assignment 1 - swot analysis in halal industry

8/10/2019 Assignment 1 - Swot Analysis in halal industry

1/10

ASSIGNMENT 1

SWOT Analysis in Halal

Industry in Malaysia

BTE 4220

SYED SHAH AREEB HUSSAIN

0824507


2/10


3/10

2

1. SWOT ANALYSIS

1.2.DEFINITION

SWOT is the acronym for Strengths, Weaknesses, Opportunities and Threats. It is an analytical

framework to help summarize in a quick and concise way the risk and opportunities for any

company across the value chain. The components of The SWOT analysis are described as

follows:

Strength: These are characteristics of the businesses, or project team that give it an

advantage over others

Weaknesses: These are the characteristics that place the team at a disadvantage relative to

others, and are also called limitations.

Opportunities: These are the external chances that can help improve performance in the

environment.

Threats: These are the external elements in the environment that could cause trouble for

the business or project.

1.3.STRUCTURE

The SWOT analysis consists of 4 major component Strengths (S), Weaknesses (W),

Opportunities (O), and Threats (T). These 4 components are grouped into two factors.

The internal factors pertain to the internal environment of the company. These are usually

classified as Strengths or Weaknesses.

The external factors pertain to external forces on the company. These are classified ar

Opportunities or Threats.


4/10

3

1.4.NEED FOR SWOT ANALYSIS

The SWOT analysis can prove helpful on more than one fronts. First and foremost it can be used

to increase the companys profits. However, the usefulness of SWOT analysis is not limited to

profit-seeking organizations. SWOT analysis can be used in any decision-making situation when

a desired objective has been defined. For example, SWOT analysis is often used by non-profit

organizations, governmental units and individuals as well.

Moreover, SWOT analysis may also be used in a pre-crisis planning and preventive crisis

management. During a viability survey, use of SWOT analysis can greatly help by creating

recommendations. Hence SWOT analysis can become one of the driving forces for the success of

any organization.

2. CONDUCTING SWOT ANALYSIS

Before performing the SWOT analysis, it is necessary to highlight the objectives for which the

SWOT analysis is being performed. This is because what may prove to be the strengths for one

objective may also prove to be the weaknesses of another and likewise for the opportunities and

threats. Hence one must clearly define the objectives before starting the SWOT analysis.

The main method to follow when conducting SWOT analysis maybe simply put into four steps

List external opportunities

List external threats

List internal strengths


5/10

4

List internal weaknesses

Once these steps are completed, a significant list of potential strategies are developed. Then the

impact of the different factors in the analysis is assessed and based on that a suitable strategy is

selected.

2.1.SWOT/TOWS MATRIX

After selecting the factors for each of the components of the SWOT, a matrix of these factors can

be constructed in order to develop the strategies that take into account the SWOT profile.

Table 2-

1: SWOT Analysis Matrix

OPPORTUNITIES THREATS

STRENGTHS S-O (Max-Max Strategy) S-T (Max-Min Strategy)

WEAKNESSES W-O (Min-Max Strategy) W-T (Min-Min Strategy)

Once the factors of each of the components are compared, the appropriate analysis to be

performed can be selected.

2.2.TYPES OF STRATEGIES

Based on the four components, there are four different strategies as given in the Table 2-1.

S-O: The Strengths-Opportunities strategies pursue opportunities that match the

companys strengths. These are the best strategies to employ. However, many firms may

not be in a position to do so. Companies will generally pursue one or several of the other

three strategies first to be able to supply the S-O strategies.


6/10

5

W-O: The Weaknesses-Opportunities strategies overcome weaknesses to pursue

opportunities. In this strategy the internal weaknesses are matched with external

opportunities. The main objective of this strategy is to minimize the weaknesses such that

full advantage of the opportunities can be taken.

S-T: The Strength-Threats strategies identify ways that the firm can use its strengths to

reduce its vulnerability to external threats. The different strengths are first matched to the

threats and then are used to minimize the threats.

W-T: The Weaknesses-Threats strategy establishes a defensive plan to prevent the firms

weaknesses from making it susceptible to external threats. In this strategy, the

weaknesses must be minimized in order to avoid the threats faced by the company.

3. SWOT ANALYSIS IN HALAL INDUSTRY IN MALAYSIA

Malaysia is a well-developed Modern Islamic country. It efficiently incorporates Islamic

principles into the modern world. One of the most important aspects is the development if the

Halal industry. Halal food industries hold especially crucial positions in the Malaysian food

industry as a very large number of consumers demand for halal food. Hence in this context

performing a SWOT analysis can prove very beneficial. For this reason in this study, a SWOT

analysis is performed wherein some of the evident factors of each of the components is listed.

3.1.STRENGTHS

Malaysia is considered worldwide as a modern Islamic country and hence has a good

Islamic image.


7/10

6

As compared to the certifications of other non-Muslim countries, the Malaysian Halal

Certification is considered more valid. This is because extensive research and analysis is

performed to ensure the halal nature of food in Malaysia.

As compared to the other ASEAN countries, the labour productivity in Malaysia is

comparatively higher.

Compared to other ASEAN countries, Malaysian products are also considered as more

safe and of better quality.

3.2.WEAKNESSES

Several problems are faced when dealing with Malaysian exporters. These include

Lack of professionalism

Lack of follow-up and correspondence

Very short-term perspective

SMI entrepreneurs lack legal/social/cultural environment in the importing countries

There is no consistent supply

Malaysia is not able to adapt to local flavors.

Inefficient Sea transport.

Branding unique to the country has not been established properly.

The packaging is not able to guarantee long shelf-life.

The cost of production is comparatively higher and Malaysian products are about 20%

more expensive.

There is a lack of strategic alliance (importers and distributors) and a lack of private

agents to market the products due to scarcity of entrepreneurial skills


8/10

7

Entrepreneurs do not have enough capital to effectively export their products.

Not able to identify consumer needs in terms of taste and preferences.

Almost all the local processed product type and categories do not follow market labeling

requirements.

Some of the ingredient list do not specify the percentage the ingredients, nutritional facts,

serving size, customer service information.

3.3.OPPORTUNITIES

60% of the Saudis consumers are youth (< 35 years) and thus indicating a growing

consumer markets and willing to try new products.

Saudis consumers have purchasing power.

GCC is a growing region. Average GCC (8%); Saudi Arabia (10%).

Rising costs of production in EU & USA.

Tourism industry in Malaysia contributes to developing awareness among Arab

consumers who have been to Malaysia.

Strong government supports for SME development in food processing

Strong government support in halal products and halal-hub center

3.4.THREATS

Stiff Competition of the Malaysian food products from Thailand, Indonesia and the

Philippines. The prices of the Malaysian products are generally higher due to the higher

production costs.

Subsidized tariffs for air transportation by Thailand.

Chinese products invading the markets, translated into cheaper prices.


9/10


10/10

assignment 1 - swot analysis in halal industry

Documents