Chow Tai Fook Jewellery Group (CJEWF) SWOT Analysis / TOWS Matrix / MBA Resources
Retail (Specialty)
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Chow Tai Fook Jewellery Group (United States)
Based on various researches at Oak Spring University , Chow Tai Fook Jewellery Group is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, increasing energy prices, increasing government debt because of Covid-19 spendings, geopolitical disruptions, technology disruption,
cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Chow Tai Fook Jewellery Group
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Chow Tai Fook Jewellery Group can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Chow Tai Fook Jewellery Group, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Chow Tai Fook Jewellery Group 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 Chow Tai Fook Jewellery Group can be done for the following purposes –
1. Strategic planning of Chow Tai Fook Jewellery Group
2. Improving business portfolio management of Chow Tai Fook Jewellery Group
3. Assessing feasibility of the new initiative in United States
4. Making a Retail (Specialty) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Chow Tai Fook Jewellery Group
Strengths of Chow Tai Fook Jewellery Group | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Chow Tai Fook Jewellery Group are -
Organizational Resilience of Chow Tai Fook Jewellery Group
– The covid-19 pandemic has put organizational resilience at the centre of everthing Chow Tai Fook Jewellery Group does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Chow Tai Fook Jewellery Group 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 (Specialty) industry. The technology infrastructure of United States 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.
Training and development
– Chow Tai Fook Jewellery Group 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.
Sustainable margins compare to other players in Retail (Specialty) industry
– Chow Tai Fook Jewellery Group has clearly differentiated products in the market place. This has enabled Chow Tai Fook Jewellery Group to fetch slight price premium compare to the competitors in the Retail (Specialty) industry. The sustainable margins have also helped Chow Tai Fook Jewellery Group to invest into research and development (R&D) and innovation.
High brand equity
– Chow Tai Fook Jewellery Group has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Chow Tai Fook Jewellery Group to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management in the Retail (Specialty) industry
– Chow Tai Fook Jewellery Group is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Chow Tai Fook Jewellery Group in Retail (Specialty) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Chow Tai Fook Jewellery Group 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.
Digital Transformation in Retail (Specialty) industry
- digital transformation varies from industry to industry. For Chow Tai Fook Jewellery Group digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Chow Tai Fook Jewellery Group 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.
Learning organization
- Chow Tai Fook Jewellery Group 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 Chow Tai Fook Jewellery Group is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Chow Tai Fook Jewellery Group emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Chow Tai Fook Jewellery Group has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Chow Tai Fook Jewellery Group staying ahead in the Retail (Specialty) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Chow Tai Fook Jewellery Group is one of the most innovative firm in Retail (Specialty) sector.
Weaknesses of Chow Tai Fook Jewellery Group | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Chow Tai Fook Jewellery Group are -
Slow to strategic competitive environment developments
– As Chow Tai Fook Jewellery Group is one of the leading players in the Retail (Specialty) industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Retail (Specialty) industry in last five years.
Slow decision making process
– As mentioned earlier in the report, Chow Tai Fook Jewellery Group 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 (Specialty) industry over the last five years. Chow Tai Fook Jewellery Group 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.
Lack of clear differentiation of Chow Tai Fook Jewellery Group products
– To increase the profitability and margins on the products, Chow Tai Fook Jewellery Group needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Chow Tai Fook Jewellery Group supply chain. Even after few cautionary changes, Chow Tai Fook Jewellery Group is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Chow Tai Fook Jewellery Group vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Chow Tai Fook Jewellery Group 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.
Capital Spending Reduction
– Even during the low interest decade, Chow Tai Fook Jewellery Group has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Retail (Specialty) industry using digital technology.
Ability to respond to the competition
– As the decision making is very deliberative at Chow Tai Fook Jewellery Group, in the dynamic environment of Retail (Specialty) industry it has struggled to respond to the nimble upstart competition. Chow Tai Fook Jewellery Group has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– From the 10K / annual statement of Chow Tai Fook Jewellery Group, it seems that company is thinking out the frontier risks that can impact Retail (Specialty) 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.
Aligning sales with marketing
– From the outside it seems that Chow Tai Fook Jewellery Group needs to have more collaboration between its sales team and marketing team. Sales professionals in the Retail (Specialty) industry have deep experience in developing customer relationships. Marketing department at Chow Tai Fook Jewellery Group can leverage the sales team experience to cultivate customer relationships as Chow Tai Fook Jewellery Group is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the Retail (Specialty) industry, Chow Tai Fook Jewellery Group 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.
High bargaining power of channel partners in Retail (Specialty) industry
– because of the regulatory requirements in United States, Chow Tai Fook Jewellery Group 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 Retail (Specialty) industry.
Chow Tai Fook Jewellery Group Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Chow Tai Fook Jewellery Group are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Chow Tai Fook Jewellery Group 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Chow Tai Fook Jewellery Group 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 Chow Tai Fook Jewellery Group to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Chow Tai Fook Jewellery Group 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 (Specialty) industry, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Chow Tai Fook Jewellery Group can use these opportunities to build new business models that can help the communities that Chow Tai Fook Jewellery Group operates in. Secondly it can use opportunities from government spending in Retail (Specialty) sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Chow Tai Fook Jewellery Group is facing challenges because of the dominance of functional experts in the organization. Chow Tai Fook Jewellery Group can utilize new technology in the field of Retail (Specialty) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Loyalty marketing
– Chow Tai Fook Jewellery Group 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.
Better consumer reach
– The expansion of the 5G network will help Chow Tai Fook Jewellery Group to increase its market reach. Chow Tai Fook Jewellery Group 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.
Leveraging digital technologies
– Chow Tai Fook Jewellery Group 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.
Building a culture of innovation
– managers at Chow Tai Fook Jewellery Group 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 (Specialty) industry.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Retail (Specialty) industry, but it has also influenced the consumer preferences. Chow Tai Fook Jewellery Group can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Chow Tai Fook Jewellery Group 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.
Developing new processes and practices
– Chow Tai Fook Jewellery Group can develop new processes and procedures in Retail (Specialty) 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 Chow Tai Fook Jewellery Group 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.
Threats Chow Tai Fook Jewellery Group External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Chow Tai Fook Jewellery Group are -
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 Chow Tai Fook Jewellery Group business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Chow Tai Fook Jewellery Group 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 Retail (Specialty) industry and other sectors.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Chow Tai Fook Jewellery Group 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 Chow Tai Fook Jewellery Group prominent markets.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Retail (Specialty) industry are lowering. It can presents Chow Tai Fook Jewellery Group with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Retail (Specialty) sector.
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 Chow Tai Fook Jewellery Group in the Retail (Specialty) sector and impact the bottomline of the organization.
Regulatory challenges
– Chow Tai Fook Jewellery Group 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 (Specialty) industry regulations.
High dependence on third party suppliers
– Chow Tai Fook Jewellery Group 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.
Easy access to finance
– Easy access to finance in Retail (Specialty) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Chow Tai Fook Jewellery Group 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, Chow Tai Fook Jewellery Group 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 (Specialty) sector.
Technology acceleration in Forth Industrial Revolution
– Chow Tai Fook Jewellery Group has witnessed rapid integration of technology during Covid-19 in the Retail (Specialty) industry. As one of the leading players in the industry, Chow Tai Fook Jewellery Group needs to keep up with the evolution of technology in the Retail (Specialty) 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Chow Tai Fook Jewellery Group in Retail (Specialty) industry. The Retail (Specialty) 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.
Environmental challenges
– Chow Tai Fook Jewellery Group needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Chow Tai Fook Jewellery Group can take advantage of this fund but it will also bring new competitors in the Retail (Specialty) industry.
Shortening product life cycle
– it is one of the major threat that Chow Tai Fook Jewellery Group is facing in Retail (Specialty) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Chow Tai Fook Jewellery Group Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Chow Tai Fook Jewellery Group 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 Chow Tai Fook Jewellery Group 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 Chow Tai Fook Jewellery Group 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 Chow Tai Fook Jewellery Group 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 Chow Tai Fook Jewellery Group needs to make to build a sustainable competitive advantage.