China Fortune (110) SWOT Analysis / TOWS Matrix / MBA Resources
Retail (Technology)
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for China Fortune (Hong Kong)
Based on various researches at Oak Spring University , China Fortune is operating in a macro-environment that has been destablized by – cloud computing is disrupting traditional business models, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, increasing household debt because of falling income levels,
banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that China Fortune can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the China Fortune, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which China Fortune 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 China Fortune can be done for the following purposes –
1. Strategic planning of China Fortune
2. Improving business portfolio management of China Fortune
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Retail (Technology) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of China Fortune
Strengths of China Fortune | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of China Fortune are -
Highly skilled collaborators
– China Fortune has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Retail (Technology) industry. Secondly the value chain collaborators of China Fortune have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– China Fortune is present in almost all the verticals within the Retail (Technology) industry. This has provided China Fortune a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Successful track record of launching new products
– China Fortune has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. China Fortune 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.
Superior customer experience
– The customer experience strategy of China Fortune in Retail (Technology) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- China Fortune is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at China Fortune is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at China Fortune emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– China Fortune has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – China Fortune staying ahead in the Retail (Technology) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Retail (Technology) industry
- digital transformation varies from industry to industry. For China Fortune digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. China Fortune 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.
Ability to lead change in Retail (Technology)
– China Fortune is one of the leading players in the Retail (Technology) industry in Hong Kong. Over the years it has not only transformed the business landscape in the Retail (Technology) industry in Hong Kong but also across the existing markets. The ability to lead change has enabled China Fortune in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– China Fortune 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 Retail (Technology) industry. The technology infrastructure of Hong Kong is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Operational resilience
– The operational resilience strategy of China Fortune comprises – understanding the underlying the factors in the Retail (Technology) industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Strong track record of project management in the Retail (Technology) industry
– China Fortune is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– China Fortune is one of the most innovative firm in Retail (Technology) sector.
Weaknesses of China Fortune | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of China Fortune are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, China Fortune is slow explore the new channels of communication. These new channels of communication can help China Fortune to provide better information regarding Retail (Technology) products and services. It can also build an online community to further reach out to potential customers.
Increasing silos among functional specialists
– The organizational structure of China Fortune is dominated by functional specialists. It is not different from other players in the Retail (Technology) industry, but China Fortune needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help China Fortune to focus more on services in the Retail (Technology) industry rather than just following the product oriented approach.
High dependence on China Fortune ‘s star products
– The top 2 products and services of China Fortune still accounts for major business revenue. This dependence on star products in Retail (Technology) industry has resulted into insufficient focus on developing new products, even though China Fortune has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, China Fortune 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.
Skills based hiring in Retail (Technology) industry
– The stress on hiring functional specialists at China Fortune has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High cash cycle compare to competitors
China Fortune has a high cash cycle compare to other players in the Retail (Technology) industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Ability to respond to the competition
– As the decision making is very deliberative at China Fortune, in the dynamic environment of Retail (Technology) industry it has struggled to respond to the nimble upstart competition. China Fortune has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of China Fortune supply chain. Even after few cautionary changes, China Fortune is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left China Fortune vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– From the 10K / annual statement of China Fortune, it seems that company is thinking out the frontier risks that can impact Retail (Technology) industry. 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.
High operating costs
– Compare to the competitors, China Fortune has high operating costs in the Retail (Technology) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract China Fortune lucrative customers.
Employees’ less understanding of China Fortune strategy
– From the outside it seems that the employees of China Fortune don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
China Fortune Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of China Fortune are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, China Fortune 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 China Fortune to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– China Fortune 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.
Buying journey improvements
– China Fortune can improve the customer journey of consumers in the Retail (Technology) industry by using analytics and artificial intelligence. It 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for China Fortune 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 China Fortune to hire the very best people irrespective of their geographical location.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. China Fortune can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Retail (Technology) industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. China Fortune can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. China Fortune can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
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 China Fortune 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects China Fortune can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for China Fortune in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Retail (Technology) industry, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at China Fortune 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 Retail (Technology) industry.
Better consumer reach
– The expansion of the 5G network will help China Fortune to increase its market reach. China Fortune will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Developing new processes and practices
– China Fortune can develop new processes and procedures in Retail (Technology) 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.
Use of Bitcoin and other crypto currencies for transactions in Retail (Technology) industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for China Fortune in the Retail (Technology) industry. Now China Fortune can target international markets with far fewer capital restrictions requirements than the existing system.
Threats China Fortune External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of China Fortune are -
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 China Fortune in the Retail (Technology) sector and impact the bottomline of the organization.
Increasing wage structure of China Fortune
– 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 China Fortune.
Regulatory challenges
– China Fortune 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 Retail (Technology) industry regulations.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of China Fortune business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– China Fortune 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.
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. China Fortune needs to understand the core reasons impacting the Retail (Technology) industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, China Fortune may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Retail (Technology) sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, China Fortune can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate China Fortune prominent markets.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. China Fortune will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of China Fortune.
Shortening product life cycle
– it is one of the major threat that China Fortune is facing in Retail (Technology) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for China Fortune in Retail (Technology) industry. The Retail (Technology) 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 China Fortune Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at China Fortune 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 China Fortune 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 China Fortune 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 China Fortune 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 China Fortune needs to make to build a sustainable competitive advantage.