UNIVERSITY OF KARACHI

KUBS MBA-II (EVENING)

BUSINESS MANAGEMENT
ASSIGNMENT-1 TOWS ANALYSIS
NESTLE K&NS Dunkin Donuts

SUBMITTED BY: AMMAR AHMED

SUBMITTED TO: SIR NOMAN

Difference between SWOT & TOWS Analysis

Business managers are responsible for setting a company's mission and goals and creating a strategic plan to guide the company to achieve its goals. Managers use a variety of tools and methods to inform decisions during the planning process including SWOT analysis and TOWS analysis, which are closely related brainstorming exercises. What is a SWOT Analysis? A SWOT analysis is a strategic planning tool that involves listing a company's strengths, weaknesses, opportunities and threats, or SWOT. Strengths are things a business does well or advantages it has, such as dedicated workers, an innovative product design or a good retail location, while weakness are things a business does poorly or disadvantages it has. Threats are those external factors that might harm the business, such as competitors and unfavorable government regulations, while opportunities are external factors that might benefit the company, including untapped markets or favorable regulations. After creating a list of strengths, weaknesses, opportunities and threats, managers think of ways the business can maximize strengths and use them to reduce weaknesses; take advantage of opportunities; and avoid or minimize threats What is a TOWS Analysis? A TOWS analysis involves the same basic process of listing strengths, weaknesses, opportunities and threats as a SWOT analysis, but with a TOWS analysis, threats and opportunities are examined first and weaknesses and strengths are examined last. After creating a list of threats, opportunistic, weaknesses and strengths, managers examine ways the company can take advantage of opportunities and minimize threats by exploiting strengths and overcoming weaknesses. SWOT vs. TOWS SWOT and TOWS analysis involve the same basic steps and likely produce similar results. The order in which managers think about strengths, weaknesses, threats and opportunities may, however, have an impact on the direction of the analysis. Michael Watkins of the "Harvard Business Review" says that focusing on threats and opportunities first helps lead to productive discussions about what is going on in the external environment rather than getting bogged down in abstract discussions about what a company is good at or bad at.

TOWS Strategic Alternatives Matrix External Opportunities (O) 1. 2. 3. 4. External Threats (T) 1. 2. 3. 4.

External Factors Internal Factors

Internal Strengths (S) 1. 2. 3. 4. Internal Weaknesses (W) 1. 2. 3. 4.

SO "Maxi-Maxi" Strategy Strategies that use strengths to maximize opportunities. WO "Mini-Maxi" Strategy Strategies that minimize weaknesses by taking advantage of opportunities.

ST "Maxi-Mini" Strategy Strategies that use strengths to minimize threats. WT "Mini-Mini" Strategy Strategies that minimize weaknesses and avoid threats.

This helps you identify strategic alternatives that address the following additional questions:

Strengths and Opportunities (SO) How can you use your strengths to take advantage of the opportunities? Strengths and Threats (ST) How can you take advantage of your strengths to avoid real and potential threats? Weaknesses and Opportunities (WO) How can you use your opportunities to overcome the weaknesses you are experiencing? Weaknesses and Threats (WT) How can you minimize your weaknesses and avoid threats?

NESTLE
SWOT Analysis
Strengths: S1. Globally recognized as one of the largest and powerful food producers, covering almost every country (factories and plants). S2. Employs approximately 280,000 people globally. S3. Powerful brand positioning in the consumers mind. S4. It has a vastly diversified product portfolio containing approximately 6000 brands (beverages, ice creams, frozen food items, chocolates and biscuits, pet care nutrition items, etc.) S5. It has established joint ventures with giants like Coca Cola, General Mills and LOreal that are helpful in providing knowledge on different technological aspects. S6. Quality is a vital element regarding nestle products.

S7. Largest consumer products organization that operates globally. S8. Produces low cost products that give them an edge to their competitors. It also has low operating costs. Weaknesses: W1. Hovering over the stats of 2008, the food industry grew 8.9% but Nestle lacked the potential to raise their sales in the organic food division that lay flat. W2. Regulators like FDA and AMA (American Medical Association) are pressing on the firm for removing tags that hold no ground such as low cholesterol or heart healthy. Parents have also reported diabetic epidemic due to the consumption of such goods, in children especially. Promoting infant milk products comparing to breastfeeding. Slaves in African countries that are working under it. It holds up a negative effect regarding the whole brand. W3. Many products are not understandable in different countries. It did not make much of an impact in France with their LC-1 (food commodity). Opportunities: O1. Due to the high intensity of the health conscious awareness in the society, more health based products are required especially with incompromisable quality. O2. Can go into the anti-allergy products that are very common, such as peanut free or gluten free products. O3. They can also invest in snacks that would further diversify its product portfolio. O4. Provide incentives to the retailers to increase sales volume. O5. Open cafes that would exclusively provide Nestle products. O6. In Asian countries like India, Pakistan, Bangladesh; consumers are mostly price conscious rather than health conscious. Nestle has an opportunity to have extensive strategies implemented to gain the market in such countries. O7. Developing countries have a higher rate of GDP than those of developing countries, Nestle should enter in such markets as well. Threats: T1. Inflation rise is giving birth to high prices. Raw chocolate prices are jumping, along with the Dairy costs; which leaves heavy cuts in the margin in order to make the customers brand loyal. They have also shrink the packaging which is not really noticeable, so the customers are paying the same amount for a lesser product. T2. Competitors like Cadbury Schweppes, Hersheys, Quaker, Heinz, Del Monte, Kelloggs, and Kraft Foods are also well established. Its a tough market with a tougher competition for gaining market share.

T3. Poverty sector in developing countries is also a lacking that must be watched over for.

SO Analysis S1O3. As they are globally recognized so they can spend in snacks market to diversify their products S1O5. As they are globally recognized so they can open cafes that would exclusively provide Nestle products S2O4. As they have employees about 280000 so they can provide incentives to the retailers to increase sales volume. S6O1. Quality is a vital element regarding nestle products and due to the high intensity of the health conscious awareness in the society, more health based products are required especially with incompromisable quality. ST Analysis S1T2. As they are globally recognized as one of the largest and powerful food producers, covering almost every country (factories and plants) so they can tackle Competitors like Cadbury Schweppes, Hersheys, Quaker, Heinz, Del Monte, Kelloggs, and Kraft Foods. S8T1. Inflation rise is giving birth to high prices. Raw chocolate prices are jumping, along with the Dairy costs; which leaves heavy cuts in the margin in order to make the customers brand loyal. As they produce low cost products that give them an edge to their competitors. It also has low operating costs so they can easily go through this situation. WO Analysis W1O6. During 2008, Nestle lacked the potential to raise their sales in the organic food division but in Asian countries like India, Pakistan, Bangladesh; consumers are mostly price conscious rather than health conscious so Nestle has an opportunity to have extensive strategies implemented to gain the market in such countries. W1O4. During 2008, Nestle lacked the potential to raise their sales in the organic food division so they can provide incentives to the retailers to increase sales volume W3O1. Due to the high intensity of the health conscious awareness in the society, more health based products are required especially with incompromisable quality. As many products are not understandable in different countries so they can use good marketing strategy to let people know about their product. WT Analysis

W1T2. During 2008, Nestle lacked the potential to raise their sales in the organic food division so they should use some great strategy to increase sales and face the competitors like Cadbury Schweppes, Hersheys, Quaker, Heinz, Del Monte, Kelloggs, and Kraft Foods that are also well established. W3T2. Many products are not understandable in different countries. It did not make much of an impact in France with their LC-1 (food commodity) so they should spend on marketing to fight Competitors like Cadbury Schweppes, Hersheys, Quaker, Heinz, Del Monte, Kelloggs, and Kraft Foods

K&NS
SWOT Analysis
Strengths S1. K&Ns is recognized as a brand name S2. Full nourishment diet S3. ISO 9001:2008 certified Weaknesses W1. Expensive food W2. They are presented in only posh areas markets W3. Non presence in country side W4. Lack of awareness in people W5. Their discount only for their regular customers Opportunity O1. They can give discount to customers O2. They can spend more on marketing O3. The company will extend their business in all over the world through export the products O4. The country also gets benefit in economic power through trade of foodstuffs Threats T1. There is a big threat from competitors like Menu, Man-o-Salva, Dawn food etc T2. Increase in inflation rate in the country

T3. Diseases in the poultry like bird flu, Influenza, Hydro pericardium syndrome etc.

SO Analysis S1O3. K&Ns is recognized as a brand name so the company can extend their business in all over the world through export the products S1O2. K&Ns is recognized as a brand name so they can spend more on marketing S2O4. They provide full nourishment diet so the company can also get benefit in economic power through trade of foodstuffs ST Analysis S1T1. There is a big threat from competitors like Menu, Man-o-Salva, Dawn food etc but as K&Ns is recognized as a brand name so they will face their competitors easily. S2T3. As they provide full nourishment diet so diseases in the poultry like bird flu, Influenza, Hydro pericardium syndrome etc can be reduced WO Analysis W1O1. They can provide less expensive food or they can give discount to customers W1O4. As they provide expensive food so the company can gets benefit in economic power through trade of foodstuffs W2O1. They can give discount to customers as they are presented in only posh areas markets W4O2. They can spend more on marketing to make people aware about their product W5O1. Their discount only for their regular customers so they can give discount to all customers WT Analysis W1T2. By giving less expensive food they can fight Increase in inflation rate in the country W4T1. They can spend more on marketing for awareness in people so that they will fight with competitors like Menu, Man-o-Salva, Dawn food etc

Dunkin Donuts
SWOT Analysis

Strengths S1. Dunkin Donuts is known for the large variety of doughnuts, flavors and other baked items like donut whole treats, bagels, muffins and munchkins etc. The products of the company are available at more than 6,590 outlets and franchises in more than 4,815 alone in the United States of America. S2. Dunkin Donuts was founded in the year of 1950 and has today expanded its operations in many countries of the world. The company is now one of the largest baked goods and coffee chains in the world. According to a survey the company sells more than 4 million doughnuts and about 2.7 million coffee cups every day. S3. Dunkin Donuts has established a good reputation over the last five decades for brewing high quality and tasty coffee. In the America, Dunkin Donuts is the largest retailer of coffee-by-the-cups and serves nearly 1 billion brewed coffee cups each year. S4. The company is known to be using hundred percent original Arabica coffee beans to make delicious coffee. The special ingredient is known by the food industry as a superior grade of coffee. S5. The company to develop more loyal customers as well as to retain the customers offers discount cards and special deals coupons. Weaknesses W1. Dunkin Donuts does not spend much for marketing its products and on media advertising while its competitors do. W2. The price of different ingredients and raw materials especially high quality coffee beans is increasing. Also the company needs to introduce low calorie doughnuts and other food items. Opportunities O1. Consumption if Coffee is ion a constant increase in Asia as in these countries the disposable incomes of the people are increasing and they are spending more on hot and baked items. One such country that has a large potential market is China. Furthermore, there is an increase in demand for doughnuts and similar baked items in Singapore, Malaysia and Taiwan. O2. With the growing western influences and increasing acceptance of western trend among the youth is another opportunity that can result in greater market share of the company. O3. The recession is again an opportunity for two reasons. First the company offers comfort foods that are warm and sugary and also that snacks and baked foods are cheaper as compared to other food items. Threats T1. The growing trend of a healthier lifestyle being adopted by the people is a threat as they try to avoid the high calorie or sugary food. T2. Starbucks and McDonalds are its main competitors that offer similar kind of food items and snacks and there is a chance of customers switching to other food products. Another major competitor and hence

threat for the company is Krispy Kreme that can cause a large reduction in the market share of Dunkin Donuts. T3. The entry barriers are low in the coffee, doughnut and baked items industry. Even the local bakeries and coffee shops are a threat for the company. SO Analysis S1O1. Dunkin Donuts is known for the large variety of doughnuts, flavors and other baked items like donut whole treats, bagels, muffins and munchkins etc. The products of the company are available at more than 6,590 outlets and franchises in more than 4,815 alone in the United States of America. Consumption if Coffee is ion a constant increase in Asia as in these countries the disposable incomes of the people are increasing and they are spending more on hot and baked items. One such country that has a large potential market is China. Furthermore, there is an increase in demand for doughnuts and similar baked items in Singapore, Malaysia and Taiwan. S2O2. Dunkin Donuts was founded in the year of 1950 and has today expanded its operations in many countries of the world. The company is now one of the largest baked goods and coffee chains in the world. According to a survey the company sells more than 4 million doughnuts and about 2.7 million coffee cups every day. With the growing western influences and increasing acceptance of western trend among the youth is another opportunity that can result in greater market share of the company. S5O3. The recession is again an opportunity for two reasons. First the company offers comfort foods that are warm and sugary and also that snacks and baked foods are cheaper as compared to other food items so there is an opportunity for the company to develop more loyal customers as well as to retain the customers offers discount cards and special deals coupons. ST Analysis

S1T1. Dunkin Donuts is known for the large variety of doughnuts, flavors and other baked items like
donut whole treats, bagels, muffins and munchkins etc. The products of the company are available at more than 6,590 outlets and franchises in more than 4,815 alone in the United States of America. So people can easily choose less calorie or sugar free food items.

S3T3. The entry barriers are low in the coffee, doughnut and baked items industry. Even the local
bakeries and coffee shops are a threat for the company but Dunkin Donuts has established a good reputation over the last five decades for brewing high quality and tasty coffee. In the America, Dunkin Donuts is the largest retailer of coffee-by-the-cups and serves nearly 1 billion brewed coffee cups each year. S4T3. The entry barriers are low in the coffee, doughnut and baked items industry. Even the local bakeries and coffee shops are a threat for the company but the company is known to be using hundred percent original Arabica coffee beans to make delicious coffee. The special ingredient is known by the food industry as a superior grade of coffee. WO Analysis

W1O1. Dunkin Donuts can spend much for marketing its products and on media advertising as its competitors do to increase consumption of Coffee in Asia as in these countries the disposable incomes of the people are increasing and they are spending more on hot and baked items. One such country that has a large potential market is China. Furthermore, there is an increase in demand for doughnuts and similar baked items in Singapore, Malaysia and Taiwan. W1O2. Dunkin Donuts should spend much for marketing its products as with the growing western influences and increasing acceptance of western trend among the youth is another opportunity that can result in greater market share of the company. W2O3. The price of different ingredients and raw materials especially high quality coffee beans is increasing. Also the company needs to introduce low calorie doughnuts and other food items. The recession is again an opportunity for two reasons. First the company offers comfort foods that are warm and sugary and also that snacks and baked foods are cheaper as compared to other food items. WT Analysis W1T2. Starbucks and McDonalds are its main competitors that offer similar kind of food items and snacks and there is a chance of customers switching to other food products. Another major competitor and hence threat for the company is Krispy Kreme that can cause a large reduction in the market share of Dunkin Donuts so Dunkin Donuts should spend much for marketing its products and on media advertising. W2T1. The growing trend of a healthier lifestyle being adopted by the people is a threat as they try to avoid the high calorie or sugary food so the company needs to introduce low calorie doughnuts and other food items. W2T3. The entry barriers are low in the coffee, doughnut and baked items industry. Even the local bakeries and coffee shops are a threat for the company so they should reduce the prices of their food items.

http://smallbusiness.chron.com/difference-between-swot-tows-analysis-23169.html

http://www.mindtools.com/pages/article/newSTR_89.htm

http://shahsawar260.wordpress.com/case-studies/nestle/

http://www.scribd.com/doc/73731025/Marketing-Strategy-of-K-N-s

http://www.freeswotanalysis.com/fast-food-companies-swot-analysis/14-dunkin-donuts-swotanalysis.html