one of the major threat that Baywa Vink AG is facing in Crops 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. Baywa Vink AG needs to understand the core reasons impacting the Crops industry. This will help it in building a better workplace.
Consumer confidence and its impact on Baywa Vink AG 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.
Stagnating economy with rate increase
– Baywa Vink AG 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.
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. Baywa Vink AG 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Baywa Vink AG 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 Baywa Vink AG prominent markets.
Increasing wage structure of Baywa Vink AG
– 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 Baywa Vink AG.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Baywa Vink AG may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Crops sector.
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. Baywa Vink AG can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Crops industry are lowering. It can presents Baywa Vink AG with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Crops 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.
Weighted SWOT Analysis of Baywa Vink AG Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Baywa Vink AG 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 Baywa Vink AG 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 Baywa Vink AG 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 Baywa Vink AG 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 Baywa Vink AG needs to make to build a sustainable competitive advantage.