Need help pulling together a SWOT Analysis? Here’s a sample SWOT Analysis for a fictional company, Fowlers Inc., from Supply Chain Excellence by Peter Bolstorff and Robert Rosenbaum.
Fowlers Inc. Strategic Background
Here are highlights of the strategic background for Fowlers from the business context summary developed by the core team.
Fowlers Inc. is a billion-dollar conglomerate with worldwide leadership in three businesses: Food processing (food products group), optical technology products (technology products group), and business services (durable products group). Fowlers’ food products group is a leading North American supplier of premium fresh and frozen meat products and management services to the food service, retail, online retail, and government sectors. Customers include SuperValu, Wal-Mart, Aramark, Simon Delivers, and thousands of independent grocers and specialty restaurants.
Fowlers’ technology products group is one of the world’s largest independent suppliers of optical storage products and services, such as CD-ROM replication, CD-read and CD-write media, title fulfillment and distribution services, and optical drives. Customers include retail leaders such as Wal-Mart and Target, and category leaders such as Best Buy and Office Depot. Fowlers is also a major supplier to original equipment manufacturers (OEMs) for the personal computer market. Customers include HP, Dell, and Apple.
Fowlers’ durable products group was formed by acquiring one of the fastest-growing suppliers of business services, providing personalized apparel, office supplies, and promotional products to more than 14,000 companies and a million individual wearers. By using a dealer franchise as the route delivery mechanism, Fowlers’ durable products group has gained a competitive edge by being both knowledgeable and responsive to individual customers in the markets it serves.
- Superior product quality in the food products group and technology products group.
- Low-cost manufacturer status in the technology products group existed before outsourcing several key items in the product line.
- The durable products group is perceived as the most responsive in its chosen geographic markets, often delivering products and services on the same day as ordered.
- The food products group has a reputation for superior delivery performance, mitigating criticism of its premium prices in a commodity marketplace.
- The company’s growth in durable goods exceeded expectations.
- Lack of organization-wide assimilation of SAP functionalities.
- Delivery performance is inconsistent, especially in the technology products group.
- Customer complaints in this market are especially high. Because the market visibility is so high, Fowlers is developing a reputation in customers’ eyes as being tough to do business with (hard to place an order with, incomplete and incorrect product shipments, inaccurate pricing, poor order status capability, and so on). This is negatively affecting overall satisfaction ratings.
- Operating income of the food and technical product groups is eroding because of price pressure and a too-flat cost-reduction slope.
- High indirect purchasing costs, despite lower cost of sales.
- The rate of cost increase for customer service is significantly higher than the rate of sales growth.
- Despite sales growth, Fowlers’ stock price has taken a hit because of five quarters of poor profit-after-taxes and a bloating cash-to-cash cycle. Analyst criticism focuses on the inability to effectively manage return on assets and integrate profit potential of the business services acquisition.
- Leverage commodity buys across all product groups to improve gross profit.
- Increase effectiveness and efficiency of order fulfillment to improve customer satisfaction and reduce rate of spending on indirect goods and services (those that don’t add value to the product being produced).
- Develop more advanced knowledge management capability to add financial value to customers beyond simple price cutting.
- Accelerate market share in the durable products group by introducing an online catalogue for its end customers.
- Leverage cost-to-manufacture leadership in the technology products group to increase profits.
- Improve the efficiency and effectiveness of SAP utilization.
- Key competitors in the food products group are buying their way into the marketplace with a ‘‘lowest list price’’ strategy.
- Although the overall market for the technology products group has been in a period of decline, the group’s market share is declining even faster; customer satisfaction scores put this group in the lowest quartile of performance.
- Price point in the technology products group is getting too low to meet profit targets with the current cost structure.
- Established catalogue apparel companies are potential competitors to the online sales channel being introduced this quarter.
The Fowlers Inc. corporate value proposition is summarized by profitable growth as the preferred supplier of customers in targeted markets, driven by exceeding customer requirements.
Critical Success Factors
- Maintaining revenue contribution by increasing the share of the food products group in existing markets.
- Driving revenue growth by introducing durable products in the direct-to-consumer market and capturing targeted share.
- Achieving overall revenue growth for current year, targeted at 10 percent, and achieving targeted after-tax profit of 7 percent.
- Maintaining an image as technical leader in the technology products and food products groups, while improving overall return on assets and aggressively driving cost out of operations.
- Improving overall cash-to-cash position.
- Optimizing the utilization of SAP modules.
- Effectively integrating assets of the new durable products acquisition.
Critical Business Issues
- Customer satisfaction from all channels in the technology products group is negatively affecting sales.
- Profits are disappearing from the technology and food products groups because of higher direct and indirect costs.
- Revenue is targeted to grow to $1.02 billion, but actual projection after nine months is $1 billion.
- The durable products group integration of online capability is behind schedule.
- Inventory and receivables are expanding, seemingly uncontrollably.
- Key customers in the food products group are leaving on the basis of price-only criteria.
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This example adapted with permission from Supply Chain Excellence (AMACOM Books).
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