Berry Plastics Group SWOT Analysis / Matrix

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SWOT analysis is a strategic planning tool that can be used by Berry Plastics Group managers to do a situational analysis of the organization . It is a useful technique to analyze the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Berry Plastics Group is facing in its current business environment.

The Berry Plastics Group is one of the leading firms in its industry. Berry Plastics Group maintains its dominant position in market by critically analyzing and reviewing the SWOT analysis.  SWOT analysis an immensenly interactive process and requires effective coordination among various departments within the firm such as – marketing, finance, operations, management information systems and strategic planning.

The SWOT Analysis framework helps an organization to identify the internal strategic factors such as -strengths and weaknesses, & external strategic factors such as - opportunities and threats. It leads to a 2X2 matrix – also known as SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps the managers of the Berry Plastics Group to develop four types of strategies:

  • SO (strengths-opportunities) Strategies
  • WO (weaknesses-opportunities) Strategies
  • ST (strengths-threats) Strategies
  •  WT (weaknesses-threats) Strategies
Berry Plastics Group swot analysis / matrix

SWOT Matrix Strategies Objective

The core purpose of SWOT matrix is to identify the strategies that an organization can use to exploit external opportunities, counter threats, and build on & protect Berry Plastics Group strengths, and eradicate its weaknesses.

Step by Step Guide to Berry Plastics Group SWOT Analysis

Strengths of Berry Plastics Group – Internal Strategic Factors

As one of the leading firms in its industry, Berry Plastics Group has numerous strengths that help it to thrive in the market place. These strengths not only help it to protect the market share in existing markets but also help in penetrating new markets. Based on Fern Fort University extensive research – some of the strengths of Berry Plastics Group are –

  • Automation of activities brought consistency of quality to Berry Plastics Group products and has enabled the company to scale up and scale down based on the demand conditions in the market.
  • Superb Performance in New Markets – Berry Plastics Group has built expertise at entering new markets and making success of them. The expansion has helped the organization to build new revenue stream and diversify the economic cycle risk in the markets it operates in.
  • Highly successful at Go To Market strategies for its products.
  • Strong distribution network – Over the years Berry Plastics Group has built a reliable distribution network that can reach majority of its potential market.
  • High level of customer satisfaction – the company with its dedicated customer relationship management department has able to achieve a high level of customer satisfaction among present customers and good brand equity among the potential customers.
  • Good Returns on Capital Expenditure – Berry Plastics Group is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
  • Successful track record of developing new products – product innovation.
  • Successful track record of integrating complimentary firms through mergers & acquisition. It has successfully integrated number of technology companies in the past few years to streamline its operations and to build a reliable supply chain.

Weakness of Berry Plastics Group – Internal Strategic Factors

Weakness are the areas where Berry Plastics Group can improve upon. Strategy is about making choices and weakness are the areas where a firm can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

  • Financial planning is not done properly and efficiently. The current asset ratio and liquid asset ratios suggest that the company can use the cash more efficiently than what it is doing at present.
  • The company has not being able to tackle the challenges present by the new entrants in the segment and has lost small market share in the niche categories. Berry Plastics Group has to build internal feedback mechanism directly from sales team on ground to counter these challenges.
  • Not very good at product demand forecasting leading to higher rate of missed opportunities compare to its competitors. One of the reason why the days inventory is high compare to its competitors is that Berry Plastics Group is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
  • There are gaps in the product range sold by the company. This lack of choice can give a new competitor a foothold in the market.
  • Not highly successful at integrating firms with different work culture. As mentioned earlier even though Berry Plastics Group is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
  • The profitability ratio and Net Contribution % of Berry Plastics Group are below the industry average.
  • High attrition rate in work force – compare to other organizations in the industry Berry Plastics Group has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.

Opportunities for Berry Plastics Group – External Strategic Factors

  • Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Berry Plastics Group’s products thus providing an opportunity to the company - either to boost its profitability or pass on the benefits to the customers to gain market share.
  • Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Berry Plastics Group to capture new customers and increase its market share.
  • Stable free cash flow provides opportunities to invest in adjacent product segments. With more cash in bank the company can invest in new technologies as well as in new products segments. This should open a window of opportunity for Berry Plastics Group in other product categories.
  • Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Berry Plastics Group.
  • New environmental policies – The new opportunities will create a level playing field for all the players in the industry. It represent a great opportunity for Berry Plastics Group to drive home its advantage in new technology and gain market share in the new product category.
  • The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Berry Plastics Group to increase its profitability.
  • The market development will lead to dilution of competitor’s advantage and enable Berry Plastics Group to increase its competitiveness compare to the other competitors.
  • Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Berry Plastics Group an opportunity to enter a new emerging market.

Threats Berry Plastics Group Facing - External Strategic Factors

  • Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Berry Plastics Group
  • Intense competition – Stable profitability has increased the number of players in the industry over last two years which has put downward pressure on not only profitability but also on overall sales.
  • Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
  • No regular supply of innovative products – Over the years the company has developed numerous products but those are often response to the development by other players. Secondly the supply of new products is not regular thus leading to high and low swings in the sales number over period of time.
  • New environment regulations under Paris agreement (2016) could be a threat to certain existing product categories .
  • Changing consumer buying behavior from online channel could be a threat to the existing physical infrastructure driven supply chain model.
  • The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
  • The demand of the highly profitable products is seasonal in nature and any unlikely event during the peak season may impact the profitability of the company in short to medium term.

Limitations of SWOT Analysis for Berry Plastics Group

Although the SWOT analysis is widely used as a strategic planning tool, the analysis does have its share of limitations.

  • Certain capabilities or factors of an organization can be both a strength and weakness at the same time. This is one of the major limitations of SWOT analysis . For example changing environmental regulations can be both a threat to company it can also be an opportunity in a sense that it will enable the company to be on a level playing field or at advantage to competitors if it able to develop the products faster than the competitors.
  • SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself.
  • The matrix is only a starting point for a discussion on how proposed strategies could be implemented. It provided an evaluation window but not an implementation plan based on strategic competitiveness of Berry Plastics Group
  • SWOT is a static assessment - analysis of status quo with few prospective changes. As circumstances, capabilities, threats, and strategies change, the dynamics of a competitive environment may not be revealed in a single matrix.
  • SWOT analysis may lead the firm to overemphasize a single internal or external factor in formulating strategies. There are interrelationships among the key internal and external factors that SWOT does not reveal that may be important in devising strategies.

Weighted SWOT Analysis of Berry Plastics Group

In light of the above mentioned limitations of the SWOT analysis / matrix, corporate managers decided to provide weightage to each internal strength and weakness of the firm. Organizations also assess the likelihood of events taking place in the coming future and how strong their impact could be on company's performance.

This method is called Weighted SWOT analysis. It is better than doing simplistic SWOT analysis because with Weighted SWOT Analysis Berry Plastics Group managers can focus on the most critical factors and discount the non-important one. It also solves the long list problem where organizations ends up making a long list but none of the factors deemed too critical.

Limitation of Weighted SWOT analysis of Berry Plastics Group

This approach also suffers from one major drawback - it focus on individual importance of factor rather than how they are collectively important and impact the business holistically.

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Example of Weighted SWOT Analysis

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SWOT Worksheet & Template

If you like to do your own SWOT analysis or want to make your own Weighted SWOT SWOT matrix then feel free to download Fern Fort University SWOT Analysis Template.

References / Citations & Bibliography

  • M. E. Porter, Competitive Strategy(New York: Free Press, 1980)
  • A. D. Chandler, Strategy and Structure (Cambridge, Mass.: MIT Press, 1962)
  • O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975);
  • L. Wrigley, Divisional Autonomy and Diversification (PhD, Harvard Business School, 1970)
  • R. E. White, Generic Business Strategies, Organizational Context and Performance: An Empirical Investigation, Strategic Management Journal7 (1986)