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Running Head: SITUATIONAL ANALYSIS 2

SITUATIONAL ANALYSIS 2

Situational Analysis

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Introduction

Situational analysis involves methods used in analyzing both the external and internal environment of a given organization. This is a useful tool that management can leverage to understand the capabilities of their organizations, customers, and the general business environment that they operate in. When conducting market research, one can estimate projected growth, define new clients, evaluate competitors, and examine the current status of the firm, all with the help of situational analysis. This paper will provide a situational analysis of Tyson foods using SWOT analysis, PESTEL framework, and Porter's five forces analysis.

SWOT analysis

Strengths

Tyson Foods, as one of the industry's leading corporations, enjoys a number of strengths that make it possible for it to compete successfully in its industry. Such benefits not only assist the organization in maintaining a customer base in existing markets but also assist it in breaking into new market segments. When activities were automated, Tyson Foods' products were more consistent, and it was easier for the corporation to scale up and down in response to changing market conditions. Tyson Foods has a high level of free cash flow, which provides the company with the resources it needs to develop into other businesses (Purkayastha & Faheem, 2021). In its long history, Tyson Foods has developed a robust supply network that has the ability to reach the majority of its targeted customers. Successful learning and training programs have produced a workforce that is extremely knowledgeable. Tyson Foods invests enormous resources in the development and training of its employee, translating to a workforce that is not only highly competent but also highly motivated to succeed in their respective fields. With a robust foundation of reputable raw materials vendors at its disposal, the company is well-positioned to avoid any supply chain bottlenecks.

Weaknesses

In specialized areas, the company faced small market share losses, owing in part to its inability to respond to the challenges posed by new entrants into the field. The current liquid to asset indicates that the company has the capacity to make greater use of its revenue than it is. Tyson Foods has a greater employee turnover rate than other companies in the industry, and as a result, it must spend significantly more on staff development than its competitors. Research and development spending is less than that of the industry's fastest-growing companies. Tyson Foods is unable to cope in terms of innovation, with the industry's high-performing organizations having spent more on research and development than the average company (Purkayastha & Faheem, 2021).

Opportunities

Major opportunities for the organization include adopting new technology, entering into new markets, and more investment into research and development in order to introduce new value for its customers. Adopting new technology will enable the company to streamline operations and attain efficiency.

Threats

The threats to the company include competitors, the rising cost of raw materials, labor, and shortage of skilled workforce. The rising cost of materials and labor may affect the profitability of the company. Shortage of skilled workforce implies the company has to invest more into training unskilled labor who still have a higher chance living the company in future.

PESTEL

Political factors

Because of the high level of governmental stability, a stable and favorable business climate with foreseeable market growth trends can be created. Political turmoil, on the other hand, discourages investors and reduces stakeholders' confidence in the economy and, as a result, in the performance of organizations. Some of the political factors affecting the organization include tax, pricing regulations, political stability, tariff, and trade regulations of countries that the organization operates in.

Economic factors

The economic development of a country has a direct impact on the performance of an organization. Tyson Foods Inc. stands to gain in a variety of ways from the expansion of the global economy (Noe & Musunuru, 2020). Another critical consideration is understanding the stage of the industrial lifecycle. It is possible that entering established economies presents additional challenges due to the fact that such markets are already saturated.

Social factors

The way of life and culture of a given society affects the way a given organization operates in a particular society. For instance, Asian societies have different values and beliefs compared to American, European, or African societies. The markets of the company ought to understand this in order to adopt the most appropriate marketing strategies that align with the values and cultural beliefs of these societies.

Technological factors

Technological factors affecting the organization majorly include social media growth, and the organization can leverage social media to market itself and improve its performance. In addition, the investment needed in the research and development of innovations also presents a concern to the organization (Yang & Akin, 2018).

Environmental factors.

Major environmental concern is with regard to the increased need for companies to embrace sustainable solutions. This puts pressure on the organization to transform its entire value chain by ensuring recycling and the use of renewable technologies.

Legal factors

Major legal factors affecting the organization include employee protection laws, consumer protection laws, and intellectual property laws. Compliance with all the above laws ensures the organization avoids legal liability.

Five forces

According to Roberts (2018), the threat of new entrants into the market is medium. Given the nature, if the industry new entrants keep bringing new innovations, that puts extra pressure on the company. The bargaining power of suppliers is low, which gives the company higher negotiating power. The bargaining power of buyers is low given the large customer base that the organization commands. The threat of substitute products is high due to the high availability of products from competitors and the low cost of switching to competitors. The rivalry among current competitors is also high, which necessitates the company to up its game in order to remain competitive.

Summary of the analysis

From the SWOT analysis conducted, the organization should maximize its strengths and opportunities while minimizing its weaknesses and threats. Tyson Foods, as one of the industry's leading corporations, enjoys a number of strengths that make it possible for it to compete successfully in its industry. Such benefits not only assist the organization in maintaining a customer base in existing markets but also assist it in breaking into new market segments.

Through the identification of the major external environmental variables that define Tyson Foods Inc.'s strategy and competitive landscape, the company may utilize PESTEL analysis to aid in the process of identifying and supporting its strategic decision-making process. Tyson Foods Inc. is attempting to expand and exploit its knowledge and core skills, and conducting a PESTEL analysis is crucial to developing successful strategies and achieving long-term growth targets in order to achieve these goals.

Strategic planners at Tyson Foods, Inc. can gain a comprehensive understanding of the factors that influence the organization's profitability in the Meat Products business by evaluating all five competitive forces. They have the capacity to identify game-changing trends early on and act swiftly to capitalize on the opportunity that has presented itself. Managers at Tyson Foods, Inc., who properly understand the Porter Five Forces, may be able to leverage these forces in their favor. For instance, from the results, the company out to increase switching costs in order to lower the threat of substitute products, continue increasing its customer base to ensure low bargaining power of buyers, having multiple suppliers to keep the bargaining power of suppliers lower and keep innovating in order to minimize the threat of new entrants.

References

Noe, S., & Musunuru, N. (2020). The impact of "Unchicken" announcement on the market valuations of Tyson Foods, Inc. and Beyond Meat, Inc.. Scholars Week. https://digitalcommons.murraystate.edu/scholarsweek/Fall2020/GeneralPosters/6/

Purkayastha, D., & Faheem, H. (2021). Dark Side Case: Tyson Foods during COVID-19 Pandemic. Academy of Management Proceedings, 2021(1), 15138. https://doi.org/10.5465/ambpp.2021.15138abstract

Roberts, T. (2018). Benefit/Cost Analysis in Public and Private Decision-Making in the Meat and Poultry Supply Chain. Food Safety Economics, 49–66. https://doi.org/10.1007/978-3-319-92138-9_4

Yang, H., & Akin, H. (2018). EXPLORING THE MEDIA USES OF FARMERS WHEN ESTABLISHING THEIR BUSINESS RELATIONSHIPS: A CASE STUDY OF TYSON FOODS LOCAL GRAIN SERVICES (LGS). https://mospace.umsystem.edu/xmlui/bitstream/handle/10355/73244/Yang-Abstract.pdf?sequence=1