Parkson Retail Asia Ltd (PRAL) SWOT Analysis / TOWS Matrix / MBA Resources
Retail (Department & Discount)
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Parkson Retail Asia Ltd (Singapore)
Based on various researches at Oak Spring University , Parkson Retail Asia Ltd is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, increasing energy prices, wage bills are increasing, technology disruption, increasing government debt because of Covid-19 spendings, increasing commodity prices,
challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Parkson Retail Asia Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Parkson Retail Asia Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Parkson Retail Asia Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Parkson Retail Asia 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 Parkson Retail Asia Ltd can be done for the following purposes –
1. Strategic planning of Parkson Retail Asia Ltd
2. Improving business portfolio management of Parkson Retail Asia Ltd
3. Assessing feasibility of the new initiative in Singapore
4. Making a Retail (Department & Discount) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Parkson Retail Asia Ltd
Strengths of Parkson Retail Asia Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Parkson Retail Asia Ltd are -
Ability to lead change in Retail (Department & Discount)
– Parkson Retail Asia Ltd is one of the leading players in the Retail (Department & Discount) industry in Singapore. Over the years it has not only transformed the business landscape in the Retail (Department & Discount) industry in Singapore but also across the existing markets. The ability to lead change has enabled Parkson Retail Asia Ltd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Parkson Retail Asia Ltd 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 Parkson Retail Asia Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Parkson Retail Asia Ltd emphasize – knowledge, initiative, and innovation.
Training and development
– Parkson Retail Asia Ltd has one of the best training and development program in Services 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.
Analytics focus
– Parkson Retail Asia Ltd 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 (Department & Discount) industry. The technology infrastructure of Singapore 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.
Effective Research and Development (R&D)
– Parkson Retail Asia Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Parkson Retail Asia Ltd staying ahead in the Retail (Department & Discount) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Parkson Retail Asia 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.
Strong track record of project management in the Retail (Department & Discount) industry
– Parkson Retail Asia Ltd is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Parkson Retail Asia 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.
Ability to recruit top talent
– Parkson Retail Asia Ltd is one of the leading players in the Retail (Department & Discount) 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.
Organizational Resilience of Parkson Retail Asia Ltd
– The covid-19 pandemic has put organizational resilience at the centre of everthing Parkson Retail Asia Ltd does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Parkson Retail Asia Ltd is one of the most innovative firm in Retail (Department & Discount) sector.
Sustainable margins compare to other players in Retail (Department & Discount) industry
– Parkson Retail Asia Ltd has clearly differentiated products in the market place. This has enabled Parkson Retail Asia Ltd to fetch slight price premium compare to the competitors in the Retail (Department & Discount) industry. The sustainable margins have also helped Parkson Retail Asia Ltd to invest into research and development (R&D) and innovation.
Weaknesses of Parkson Retail Asia Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Parkson Retail Asia Ltd are -
Aligning sales with marketing
– From the outside it seems that Parkson Retail Asia Ltd needs to have more collaboration between its sales team and marketing team. Sales professionals in the Retail (Department & Discount) industry have deep experience in developing customer relationships. Marketing department at Parkson Retail Asia Ltd can leverage the sales team experience to cultivate customer relationships as Parkson Retail Asia Ltd is planning to shift buying processes online.
Skills based hiring in Retail (Department & Discount) industry
– The stress on hiring functional specialists at Parkson Retail Asia Ltd 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.
Increasing silos among functional specialists
– The organizational structure of Parkson Retail Asia Ltd is dominated by functional specialists. It is not different from other players in the Retail (Department & Discount) industry, but Parkson Retail Asia Ltd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Parkson Retail Asia Ltd to focus more on services in the Retail (Department & Discount) industry rather than just following the product oriented approach.
Products dominated business model
– Even though Parkson Retail Asia Ltd has some of the most successful models in the Retail (Department & Discount) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Parkson Retail Asia Ltd should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Parkson Retail Asia Ltd has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Ability to respond to the competition
– As the decision making is very deliberative at Parkson Retail Asia Ltd, in the dynamic environment of Retail (Department & Discount) industry it has struggled to respond to the nimble upstart competition. Parkson Retail Asia Ltd has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on Parkson Retail Asia Ltd ‘s star products
– The top 2 products and services of Parkson Retail Asia Ltd still accounts for major business revenue. This dependence on star products in Retail (Department & Discount) industry has resulted into insufficient focus on developing new products, even though Parkson Retail Asia Ltd has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Singapore, Parkson Retail Asia Ltd needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, Parkson Retail Asia Ltd has high operating costs in the Retail (Department & Discount) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Parkson Retail Asia Ltd lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Parkson Retail Asia 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 Retail (Department & Discount) industry over the last five years. Parkson Retail Asia 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.
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 Parkson Retail Asia Ltd supply chain. Even after few cautionary changes, Parkson Retail Asia Ltd is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Parkson Retail Asia Ltd vulnerable to further global disruptions in South East Asia.
Parkson Retail Asia Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Parkson Retail Asia Ltd are -
Better consumer reach
– The expansion of the 5G network will help Parkson Retail Asia Ltd to increase its market reach. Parkson Retail Asia 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Retail (Department & Discount) industry, but it has also influenced the consumer preferences. Parkson Retail Asia Ltd can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Parkson Retail Asia Ltd 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 Parkson Retail Asia Ltd to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Use of Bitcoin and other crypto currencies for transactions in Retail (Department & Discount) industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Parkson Retail Asia Ltd in the Retail (Department & Discount) industry. Now Parkson Retail Asia Ltd can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Parkson Retail Asia Ltd 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 (Department & Discount) industry, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at Parkson Retail Asia 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 Retail (Department & Discount) industry.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Retail (Department & Discount) industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Parkson Retail Asia Ltd 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. Parkson Retail Asia Ltd 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.
Creating value in data economy
– The success of analytics program of Parkson Retail Asia Ltd has opened avenues for new revenue streams for the organization in Retail (Department & Discount) industry. This can help Parkson Retail Asia Ltd to build a more holistic ecosystem for Parkson Retail Asia Ltd products in the Retail (Department & Discount) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Parkson Retail Asia Ltd 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 Parkson Retail Asia Ltd to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Parkson Retail Asia Ltd can improve the customer journey of consumers in the Retail (Department & Discount) 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.
Developing new processes and practices
– Parkson Retail Asia Ltd can develop new processes and procedures in Retail (Department & Discount) 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.
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 Parkson Retail Asia 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Parkson Retail Asia Ltd can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Threats Parkson Retail Asia Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Parkson Retail Asia Ltd are -
Regulatory challenges
– Parkson Retail Asia 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 Retail (Department & Discount) industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Retail (Department & Discount) industry are lowering. It can presents Parkson Retail Asia Ltd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Retail (Department & Discount) sector.
Technology acceleration in Forth Industrial Revolution
– Parkson Retail Asia Ltd has witnessed rapid integration of technology during Covid-19 in the Retail (Department & Discount) industry. As one of the leading players in the industry, Parkson Retail Asia Ltd needs to keep up with the evolution of technology in the Retail (Department & Discount) 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 Parkson Retail Asia Ltd.
Increasing wage structure of Parkson Retail Asia 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 Parkson Retail Asia Ltd.
Easy access to finance
– Easy access to finance in Retail (Department & Discount) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Parkson Retail Asia Ltd can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Parkson Retail Asia 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 Retail (Department & Discount) sector.
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. Parkson Retail Asia Ltd 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.
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 Parkson Retail Asia Ltd business can come under increasing regulations regarding data privacy, data security, etc.
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.
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 Parkson Retail Asia Ltd in the Retail (Department & Discount) sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Parkson Retail Asia 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Parkson Retail Asia Ltd in Retail (Department & Discount) industry. The Retail (Department & Discount) 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 Parkson Retail Asia Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Parkson Retail Asia 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 Parkson Retail Asia 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 Parkson Retail Asia 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 Parkson Retail Asia 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 Parkson Retail Asia Ltd needs to make to build a sustainable competitive advantage.