SWOT - Barclays

SWOT Analysis

Strengths:

• The bank started first started in 1690 and enjoys strong market penetration.
• It was the first bank to launch credit cards in UK and thus the brand has become ingrained in the psyche of the consumers. This is further reinforced with the sponsorship deal for the English Premier League.
• Robust financial performance
• Increasing online security to combat fraud. The software will provide greater protection against such fraud.
• Geographically diversified operations.

Weaknesses:

• The company has a very small presence in the emerging markets of Asia. This can prove to be a strategic error of colossal nature. Nonetheless, this situation can also be turned into an opportunity.
• Lower profit margins. The 2 billion pound write-down in the value of risky assets, led to a fall in profit of 32%
• Low return on assets.

Opportunities:

• Expansion into new emerging markets like India. In fact the Barclays credit card was launched in India just a few months ago.
• Acquire a company to inorganically expand its business. Barclays tried unsuccessfully to acquire ABN AMRO of Netherlands. Now it is looking at some of the financial firms in the US like Lehman and UBS.
• Buoyant asset management market
• Positive outlook for global banking industry

Threats:

• With the high likelihood of Barclays acquiring another financial firm of similar size, it would face huge post-merger integration challenges. This would especially be sharp given its failed attempt to broker a deal with ABN AMRO. There would be negative perception and resistance among the employees of the potential target.
• The latest industry figures show that internet and e-commerce fraud on cards rose 45% in 2007, through skimming, data hacking or unsolicited emails or phone calls. This is a huge potential threat to Barclays in the future.

SWOT - HUL

SWOT Analysis

Strengths
1. Strong and well differentiated brands with leading share positions
2. Distinctly placed products providing reach to every segment of society.
3. Consumer understanding and systems for building consumer insight
4. Integrated supply chain and well spread manufacturing units
5. Distribution structure with wide reach, high quality coverage – The launch of project “Shakti” has helped HUL to create brand awareness and extensive reach in rural India.
6. Access to Unilever global technology, capability and sharing of best practices from other Unilever companies.
7. Well placed to take advantage of growth in rural India and lower strata of the society through “Shakti”.
8. It could look at introducing products from its parent company like margarine in order to cater to changing consumer tastes and opportunities in food sector.
9. It can be a leader in exports by positioning itself as a sourcing hub for Unilever companies in various countries.

Weaknesses
1. Price positioning in some categories allows for low price competition like Amul captured Kwality’s market.
2. Limited success in changing eating habits of people.
3. Competitors focusing on a particular product and eating up HUL’s share, like Nirma focusing on soaps and detergents.

Opportunities
1. Growing consumer base due to increasing income levels and new consumers from lower strata of the society
2. Untapped market in branded Ayurvedic medicines and other such consumer products.
3. Opportunity in Food sector: changing consumer tastes
4. Expansion of horizons towards more and more countries

Threats
1. Unfavourable raw material prices due to inflation, reducing profitability.
2. Heavy onslaught of competition in the core categories from emerging players like ITC will result in higher advertising expenditure
3. Spurious/counterfeit products in rural areas and small towns.
4. Reduction in real income of consumers due to high inflation.

SWOT - ITC

SWOT ANALYSIS

Strengths:
Cigarettes are the main business. Introduction of VAT on cigarettes could have affected the sales. But the company managed to maintain market leadership and increase volume sales by 16 % last year
Cigarette business: Company uses a unique IT-enabled ‘Six Sigma’ based product development process. This product development process and the deep consumer insights give the company the unique understanding of positioning and brand development of its products.
Cigarette business: initiatives such as contemporary, internationalised packaging for ‘India Kings’ and ‘Gold Flake Kings’, multiple limited Edition Packs and flavour variants for ‘Classic’, etc have resulted in considerable fortification of your Company’s strong position in the premium, value-plus segment of the market.
Cigarette business : Modernization of Primary Manufacturing in Munger, introduction of sophisticated material handling systems at Bengaluru and implementation of cutting edge Norwegian technology – Cold Plasma Odour Abatement Systems – at the Bengaluru and Saharanpur primary manufacturing departments.
FMCG business: Relentless focus on providing consumers well-differentiated best-in-class products, supported by significant investments in product development, innovation, manufacturing technology and unmatched distribution infrastructure have dramatically enhanced brand equity of this business.
FMCG business: Ashirwad and Sunfeast continue to draw upon the agri sourcing strengths of e-Choupal network to gain competitive advantage by obtaining superior quality wheat at competitive costs.
Hotel and lifestyle retail business have shown strong growth because of booming Indian economy.

Weakness:
Cigarette business: The year ahead is fraught with extreme uncertainties, since for the first time in the history of the industry, manufacturers will not be able to position viable offers for consumers of non-filter cigarettes in view of the massive increase in excise duty rates in this segment.
Cigarette business: Harsh regulatory climate for cigarette business presents a daunting operating environment that will, undoubtedly, test the resilience of all legitimate players in the industry.
FMCG business: The year ahead presents a unique challenge to the business in the shape of an unprecedented rise in commodity prices across the board, including wheat, vegetable oil, maize and skimmed milk powder.
FMCG business: Soaring fuel prices and the need growing volumes without adversely impacting margins has been rendered extremely challenging.

Opportunities:
Big Indian market with huge consumption capacity.
ITC is moving into new and emerging sectors including Information Technology, supporting business solutions.
e- choupal is a well thought of initiative taken by ITC which can also be used in other sectors in many other parts of the world. ITC leverages the concept of e-choupal in a novel way. The company researched the tastes of consumers in the northern, western and eastern India of atta, and then used the network to source and create the raw materials from farmers and then blend them for consumers under purposeful brand names. This concept is quite difficult for competitors to emulate.

Threats:
The obvious threat is from competition both domestic as well as international. ITC’s opportunities are likely to be opportunities for other companies as well. Therefore the dynamic of competition will alter in the medium term. Western companies might see India as an exciting opportunity for themselves to find new market segments for their own offerings.
The company is more or less still dependant on its tobacco revenues to fund up its cash guzzling FMCG start up. Cigarettes account for about 47 percent of the company’s turnover. The increasing tax on cigarettes and the growing concern of people regarding the health hazards being caused by smoking can eat up most of the profits of the company.

SWOT - P&G

Objective: “We will provide branded products and services of superior quality and value that improve the lives of the world's consumers, now and for generations to come. As a result, consumers will reward us with leadership sales, profit and value creation, allowing our people, our shareholders and the communities in which we live and work to prosper.”

SWOT Analysis:

Strengths:
Diversification: Product diversification with about 300 products. The diverse product mix includes personal and beauty items, household products, health and wellness, Baby and family and pet care and nutrition.
Research and development: P&G invests 3 - 4 % of Net outside Sales in research and development (R&D). This amount easily exceeds their leading competitors, among consumer products companies. They also have more Ph.D.s working in labs around the world than the combined science and engineering faculty at Harvard, MIT and Berkeley.
Innovation: In fiscal year 2004-05, P&G was granted 27,000 patents globally. P&G has produced a number of new products like diapers; shampoo and conditioner in one; toothpaste that prevents osteoporosis. Its diversified product mix helps in connecting technology across categories and brings innovation to the product.
Fat profit margins: P&G announced net sales for the April - June quarter to $21.3 billion, the growth of 10%. This is the seventh year and 24th consecutive quarter in which P&G delivered top-line growth above the company's targets.
Strong brands: P&G has 13 Billion-Dollar Sales Brands such as: Always, Ariel, Bounty, Charmin, Crest, Downy/Lenor, Folgers, Iams, Pampers, Pantene, Pringle's and Tide. The total sales of these thirteen ‘billion dollar brands’ taken together, would make a Fortune 100 company in itself.
Brand building: Advertisement expenditure of P&G is twice than the next company on the list of companies which spend highly on advertising. Their idea of promoting product during weekday daytime slots when mostly housewives would be available helped in building the brand in a big way.
Wide distribution network: P&G markets its products in 160 countries with manufacturing capacities in 40 countries.
Leading market position: P&G is the world's largest consumer products company. P&G is the global leader in all its 5 broad business segments.

Weaknesses:
Non-profitable products: Running products which may not be profitable but still had to do it because of keeping up with the market presence strategy. Few such products are Crest as toothpaste, Always hygiene pads, Dawn dishwashing bar.
Inadequate quality control: With large number of product profile, the quality control of all the products has deteriorated. In September 2006, P&G suspended sales of the cosmetics in China after they were found by the authorities to contain the banned substances, chromium and neodymium. The case of Rely tampon also establishes this fact.
· Mass appeal products at premium price: Some mass appeal products like Pringles are priced very high as compared to its competitor’s products.

Opportunity:
Developing markets: The economies of China and India are growing at a very fast pace. The company currently competes in only about 10 of its top 25 categories in most developing countries. This provides P&G with an opportunity to enhance its market share as well as expand its presence in other categories.
Growing bottled water market: Bottled water is a fast-growing segment in the world’s food and beverage market owing to increasing health concerns. In May 2007, P&G launched PUR Flavor Options, a product that allows consumers to choose flavored or unflavored water from their home water filter. P&G could leverage its position in the bottled water segment to capitalize on the growing demand for packaged and flavored water.
Growing healthcare industry in the US: There is a growing opportunity for disinfectant manufacturers in the healthcare industry in the US. The aging US population would lead to increased healthcare spending in the US. P&G is well positioned in the prescription drugs and healthcare segments and can leverage this trend to boost both its revenues and market share.
· Changing consumer preference: With the consumer preferences and choices, P&G because of its huge R&D base and Connect + Develop program is well placed to come up with new and innovative products that may suit the customer needs.
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Threats:
New regulations: Due to increasing public pressure, the US Food and Drug Administration (FDA) are expected to impose stringent quality norms on cosmetic products. New regulations may delay launch of new products and result in higher product development expenditure. These regulations may impose new liabilities or increase operating expenses, either of which could result in a decline in profitability.
Competition from local low cost players: P&G faces competition from local, low-cost manufacturers in developing countries.
Customer concentration: A significant portion of the revenues from the sale of products is derived from a few customers. Sales to Wal-Mart Stores, Inc. represent approximately 15% of its total revenue in 2007. The company gets more than billions of dollars from seven retail customers. The loss of any of these customers will lead to a sharp decline in its revenues.

SWOT - Nestle

Objective: “Aim to build a business as the world's leading nutrition, health and wellness company based on sound human values and principles.”

SWOT analysis:

Strengths:
Diversification: Nestle has a wide product portfolio encompassing baby foods and dairy products, chocolates and breakfast cereals and food seasoning.
Joint ventures: Nestle holds joint ventures with leading businesses like Coca Cola, General Mills and L'Oreal which allow it to access their technical knowledge to further develop its own brand.
Influencing consumer decisions: With its innovative and attractive advertising campaigns Nestle is able to influence customer's buying decisions.
Established brand across the globe: With an employee base of over 200,000, annual revenues of more than $120 billion and a presence in more than a 100 countries, Nestle brings with it a strong brand name and knowledge of different markets all over the world.

Weaknesses:
Negative effects on the brand image: The investigations into the controversial advertising campaign that promoted infant milk products over breastfeeding and the usage of slave labor for its plants in African countries continue even today and Nestlé’s brand name has been negatively affected due to the media campaigns covering this issue.
Storage and transportation problems: Because the Indian food industry is not developed enough to handle complex storage and transport requirements, Nestle has a difficult job of providing product quality at centers far off from the manufacturing base.
Complex supply chain management: Nestle has a complex supply chain management and the main issue for Nestle India is its traceability.

Opportunities:
Growing middle class: The growing middle class and the high percentage of youth population provides an excellent opportunity for Nestle to use its existing range of kiosks in malls and educational institutes to build a loyal brand following.
Urbanization and nuclear families: With the Indian society moving towards a more urban and nuclear family society, Nestle has huge market for its products like Maggi and Dahi and other milk products.
· Low labour costs in developing countries: Since manufacturing of some products is cheaper in India than in other South East Asian countries, Nestle India could become an export hub for the parent in certain product categories.

Threats:
Cost of raw materials: Inflation rising at the pace that it is puts a strain on Nestle for buying its raw materials like food grains and yet maintaining its margins.
Indians perception towards fresh foods: Indians believe in eating fresh foods instead of ready to eat products, which provide a major hurdle in the marketing of Nestle products across the country.
Exports to a single location: The company’s exports stood at Rs 2,571 m at the end of 2003 (11% of revenues) and continue to grow at a decent pace. But a major portion of this comprises of Coffee (around 67% of the exports were that of Nescafe instant to Russia). This constitutes a big chunk of the total exports to a single location. Historically, Russia has been a very volatile market for Nestle, and its overall performance takes a hit often due to this factor.
Liberalization of trade and investment policies: Nestle faces immense competition from the organized as well as the unorganized sectors. Off late, to liberalize its trade and investment policies to enable the country to better function in the globalised economy, the Indian Government has reduced the import duty of food segments thus intensifying the battle.