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J.M. Smucker Company: The Internal Analysis

Executive Summary

Internal analysis of an organization helps the organization determine its internal strengths and weaknesses. The J.M. Smucker Company is the leading manufacturer and marketer of branded food products in Northern America. It manufactures ice cream toppings, fruit spreads, beverages, health and natural foods, natural peanut butter, and shortening. The economic value of the company is determined by the value of its assets that it uses to generate income. The company has tangible and intangible assets that determine its internal strengths and weaknesses. Tangible assets are those that the company uses in the form of goods and services. Intangible assets in the company cannot be touched but they greatly contribute to the profitability of the company. Goodwill is an example of a tangible asset. The capabilities in the company that help it increase its strengths and weaknesses are architecture, innovation and reputation. A combination of the tangible and the intangible resources in the company have helped increase the competitive advantage of the company.

Introduction

The internal analysis of an organization helps in the identification of an organization’s strengths and weaknesses. It determines how internal factors that affect an organization affect its performance and stability. The assets in the organization and the managerial abilities are the internal factors that greatly affect the profitability and performance of any organizations. Quality assets and managerial abilities increase the competitive advantage of an organization. The valuable inputs that an organization uses to increase its economic value are known as resources. They are divided into tangible and intangible resources. Tangible assets can be used by an organization in form of goods and services. Intangible resources are those that cannot be touched but contribute to the profitability of the organization. J.M. Smucker Company is a company that manufactures and markets branded food products in Northern America. It manufactures ice cream toppings, fruit spreads, beverages, health and natural foods, natural peanut butter, and shortening. This paper will seek to perform an internal analysis of the J.M. Smucker Company by analyzing the resources available to the company that determine its strengths and weaknesses.

Economic value of J.M Smucker Company

The economic value of J.M. Smucker Company is determined by the value of its assets that it uses to generate income. The total value of assets to the J.M Smucker Company estimates to over eight million U.S. dollars. These touch both tangible and intangible assets that are part of the company. The intangible assets occupy the largest proportion of the economic value of the company. These include resources that cannot be touched such as the managerial skills in the company. The organization also has many machines and automobiles that are used for the manufacture and distribution of the company’s products. These help the company to constantly feed the market without shortage and make the goods available throughout.

Tangible and Intangible Resources in the Company

Resources to the J.M. Smucker Companies are those valuable inputs that contribute to the economic value of the company. The company has tangible resources that are utilized in the form of goods and services in the company’s operations. The J.M. Smucker Company has plant and machinery that are used to manufacture the products that the company offers. The plant and machinery in the company are worth millions of dollars and are used for manufacturing, package, transport, and others (The J.M. Smucker Company, 2009, para.6). The products that they manufacture are the ones that are sold so that the company makes some profit. The company also has some buildings where the plant and machinery and other storage devices are fixed. The buildings prevent destruction of the equipment that is stored from external factors. Storage area defines the specific places where raw materials and finished goods are stored. Raw materials that wait processing need to be preserved so that they do not expire. The finished products that await distribution also need to be preserved. Expiry of the raw materials and finished products would mean a loss to the company. The company has specialized technology storage machines that preserve them for a long period of time.

The marketing management procedure has allowed the company to operate in several countries. The products to the company are today consumed in many countries allover the world. The company advertises its products in the media, using billboards, and others. As a strategy of making its products popular, the company conducts promotions to the consumers. The advertisements and promotions have helped the company expand its market a lot. The distribution channels that the company uses are very efficient. This ensures that the products are always available in the market. The company has a sufficient stock level of raw materials and manufactured products. This ensures that its products are always available. Sufficient cash in hand and at bank allows the company to perform effective operations.

The intangible human resources include the managerial capabilities of managers in the company and the skills of work force that the company employs (Susan & Randall, 2008, p.272). The managerial capabilities of the managers help the organization in that the management creates the best environment where work can be done. Motivation to employees increases the employees’ morale and eventually the output of each employee. Fair treatment of all employees and the good relationship between the management and the subordinate employees helps in development. The skills of the workforce help in consistent production of quality products. Goodwill is a characteristic of many employees in the company. This increases the reputation of the company in the markets where it performs its operations. Technical resources in the company have help in innovation of new products that suit the demands of the consumers. A combination of all the resources has helped the company to increase its competitive advantage over other competitors.

Capabilities in the J.M. Smucker Company

The inner capability that an organization possesses cannot be imitated. This inner capability is called distinctive capability. Goodwill and trademark are examples of distinctive capabilities. This capability helps increase the internal strength of an organization. There are three subdivisions of distinctive capability. These are architecture, innovation and reputation. The J.M. Smucker Company has these capabilities that help it increase its efficiency.

Architecture Capability

The links between the bodies that are involved in the operations of the organization are very good. The top management and the other members of staff have a good relationship and openly discuss issues regarding the company. The distributors of the company’s products have goods relationships with clients which help increase sales (Press Release, 2008, Para. 5). In general, the links between individuals and bodies inside and outside the company are good which increase the competitive advantage of the company.

Reputation Capability

The company has management and employees who have excellent skills in production of the products. The company therefore produces quality products that are distributed to the consumers. The consumers therefore experience the high quality of the products which creates a good reputation in their minds. They have the urge to consume more of the products and not others from other companies.

Innovation Capability

This is the capacity of the company to come with new ideas that can be used to produce innovative products and services. Innovations have helped the company come up with new products that meet the demands of the consumers. This has resulted in more consumption of the company’s products by consumers.

Conclusion

Performing an internal analysis of an organization helps the organization determine its strengths and weaknesses. The J.M. Smucker Company has high economic value that is determined by the value of its assets it uses to generate income. The company also has tangible and intangible resources that increase its competitive advantage. Reputation, innovation, and architecture capability have increased the internal strengths and weaknesses of the organization.

Reference

Press Release, (2008). J.M. Smucker Announces Stock Deal with P&G for Jif and Crisco. Web.

Susan, E. J. & Randall, S. S. (2008). Managing Human Resources. New York: Cengage Learning, 271-273.

The J.M. Smucker Company (2009). Company History. Web.

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