Introduction
According to Marketing teacher (2010), strengths and the weaknesses forms the internal part of the issues relating to an organization. On the other hand, opportunities and the threats present the external factors affecting the operations of an organization.
Zahorsky (2009) posits that the SWOT analysis helps a company to look beyond where it is and focus on its visions. Zahorsky (2009) commented that SWOT analysis is the tool for business which is available in the tool box of every business. It can also be viewed as a tool for auditing an organization and its environment (Marketing teacher, 2010).
It is therefore advisable for every business to apply this analysis in its strategic management. SWOT analysis is very useful in assisting the companies in overcoming their competitors. Companies like JM Smuckers, whose competitors are located all over the world will find this form of analysis very useful in maintaining the company at a position ahead of its competitors.
Economic value of J.M. Smucker Company
J.M. Smucker Company is a company in North America which deals with manufacturing and marketing of branded food products. Some of the products handled by the company include ice cream toppings, coffee, sweetened condensed milk, peanut butter and fruit spreads among other products (ReportLinker, 2009). The company markets its products through various brand names. These includes Eagle brand, Jif, Crisco, Hungry Jack, Five Roses and Folgers. The headquarters of the company are located at Orrville in Ohio. The company primarily operates at US and Canada but is now extending its market to other new places.
An official report from press release source from the Smucker Company on Thursday June 17, 2010, indicated that the company experienced a fall in U.S. Retail Oils and Baking Market as well as the Coffee market divisions. This decline in sales has led the company to incur losses in these areas since the company had dearly invested there (Lunar, 2010).
Further information from the Lunar (2010) indicates that the net sales realized in the U.S. market for the Baking as well as the Retail Oils market fell by 12%. The reduction in sales significantly affected Pillsbury, Crisco and the baking mixes. In addition, the information released by the company further indicated that the profit margin for U.S. coffee market segment of the company decreased with about 15 percent (Lunar, 2010). This decline in profit was as a result of increase in the expenses incurred in the process of marketing and advertisement.
Recently, Tim Smucker has launched a multi-project initiative plan which is aimed at increasing the long term growth. However, this strategy is likely to affect the employees as well as the communities related to the impacted facilities (abc directory.com, 2010).According to abc directory.com (2010), the new facility which is replacing the original plant at Orrville will force two fifths of the workforce to lose their jobs. The affected communities may be the potential buyers of the products. This implies that the company is likely to face indirect negative impacts through implementation of new initiatives.
According to the information published by the abc directory.com (2010), Smackers are going to spend about $220 million on this project. These expenditures will consume about 5% of the total sales over this period. The company is likely to have difficulties in meeting other cash requirements associated with company operations. The company has expressed to fund part of its project with funds from the future investments.
The company has been regularly faced with the problems of the crop failures, a situation which has led the company to suffer losses. The Smackers relies on crops as their raw materials in the manufacture of the most of their products. Crop failures therefore present a big blow to the company. According to abc directory.com (2010), the company also faces a challenge of changes in the consumer tastes and preferences. This poses a big challenge to the company since it deals with a wide range of products.
The SWOT Analysis
Strengths
From the information obtained about the J.M. Smucker Company, we can analyze the progress of the company using the SWOT analysis. To start with, the company handles a wide of products. It is therefore unlikely to incur very severe losses since it can always turn to other product incase one of these fails.
In addition, the company has managed to use different brand names. This strategy has enabled the company to win a wide range of customers with varying tastes and preferences. The company also has a well established distribution network.
Relatively, it has invested on building up a new plant targeting to cut down the workforce by a large percentage. This step is going to cut down the operational costs of the company hence increasing its profit margins. It has been found that the company has strengths on some grounds. It is therefore advisable for the management to take the advantage of such grounds in solving the weaknesses related to the company.
Weaknesses
Although J.M. Smucker Company has displayed a track of success over the past, the company suffers some weaknesses. This can be revealed from the data collected about the company. As observed earlier, the information released by the company on June 2010 indicated that the company’s sales in U.S. Retail Oils and Baking Markets as well as the Coffee market divisions had decrease. This was caused by the nature of the market in the region during the period.
The market environment in the region offered a high level of competition causing the company’s products to lose to their competitors. This indicates that the Smuckers have not fully intensified their promotions and advertisement in the whole market. To overcome this problem, the company should increase its investment on advertisement and promotions in the region. This will help the company in recovering from this fall in sales.
According to NetMBA (2010), a company can use the weapon of differentiation in order to survive in the competitive world. This can be done by making slight changes on the products to differentiate them from those of potential competitors.
Conclusion
From the above analysis, it can be concluded that SWOT analysis is a very vital practice in any business. The process gives the business an opportunity to discover its strengths as well as their weaknesses which helps in making the most feasible decisions.
Reference List
Abc directory.com (2010).The J. M. Smucker Company .
Böhm A. (2009). The SWOT Analysis. GRIN Verlag.
Henry, A. (2007). The Internal Environment: A Resource Based View of Strategy. Understanding Strategic Management. Oxford University Press. Web.
Lunar, (2010). The J. M. Smucker Company Announces Record Fourth Quarter and Full Year Results.
NetMBA,(2010).The Value Chain. Web.
ReportLinker, (2009). The J.M. Smucker Company – Financial and Strategic Analysis Review. Web.
SWOT analysis: Lesson. (2009). Retrieved from Marketing Teacher. Web.
Zahorsky, D. (2009). A business owner’s secret weapon: SWOT analysis.