Ingredion Incorporated SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

SWOT analysis is a vital strategic planning tool that can be used by Ingredion Incorporated managers to do a situational analysis of the company . It is a handy technique to map out the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Ingredion Incorporated is facing in its current business environment.

The Ingredion Incorporated is one of the leading firms in its industry. Ingredion Incorporated maintains its prominent 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 company such as – marketing, finance, operations, management information systems and strategic planning.


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The SWOT Analysis framework enables 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 called SWOT Matrix.

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

• SO (strengths-opportunities) Strategies
• WO (weaknesses-opportunities) Strategies
• ST (strengths-threats) Strategies
•  WT (weaknesses-threats) Strategies

SWOT Matrix Strategies Objective

The primary purpose of SWOT matrix is to identify the strategies that a company can utilize to exploit external opportunities, counter threats, and build on & protect Ingredion Incorporated strengths, and eradicate its weaknesses.

Step by Step Guide to Ingredion Incorporated SWOT Analysis

Strengths of Ingredion Incorporated – Internal Strategic Factors

As one of the leading companies in its industry, Ingredion Incorporated 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 Ingredion Incorporated are –

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• Highly skilled workforce through successful training and learning programs. Ingredion Incorporated is investing huge resources in training and development of its employees resulting in a workforce that is not only highly skilled but also motivated to achieve more.
• Strong distribution network – Over the years Ingredion Incorporated has built a reliable distribution network that can reach majority of its potential market.
• Successful track record of developing new products – product innovation.
• Good Returns on Capital Expenditure – Ingredion Incorporated is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
• Strong Free Cash Flow – Ingredion Incorporated has strong free cash flows that provide resources in the hand of the company to expand into new projects.
• Strong Brand Portfolio – Over the years Ingredion Incorporated has invested in building a strong brand portfolio. The SWOT analysis of Ingredion Incorporated just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
• 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.
• Automation of activities brought consistency of quality to Ingredion Incorporated products and has enabled the company to scale up and scale down based on the demand conditions in the market.

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Weakness of Ingredion Incorporated – Internal Strategic Factors

Weakness are the areas where Ingredion Incorporated can improve upon. Strategy is about making choices and weakness are the areas where a company can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

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• Investment in Research and Development is below the fastest growing players in the industry. Even though Ingredion Incorporated is spending above the industry average on Research and Development, it has not been able to compete with the leading players in the industry in terms of innovation. It has come across as a mature firm looking forward to bring out products based on tested features in the market.
• Limited success outside core business – Even though Ingredion Incorporated is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
• Organization structure is only compatible with present business model thus limiting expansion in adjacent product segments.
• High attrition rate in work force – compare to other organizations in the industry Ingredion Incorporated has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
• Not highly successful at integrating firms with different work culture. As mentioned earlier even though Ingredion Incorporated is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
• 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 Ingredion Incorporated is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
• The marketing of the products left a lot to be desired. Even though the product is a success in terms of sale but its positioning and unique selling proposition is not clearly defined which can lead to the attacks in this segment from the competitors.

Opportunities for Ingredion Incorporated – External Strategic Factors

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• 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 Ingredion Incorporated to drive home its advantage in new technology and gain market share in the new product category.
• Opening up of new markets because of government agreement – the adoption of new technology standard and government free trade agreement has provided Ingredion Incorporated an opportunity to enter a new emerging market.
• Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Ingredion Incorporated to capture new customers and increase its market share.
• The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Ingredion Incorporated to increase its profitability.
• The new technology provides an opportunity to Ingredion Incorporated to practices differentiated pricing strategy in the new market. It will enable the firm to maintain its loyal customers with great service and lure new customers through other value oriented propositions.
• Government green drive also opens an opportunity for procurement of Ingredion Incorporated products by the state as well as federal government contractors.
• Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Ingredion Incorporated.
• New trends in the consumer behavior can open up new market for the Ingredion Incorporated . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.

Threats Ingredion Incorporated Facing - External Strategic Factors

• Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Ingredion Incorporated   in those markets.
• Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Ingredion Incorporated
• Rising raw material can pose a threat to the Ingredion Incorporated profitability.
• Imitation of the counterfeit and low quality product is also a threat to Ingredion Incorporated’s product especially in the emerging markets and low income markets.
• Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
• 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.
• 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.
• The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.

Limitations of SWOT Analysis for Ingredion Incorporated

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 Ingredion Incorporated
• 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.

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Weighted SWOT Analysis of Ingredion Incorporated

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 Ingredion Incorporated 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 Ingredion Incorporated

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)