PGDM (Agriculture)

PGDM-722 2
SWOT Analysis NH Rao

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Learning Objectives
External and internal environment of a firm opportunities threats strengths weaknesses analysis

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SWOT Analysis: assess current situation

What is changing in the industry, markets, competitors, the economy, and other areas that may affect the company ? Where are the opportunities and what could be the major threats to achieving the companys goals ? How has the company been performing ? What strengths, resources, weaknesses, and competitive advantages does the company have, or lack? SWOT analysis: generates information that allows matching a firms strategies to attain its mission with capacities and environment in which it operates Strategic planning tool that can be applied at industry, business, department, function, group or individual level good starting point for more detailed analysis

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SWOT Analysis
A typical SWOT analysis is done on a four-cell grid
Opportunities: trends, forces, events, that need to be capitalized on

Strengths: capabilities that need to be leveraged

Weaknesses: lower performance and need to be addressed

Threats: events beyond control that need to be mitigated

objective is to assess changes in the competitive arena, and develop strategies to match strengths with opportunities, convert weaknesses to strengths, and threats to opportunities

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SWOT assessing the situation - external and internal analysis

External analysis: Opportunities and Threats economy
customers competitors suppliers farmers policies pricing, market channels, FDI, IPR technology macroeconomic policies regulatory systems potential partners Strategy
Adapted from HBS

Mission

Internal analysis: Strengths Weaknesses current performance

employee skills organizational culture brand power product portfolio R & D for new products

cost structure Technology

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External Analysis
Macro environment

trends: population, economy, urbanization, climate, work and life styles, internet, health

Policies: markets, subsidies, FDI, environment, IPR

Customers: price sensitivity, reach, current use, needs, loyalty, preferred relationships determinants: age, gender, income, location, behaviour (market segmentation, market research)

m a c r o

Micro environment

market trends: products/services addressing similar needs, competitors, suppliers, entry barriers, fragmentation
Technology: new technologies both threat and opportunity Companies/managers need to constantly sense the external environment for threats and opportunities that could affect them

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Internal Analysis
identifying core competencies: expertise/skills that directly produce superior performance what a company is better than others at and that which customers value needs benchmarking (rating activities in relation to competitors) financial strength: trends in current performance (RoI/RoA); capacity to implement new strategy (cash flows, access to capital, other capital needs, RoI expected from new projects) Management and Organizational culture: change readiness of company Companies need to rely on collective judgments for more accurate assessments of strengths/weaknesses and identify top 3 strengths and weaknesses

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Case : Excel Crop Care

incorporated in 1964 products/mix: crop protection chemicals insecticides, fungicides, weedicides, fumigants, rodenticides (includes bio-products, soil enrichers, growth promoters) (60% from insecticides; endosulphan 35% of total revenue; exports about 25% of revenue) presence across the agri-value chain; farmer advise programme 3 manufacturing plants in India; 3 abroad

1200 employees
turnover (2010-11) 700 crores (1/3 exports) ; PAT 44 crores ; strong distribution network 40,000 dealers (reaches 80% of agrimarket) risks: product concentration, regulation, weather competitors: Tata (EID Parry), Bayer, BASF, Clariant Chemicals domestic demand likely to moderate, exports main driver

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Company Name Bayer Cropscien Rallis India Meghmani Organi PI Industries Excel Crop Care Dhanuka Agritec Insecticides In Monsanto India

Net Sales (Rs. cr) 2,139.27 1,058.18 844.64 790.12 717.85 491.00 450.10 415.37

Net profit (Rs cr) 131.54 126.21 47.18 64.12 43.69 51.11 41.26 53.82

Sabero Organics
Excel Bharat Rasayan

412.72
272.76 101.42

10.63
13.42 5.81

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SWOT - Excel Crop Care

Strengths
leading player over the long term farmers have positive perceptions integrated player wide reach - strong distribution network global presence growing exports (25%) strong financials - PAT diverse product mix branding (for diverse products) high market share for main product strong QMS and EMS emphasis on CSR management implementing change high investments in R&D good internal controls (SOPs)

Opportunities
dependence on agriculture which gets government support growing food processing and retail sectors demand likely to increase (income growth for farmers and consumers) changing product needs (increasing share of weedicides; declining share of insecticides) rising new sectors (floriculture; post harvest) demand for new products new technologies new markets (globally)

Weaknesses
product concentration large inventory (because of seasonal demand) large dependence on single product (endosulphan) high capacity & low utilization low margins because of intense competition in generics spread of resources

threats
dependence on agricultural growth (slow growth in demand globally) large multinational competitors cheap spurious products environmental regulations (compliance adds to costs; bans) misinformation on impacts changing consumer preferences organic farming substitutes IPR: process to product patents weather

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Thank You

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