Based on various researches at Oak Spring University , Dukang Distillers Holdings Ltd is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, increasing commodity prices, technology disruption, there is backlash against globalization, geopolitical disruptions,
central banks are concerned over increasing inflation, wage bills are increasing, etc
Introduction to SWOT Analysis of Dukang Distillers Holdings Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Dukang Distillers Holdings Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Dukang Distillers Holdings Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Dukang Distillers Holdings Ltd 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 Dukang Distillers Holdings Ltd can be done for the following purposes –
1. Strategic planning of Dukang Distillers Holdings Ltd
2. Improving business portfolio management of Dukang Distillers Holdings Ltd
3. Assessing feasibility of the new initiative in Singapore
4. Making a Beverages (Alcoholic) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Dukang Distillers Holdings Ltd
Strengths of Dukang Distillers Holdings Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Dukang Distillers Holdings Ltd are -
High switching costs
– The high switching costs that Dukang Distillers Holdings Ltd has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Ability to lead change in Beverages (Alcoholic)
– Dukang Distillers Holdings Ltd is one of the leading players in the Beverages (Alcoholic) industry in Singapore. Over the years it has not only transformed the business landscape in the Beverages (Alcoholic) industry in Singapore but also across the existing markets. The ability to lead change has enabled Dukang Distillers Holdings Ltd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Dukang Distillers Holdings Ltd is present in almost all the verticals within the Beverages (Alcoholic) industry. This has provided Dukang Distillers Holdings Ltd 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.
Low bargaining power of suppliers
– Suppliers of Dukang Distillers Holdings Ltd in the Consumer/Non-Cyclical sector have low bargaining power. Dukang Distillers Holdings Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Dukang Distillers Holdings Ltd to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Dukang Distillers Holdings Ltd
– The covid-19 pandemic has put organizational resilience at the centre of everthing Dukang Distillers Holdings Ltd does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Dukang Distillers Holdings Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Dukang Distillers Holdings Ltd staying ahead in the Beverages (Alcoholic) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Dukang Distillers Holdings Ltd has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Beverages (Alcoholic) industry. Secondly the value chain collaborators of Dukang Distillers Holdings Ltd have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Beverages (Alcoholic) industry
– Dukang Distillers Holdings Ltd has clearly differentiated products in the market place. This has enabled Dukang Distillers Holdings Ltd to fetch slight price premium compare to the competitors in the Beverages (Alcoholic) industry. The sustainable margins have also helped Dukang Distillers Holdings Ltd to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Dukang Distillers Holdings Ltd is one of the leading players in the Beverages (Alcoholic) industry in Singapore. It is in a position to attract the best talent available in Singapore. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Dukang Distillers Holdings Ltd has one of the best training and development program in Consumer/Non-Cyclical industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Cross disciplinary teams
– Horizontal connected teams at the Dukang Distillers Holdings Ltd 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.
Operational resilience
– The operational resilience strategy of Dukang Distillers Holdings Ltd comprises – understanding the underlying the factors in the Beverages (Alcoholic) 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.
Weaknesses of Dukang Distillers Holdings Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Dukang Distillers Holdings Ltd are -
Low market penetration in new markets
– Outside its home market of Singapore, Dukang Distillers Holdings Ltd needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Dukang Distillers Holdings Ltd is dominated by functional specialists. It is not different from other players in the Beverages (Alcoholic) industry, but Dukang Distillers Holdings Ltd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Dukang Distillers Holdings Ltd to focus more on services in the Beverages (Alcoholic) industry rather than just following the product oriented approach.
High dependence on Dukang Distillers Holdings Ltd ‘s star products
– The top 2 products and services of Dukang Distillers Holdings Ltd still accounts for major business revenue. This dependence on star products in Beverages (Alcoholic) industry has resulted into insufficient focus on developing new products, even though Dukang Distillers Holdings Ltd has relatively successful track record of launching new products.
No frontier risks strategy
– From the 10K / annual statement of Dukang Distillers Holdings Ltd, it seems that company is thinking out the frontier risks that can impact Beverages (Alcoholic) 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.
Workers concerns about automation
– As automation is fast increasing in the Beverages (Alcoholic) industry, Dukang Distillers Holdings Ltd 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 decision making process
– As mentioned earlier in the report, Dukang Distillers Holdings Ltd has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Beverages (Alcoholic) industry over the last five years. Dukang Distillers Holdings Ltd 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.
Interest costs
– Compare to the competition, Dukang Distillers Holdings Ltd 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.
Compensation and incentives
– The revenue per employee of Dukang Distillers Holdings Ltd is just above the Beverages (Alcoholic) industry average. It 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.
High cash cycle compare to competitors
Dukang Distillers Holdings Ltd has a high cash cycle compare to other players in the Beverages (Alcoholic) industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Aligning sales with marketing
– From the outside it seems that Dukang Distillers Holdings Ltd needs to have more collaboration between its sales team and marketing team. Sales professionals in the Beverages (Alcoholic) industry have deep experience in developing customer relationships. Marketing department at Dukang Distillers Holdings Ltd can leverage the sales team experience to cultivate customer relationships as Dukang Distillers Holdings Ltd is planning to shift buying processes online.
Products dominated business model
– Even though Dukang Distillers Holdings Ltd has some of the most successful models in the Beverages (Alcoholic) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Dukang Distillers Holdings Ltd should strive to include more intangible value offerings along with its core products and services.
Dukang Distillers Holdings Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Dukang Distillers Holdings Ltd are -
Learning at scale
– Online learning technologies has now opened space for Dukang Distillers Holdings Ltd to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Use of Bitcoin and other crypto currencies for transactions in Beverages (Alcoholic) industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Dukang Distillers Holdings Ltd in the Beverages (Alcoholic) industry. Now Dukang Distillers Holdings Ltd can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Dukang Distillers Holdings Ltd can use these opportunities to build new business models that can help the communities that Dukang Distillers Holdings Ltd operates in. Secondly it can use opportunities from government spending in Beverages (Alcoholic) sector.
Leveraging digital technologies
– Dukang Distillers Holdings Ltd 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.
Better consumer reach
– The expansion of the 5G network will help Dukang Distillers Holdings Ltd to increase its market reach. Dukang Distillers Holdings Ltd 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Dukang Distillers Holdings Ltd is facing challenges because of the dominance of functional experts in the organization. Dukang Distillers Holdings Ltd can utilize new technology in the field of Beverages (Alcoholic) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Using analytics as competitive advantage
– Dukang Distillers Holdings Ltd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Beverages (Alcoholic) sector. This continuous investment in analytics has enabled Dukang Distillers Holdings Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help Dukang Distillers Holdings Ltd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Dukang Distillers Holdings Ltd 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 Beverages (Alcoholic) industry.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Beverages (Alcoholic) industry, but it has also influenced the consumer preferences. Dukang Distillers Holdings Ltd 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 Dukang Distillers Holdings Ltd can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Dukang Distillers Holdings Ltd 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.
Developing new processes and practices
– Dukang Distillers Holdings Ltd can develop new processes and procedures in Beverages (Alcoholic) 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.
Loyalty marketing
– Dukang Distillers Holdings Ltd has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Threats Dukang Distillers Holdings Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Dukang Distillers Holdings Ltd are -
Increasing wage structure of Dukang Distillers Holdings Ltd
– 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 Dukang Distillers Holdings Ltd.
Technology acceleration in Forth Industrial Revolution
– Dukang Distillers Holdings Ltd has witnessed rapid integration of technology during Covid-19 in the Beverages (Alcoholic) industry. As one of the leading players in the industry, Dukang Distillers Holdings Ltd needs to keep up with the evolution of technology in the Beverages (Alcoholic) 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.
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 Dukang Distillers Holdings Ltd.
Shortening product life cycle
– it is one of the major threat that Dukang Distillers Holdings Ltd is facing in Beverages (Alcoholic) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Beverages (Alcoholic) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Dukang Distillers Holdings Ltd can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Beverages (Alcoholic) industry are lowering. It can presents Dukang Distillers Holdings Ltd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Beverages (Alcoholic) sector.
High dependence on third party suppliers
– Dukang Distillers Holdings Ltd 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.
Consumer confidence and its impact on Dukang Distillers Holdings Ltd 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 Beverages (Alcoholic) industry and other sectors.
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 Dukang Distillers Holdings Ltd in the Beverages (Alcoholic) sector and impact the bottomline of the organization.
Regulatory challenges
– Dukang Distillers Holdings Ltd 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 Beverages (Alcoholic) 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 Dukang Distillers Holdings Ltd business can come under increasing regulations regarding data privacy, data security, etc.
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. Dukang Distillers Holdings Ltd needs to understand the core reasons impacting the Beverages (Alcoholic) 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, Dukang Distillers Holdings Ltd may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Beverages (Alcoholic) sector.
Weighted SWOT Analysis of Dukang Distillers Holdings Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Dukang Distillers Holdings Ltd 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 Dukang Distillers Holdings Ltd 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 Dukang Distillers Holdings Ltd 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 Dukang Distillers Holdings Ltd 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 Dukang Distillers Holdings Ltd needs to make to build a sustainable competitive advantage.