3. Align your strategy to your objectives.

SWOT (strengths, weaknesses, opportunities, and threats) analysis has long been established in the realm of academia and practice as a valid fundamental tool to realize the desired alignment of organizational important internal and external factors.[26] An SME can list beneficial and non-beneficial internal and external factors in the four quadrants of SWOT analysis to highlight how it can leverage its existing strengths to capture the opportunities such as entering adjacent markets and adding new lines of business. In the meantime, it shall acknowledge its weakness that can hamper its progress or enhance the organizational threats.[27] Thus, an SME can effectively use the SWOT analysis to design its future strategies such as how it can retain its customers or entice its competitor’s customers. For instance, several agribusinesses are retaining their customers by improving the quality of their services by collaborating with their customers and by offering products according to the customers’ demands. Following figure shows why SWOT analysis is important for a business.

How to use SWOT analysis:

Different authors have proposed different methods to use SWOT analysis for an SME, industry or an economy. However, a detailed approach to conducting the SWOT analysis has been provided and has recommended for performing SWOT analysis[28] using the following steps:

Understand the purpose of the SWOT analysis: An SME shall decide first the main objective it intends to achieve from the SWOT analysis, such as gaining double-digit growth based on introducing new products and services (lines) of the businesses.

Research your industry: After establishing a clear objective, the SME needs to research to understand the industry. Moreover, organizations shall not follow a one-sided approach to understanding the market dynamics, but they shall talk to multiple relevant stakeholders for the purpose such as business partners and customers, and open innovation approach for better understanding.

Understand your strengths: An organization shall comprehend the main strengths that it can leverage to gain a competitive advantage. An organization may have its strengths emanating from its employees, financial resources, strategic locations, and differentiated products, among others.

Record the weaknesses of your business: Organization shall note the weaknesses that are likely to put it at disadvantage in the market such as lack of intellectual property and limited or no introduction of the products and services. The organization shall address the weakness raised during the SWOT analysis continuously after specific time intervals.

Note the potential opportunities: An organization needs to determine the external opportunities that it can undertake to pursue its growth strategy or to gain a competitive advantage. Organization shall not mix external opportunities with internal strengths; however, they can use their internal strengths to capture external opportunities.

Identify the threats to your business: An organization shall continuously monitor threats or problems that can influence its business or strategy to achieve competitive advantage or pursue double-digit growth. For instance, increased competition, and the rising cost of factors of production, among others.

Establish priorities from the SWOT: Once your organization has completed all the important stages of the SWOT analysis above, you can establish the overall picture of your business and identify what issues need to be addressed immediately. Does an organization also need to develop a strategy to address the issues identified during the SWOT such as how it can use its strengths to overcome identified external threats?[29]

After completing the above steps, an organization can use SWOT analysis combined with open innovation to develop strategies for achieving desired goals such as attaining double-digit growth. An organization can rely on the following steps for the said purpose:

Step 1: Create a list of all products and product lines that the company owns.

For this purpose, an organization should explain how many product lines are owned by the business and in each product line how many variants the company offers. For instance, Cargill, one of the world’s biggest agri-food companies, offers several industrial and consumer products. In consumer products, there are several product lines such as food and beverages, beauty, meat and poultry, animal nutrition, and supplements, among others. In its meat and poultry business, the company provides products related to chicken and sustainable beef.[30]

Step 2: Select and prioritize the products or product lines relevant to the analysis.

To achieve the objective, an organization needs to shortlist and prioritize the products or product lines that are relevant for the analysis or can facilitate the organization in its pursual to achieve double-digit growth. Here, the organization can decide which product line can help them to retain their customers or can help them to capture their competitors’ customers.

Step 3: Reflect on the vision and mission of the company.

An important step in the analysis is to reflect on the vision and mission of the company that the objective organization is intending to achieve shall match with the vision of the company. As swaying away from the vision of the company to pursue an uncharted territory could bring unfavorable consequences for the organization.

Step 4: Performing the SWOT analysis from the business point of view for the product.

After the shortlisting of the product aligned with the vision of the company, now the business can perform the SWOT analysis for the products that are likely to facilitate the business in achieving its objectives. Here a company needs to determine strengths and weaknesses that emanate from the shortlisted product lines such as offering different variants of the products to retain customers. Business also needs to consider external opportunities that they can tap from the products while addressing the threats from the competitors and market.

Step 5: Comparing the five lines of growth for the product line and creating multiple futuristic scenarios for the product (five years down the line)

After performing the SWOT analysis and identifying the possible growth opportunities, an agri-business SME can compare the opportunities with the five disciplines of growth. For instance, an organization can decide based on its strengths such as attractive products to enter the adjacent markets where it can leverage its existing capabilities and attain additional capabilities required to compete in the market. This way an organization can create multiple futuristic opportunities for achieving double-digit growth.

Step 6: Reflecting on the OI strategies that could apply to more scenarios.

Organizations can explore open innovation strategies that could be utilized to realize the scenarios that are explored during the earlier stages. For instance, Playsign company in Finland, with a vision to “Co-design by playing”, decided to shift its focus toward virtual platforms and games for urban planning. Playsign built on the open innovation strategy and collaborated with the customers, municipalities, and end-users to explore this opportunity.[31]

Step 7: Quantifying data and checking the feasibility of the OI strategy selected for the product line.

Organization shall dig deeper to understand the opportunity with the help of the data. For this purpose, efforts shall be made to understand measures with the help of quantifying data to check the suitability of the open innovation strategy shortlisted for the new products and services. For instance, an organization can collect data about competing or similar alternative products that are built using the open innovation strategy to see if the open innovation strategy is suitable for the product line.

Step 8: Communication the vision and the strategy

At this stage, clarity is needed and for this purpose, leaders need to communicate and reflect on the vision of the strategy to pursue the product line that fits with the objective of the company. The organization shall clearly communicate the objectives to all concerned stakeholders to achieve the desired goals.

Step 9: Planning, controlling, and setting up the realized vision.

In the penultima stage, better planning to complete the launch of the product line is needed and for this purpose, they need to better monitor and control the complete process. With effective planning and control, the organization can set up and realize the objectives in line with the vision of the company.

Step 10: Reinforcing and iterating the algorithm using market and customer data.

Finally, the organization needs to reinforce the project. Furthermore, to improve it is important to build on the market and customer data, this way, the organization can incorporate the changes in the products that are desired by the customers. Organization shall continue seeking feedback from the customers to continuously improve the product for better results. For instance, PlaySign was able to effectively implement and manage improvement in its business-to-business operations due to OI collaborations.³¹