Shanshan Enterprise: Reform Pioneer of China's Garment Industry SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Shanshan Enterprise: Reform Pioneer of China's Garment Industry
In 1989, the first enterprise to launch TV commercials for garments in Mainland China, Shanshan Enterprise, had caught the public's attention--and it remained in the spotlight ever since. Such attention was not merely the result of leading the development of the garment industry in China, but more a result of the company's many surprising moves that triggered heated debates. Highlights these debates and China's garment industry. Allows for a discussion on the future of China's fashion industries, brand management and multibrand strategies, distribution strategy, and diversification strategy. Exemplifies how a Chinese private company starts a business, the problems Chinese garment companies are facing, how to manage brand and distribution channels, and how to pursue a new profit point and conduct diversification.
Swot Analysis of "Shanshan Enterprise: Reform Pioneer of China's Garment Industry" written by Yigang Pan, Zhou Zemin includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Garment Shanshan facing as an external strategic factors. Some of the topics covered in Shanshan Enterprise: Reform Pioneer of China's Garment Industry case study are - Strategic Management Strategies, Risk management and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Shanshan Enterprise: Reform Pioneer of China's Garment Industry casestudy better are - – there is increasing trade war between United States & China, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, increasing energy prices,
increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Shanshan Enterprise: Reform Pioneer of China's Garment Industry
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Shanshan Enterprise: Reform Pioneer of China's Garment Industry case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Garment Shanshan, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Garment Shanshan operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Shanshan Enterprise: Reform Pioneer of China's Garment Industry can be done for the following purposes –
1. Strategic planning using facts provided in Shanshan Enterprise: Reform Pioneer of China's Garment Industry case study
2. Improving business portfolio management of Garment Shanshan
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Garment Shanshan
Strengths Shanshan Enterprise: Reform Pioneer of China's Garment Industry | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Garment Shanshan in Shanshan Enterprise: Reform Pioneer of China's Garment Industry Harvard Business Review case study are -
High brand equity
– Garment Shanshan has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Garment Shanshan to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Garment Shanshan has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Shanshan Enterprise: Reform Pioneer of China's Garment Industry HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Garment Shanshan
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Garment Shanshan does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Garment Shanshan has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Shanshan Enterprise: Reform Pioneer of China's Garment Industry - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Garment Shanshan in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Garment Shanshan has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Garment Shanshan has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Garment Shanshan digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Garment Shanshan has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Cross disciplinary teams
– Horizontal connected teams at the Garment Shanshan are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Analytics focus
– Garment Shanshan is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Yigang Pan, Zhou Zemin can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Sustainable margins compare to other players in Strategy & Execution industry
– Shanshan Enterprise: Reform Pioneer of China's Garment Industry firm has clearly differentiated products in the market place. This has enabled Garment Shanshan to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Garment Shanshan to invest into research and development (R&D) and innovation.
Training and development
– Garment Shanshan has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Shanshan Enterprise: Reform Pioneer of China's Garment Industry Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to recruit top talent
– Garment Shanshan is one of the leading recruiters in the industry. Managers in the Shanshan Enterprise: Reform Pioneer of China's Garment Industry are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Shanshan Enterprise: Reform Pioneer of China's Garment Industry | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shanshan Enterprise: Reform Pioneer of China's Garment Industry are -
High operating costs
– Compare to the competitors, firm in the HBR case study Shanshan Enterprise: Reform Pioneer of China's Garment Industry has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Garment Shanshan 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Garment Shanshan needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Garment Shanshan is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Shanshan Enterprise: Reform Pioneer of China's Garment Industry can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Shanshan Enterprise: Reform Pioneer of China's Garment Industry, is just above the industry average. Garment Shanshan needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Interest costs
– Compare to the competition, Garment Shanshan has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
No frontier risks strategy
– After analyzing the HBR case study Shanshan Enterprise: Reform Pioneer of China's Garment Industry, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Aligning sales with marketing
– It come across in the case study Shanshan Enterprise: Reform Pioneer of China's Garment Industry that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Shanshan Enterprise: Reform Pioneer of China's Garment Industry can leverage the sales team experience to cultivate customer relationships as Garment Shanshan is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, Yigang Pan, Zhou Zemin suggests that, Garment Shanshan is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Low market penetration in new markets
– Outside its home market of Garment Shanshan, firm in the HBR case study Shanshan Enterprise: Reform Pioneer of China's Garment Industry needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Garment Shanshan has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Garment Shanshan even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Increasing silos among functional specialists
– The organizational structure of Garment Shanshan is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Garment Shanshan needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Garment Shanshan to focus more on services rather than just following the product oriented approach.
Opportunities Shanshan Enterprise: Reform Pioneer of China's Garment Industry | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Shanshan Enterprise: Reform Pioneer of China's Garment Industry are -
Developing new processes and practices
– Garment Shanshan can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Garment Shanshan in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Garment Shanshan to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Garment Shanshan to hire the very best people irrespective of their geographical location.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Garment Shanshan can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Garment Shanshan can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Garment Shanshan can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Leveraging digital technologies
– Garment Shanshan can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Garment Shanshan to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Using analytics as competitive advantage
– Garment Shanshan has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Shanshan Enterprise: Reform Pioneer of China's Garment Industry - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Garment Shanshan to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Garment Shanshan can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Shanshan Enterprise: Reform Pioneer of China's Garment Industry suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Garment Shanshan in the consumer business. Now Garment Shanshan can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Garment Shanshan has opened avenues for new revenue streams for the organization in the industry. This can help Garment Shanshan to build a more holistic ecosystem as suggested in the Shanshan Enterprise: Reform Pioneer of China's Garment Industry case study. Garment Shanshan can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Garment Shanshan can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Shanshan Enterprise: Reform Pioneer of China's Garment Industry, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Shanshan Enterprise: Reform Pioneer of China's Garment Industry External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Shanshan Enterprise: Reform Pioneer of China's Garment Industry are -
Regulatory challenges
– Garment Shanshan needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Increasing wage structure of Garment Shanshan
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Garment Shanshan.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Stagnating economy with rate increase
– Garment Shanshan can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Shanshan Enterprise: Reform Pioneer of China's Garment Industry, Garment Shanshan may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Garment Shanshan in the Strategy & Execution sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Garment Shanshan can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Garment Shanshan demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Technology acceleration in Forth Industrial Revolution
– Garment Shanshan has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Garment Shanshan needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Garment Shanshan needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Garment Shanshan high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Garment Shanshan in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Weighted SWOT Analysis of Shanshan Enterprise: Reform Pioneer of China's Garment Industry Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Shanshan Enterprise: Reform Pioneer of China's Garment Industry needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Shanshan Enterprise: Reform Pioneer of China's Garment Industry is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Shanshan Enterprise: Reform Pioneer of China's Garment Industry is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Shanshan Enterprise: Reform Pioneer of China's Garment Industry is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Garment Shanshan needs to make to build a sustainable competitive advantage.