Pinnacle Foods Inc. SWOT Analysis / Matrix

Business Essays, Term Papers & Research Papers

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

The Pinnacle Foods Inc. is one of the leading companies in its industry. Pinnacle Foods Inc. maintains its prominent position in market by critically analyzing and reviewing the SWOT analysis.  SWOT analysis a highly 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 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 called SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps the managers of the Pinnacle Foods Inc. 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 firm can utilize to exploit external opportunities, counter threats, and build on & protect Pinnacle Foods Inc. strengths, and eradicate its weaknesses.

Step by Step Guide to Pinnacle Foods Inc. SWOT Analysis

Strengths of Pinnacle Foods Inc. – Internal Strategic Factors

As one of the leading organizations in its industry, Pinnacle Foods Inc. 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 Pinnacle Foods Inc. are –

Read - Pinnacle Foods Inc. Porter 5 Forces Analysis & Industry Analysis
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• Strong distribution network – Over the years Pinnacle Foods Inc. has built a reliable distribution network that can reach majority of its potential market.
• Good Returns on Capital Expenditure – Pinnacle Foods Inc. is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.
• Strong Free Cash Flow – Pinnacle Foods Inc. has strong free cash flows that provide resources in the hand of the company to expand into new projects.
• 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.
• Reliable suppliers – It has a strong base of reliable supplier of raw material thus enabling the company to overcome any supply chain bottlenecks.
• Superb Performance in New Markets – Pinnacle Foods Inc. 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.
• 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.
• Successful track record of developing new products – product innovation.

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Weakness of Pinnacle Foods Inc. – Internal Strategic Factors

Weakness are the areas where Pinnacle Foods Inc. 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.

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• High attrition rate in work force – compare to other organizations in the industry Pinnacle Foods Inc. has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
• Days inventory is high compare to the competitors – making the company raise more capital to invest in the channel. This can impact the long term growth of Pinnacle Foods Inc.
• 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 Pinnacle Foods Inc. is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
• Investment in Research and Development is below the fastest growing players in the industry. Even though Pinnacle Foods Inc. 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.
• Not highly successful at integrating firms with different work culture. As mentioned earlier even though Pinnacle Foods Inc. is successful at integrating small companies it has its share of failure to merge firms that have different work culture.
• Limited success outside core business – Even though Pinnacle Foods Inc. is one of the leading organizations in its industry it has faced challenges in moving to other product segments with its present culture.
• Need more investment in new technologies. Given the scale of expansion and different geographies the company is planning to expand into, Pinnacle Foods Inc. needs to put more money in technology to integrate the processes across the board. Right now the investment in technologies is not at par with the vision of the company.

Opportunities for Pinnacle Foods Inc. – External Strategic Factors

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• The market development will lead to dilution of competitor’s advantage and enable Pinnacle Foods Inc. to increase its competitiveness compare to the other competitors.
• Lower inflation rate – The low inflation rate bring more stability in the market, enable credit at lower interest rate to the customers of Pinnacle Foods Inc..
• Organization’s core competencies can be a success in similar other products field. A comparative example could be - GE healthcare research helped it in developing better Oil drilling machines.
• Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Pinnacle Foods Inc. to capture new customers and increase its market share.
• New trends in the consumer behavior can open up new market for the Pinnacle Foods Inc. . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
• The new technology provides an opportunity to Pinnacle Foods Inc. 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.
• The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Pinnacle Foods Inc. to increase its profitability.
• 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 Pinnacle Foods Inc. to drive home its advantage in new technology and gain market share in the new product category.

Threats Pinnacle Foods Inc. Facing - External Strategic Factors

• Imitation of the counterfeit and low quality product is also a threat to Pinnacle Foods Inc.’s product especially in the emerging markets and low income 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.
• New technologies developed by the competitor or market disruptor could be a serious threat to the industry in medium to long term future.
• 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 .
• Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
• As the company is operating in numerous countries it is exposed to currency fluctuations especially given the volatile political climate in number of markets across the world.
• 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.

Limitations of SWOT Analysis for Pinnacle Foods Inc.

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 Pinnacle Foods Inc.
• 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 Pinnacle Foods Inc.

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 Pinnacle Foods Inc. 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 Pinnacle Foods Inc.

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)