Internal Analysis: SWOT analysis

SWOT analysis as analytical tool for internal Analysis

SWOT analysis simply refers to strength, weaknesses, opportunities, and threats which represent an outline for analyzing a company’s internal and external environment. Strength and weakness are referred to the internal environment whereas opportunity and threat are referred to the external environment of Hwa Tai. It will give a quick review for the company for decision making. Strength

Strengths are concern about the competitive power in food industry of Hwa Tai. Hwa Tai have competitive advantage to become second best biscuit manufacturing company in Malaysia. Hwa Tai has invested high cost in research and development in order to produce better quality products to attract more buyers. Hwa Tai has core competence of strategic capability to achieve competitive advantaged since they try to produce new product developed new market opportunity. Under Resource-Based View, Hwa Tai has tangible resources which also known as physical resources, Hwa Tai has its own lab and professionals to conduct R&D are a ways of achieving market efficiency. Hwa Tai has also intangible resources which is technological resource to modernize the existing products to satisfy the customer’s expectation. (Refers to APPENDIX). Hwa Tai Has Dynamic capability because the company try to produce

This Resource-Based View enables Hwa Tai to allocates their resources effectively and could be achieve cost effectiveness without resource wastage. The strategies effort of Hwa Tai has eventually achieve a lot of awards for its biscuit products such as Malaysia Power Brand Award 2008 (refers to APPENDIX) by the Asia Entrepreneur Alliance Worldwide. Weakness

On the other hands, Weakness is a limitation in firm’s resources and may create comparative disadvantage. Hwa Tai has its own weakness although it has been achieving success with their strenth. Hwa Tai has limited existence of organic food since consumers nowadays have care about their healthy. According to survey, Buyers have preferred organic food to normal food because they think those organic foods which free from chemical are healthier. Only the product with the brand name of “LUXURY” fulfills the
requirement as organic food because they contain whole meal, wheat and low cholesterol which consumers think that they are healthier. However, the other products of Hwa Tai still not be grouped as organic food and this may caused Hwa Tai lost some market opportunity which loves organic food and their sales will not be as high as what Hwa Tai expected.

Benchmarking as analytical tool for internal analysis

Benchmarking is a system which understanding how Hwa Tai compares with others which normally include their main competitors. After We analyzing, we found that Nestle is a more successful company compared to Hwa Tai. Unlike Hwa Tai, Nestle has diversification and manufactured a numbers of products because Nestle has much wide range of products compared with Hwa Tai. In order to achieve this competitive disadvantage, Hwa Tai should improve and develop a numbers of new products besides the current type of products although it has been making non-traditional product such as baked potato chips to suit the consumers’ taste but new market opportunity failed to discover since they don’t have well strategic planning on the new product.

Hwa Tai has only three types of food which involve of biscuits, cakes, and snacks currently whereas Nestle has more types of food such as drinks, instant noodles, biscuits, cakes, snacks and so on. Wider range of food enables company to gain wider market and higher sales. If Hwa Tai does as what Nestle did, it will as successful as Nestle.

APPENDIX
Types of resource and their competence
Resource: “what we have”

Competence:” what we do well”
Machines, Buildings, raw materials, products, patents, data bases, computer systems. Physical
Ways of achieving utilization of plant, efficiency, productivity, flexibility and marketing Balances sheet, cash flow, suppliers of funds
Financial
Ability to raise funds and manage cash flows, debtors, creditors etc Managers, employees, partners, suppliers, customers
Human
How people gain and use experience, skills, knowledge, build relationships, motivate others and innovate.

The awards & achievements by Hwa Tai in their careers