Swot Analysis

Antillean Baking Company produces and sells a variety of baked products such as bread, biscuits and buns on the local market. In recent years it has lost market share and management has decided to do a SWOT Analysis of the following areas-: (1) Customers, (2) Suppliers, (3) Competitors and (4) Intermediaries.

(a) What does the term SWOT Analysis mean? (4 marks)

(b) Identify and outline the impact on the company’s operations of the TWO trends in EACH of the four areas identified above. (21 marks)

(a) In order to develop a marketing plan or strategy which can identify preferred and likely directions, the firm can conduct a SWOT Analysis which is a general and quick examination of a business’s current position. The SWOT Analysis will identify strengths and weaknesses of the business and external opportunities and threats. SWOT analysis can be used to explore a range of situations such as existing marketing strategies, consumer perception of products, effectiveness of distribution and brand image. For example in the case of Antillean Baking Company, the firm may be able to assess their strengths and weaknesses and the strengths and weaknesses of its competitors which would be the threats and opportunities to the firm. This information may help Antillean formulate the reason for the lost market share.

(b) In preparing a strategic plan to regain its lost market share Antillean Baking Company must first find out what factors caused the decline in market share. With this information the company can take corrective actions to stop the decrease and increase its market share. To be able to identify the trends in the market Antillean Baking Company must consider the major stakeholders of the firm which are the customers, the suppliers, the competition and the intermediaries.

In such a dynamic and evolving customer market a SWOT analysis of the firm’s consumers may identify trends such as changes in consumer taste and preferences. Consumers today are becoming very health conscious and are demanding products to maintain a healthy diet. This change in preference, may have led customers to decrease their consumption of regular bread and increase the demand for health conscious products such as whole wheat bread. If Antillean Baking Company was not able to produce this new health conscious product or effectively meet the demand for it, consumers would have reduced their consumption of their products. Also, in the event that the firm was actually producing the wheat bread but not effectively supplying the demand, consumers would have abandoned the firm and this could have led to a decrease in the firm’s market share.

Another trend that may have been identified by the SWOT analysis is the gradual decrease in the size of the family. This decrease in size may have led to an overall decrease in population size and an increase in standard of living. If the size of the market has decreased it means that there are fewer people willing to purchase the firm’s products which are an overall decrease in market share. Also, a decrease in family size has allowed a change in people’s lifestyles. For example, in these vibrant economic times consumers are moving away from the tradition of mother’s preparing breakfast at home. Instead, these mothers are now part of the labour force and have illuminated breakfast at home. Consumers have shifted from having sandwiches and toast to fast food for breakfast. This decrease in the demand for bread may have caused the firm’s market share to fall as there is now less persons consuming bread at home.

Suppliers are a major stakeholder in the operations of Antillean Baking Company. One trend that may have developed among suppliers is that they have started to serve only large businesses. Serving only large businesses means that the firm might be reluctant to supply smaller businesses. They may place most of their attention on these firms as they constitute a large part of their sales. This will negatively affect Antillean as the supplier will not emphasize timely delivery or good quality raw materials delivered to them. Furthermore, If Antillean receives raw materials late or faulty materials, the products may be defective or behind production targets. If the firm produces faulty products it may earn a bad reputation and loose customers. Also, if the firm is not able to meet orders on time it may loose customers this, reducing market share.

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