Chow Tai Fook Jewellery Group (CJEWY) SWOT Analysis / TOWS Matrix / MBA Resources
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 – cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, technology disruption, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing,
central banks are concerned over increasing inflation, 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 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.
Operational resilience
– The operational resilience strategy of Chow Tai Fook Jewellery Group comprises – understanding the underlying the factors in the 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.
Sustainable margins compare to other players in 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 industry. The sustainable margins have also helped Chow Tai Fook Jewellery Group to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Chow Tai Fook Jewellery Group is present in almost all the verticals within the industry. This has provided Chow Tai Fook Jewellery Group 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.
Highly skilled collaborators
– Chow Tai Fook Jewellery Group has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive industry. Secondly the value chain collaborators of Chow Tai Fook Jewellery Group have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Chow Tai Fook Jewellery Group is one of the most innovative firm in sector.
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.
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.
Strong track record of project management in the 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.
Cross disciplinary teams
– Horizontal connected teams at the Chow Tai Fook Jewellery Group are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Analytics focus
– 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 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.
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 industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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 industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
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 industry using digital technology.
Skills based hiring in industry
– The stress on hiring functional specialists at Chow Tai Fook Jewellery Group 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.
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 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.
High dependence on Chow Tai Fook Jewellery Group ‘s star products
– The top 2 products and services of Chow Tai Fook Jewellery Group still accounts for major business revenue. This dependence on star products in industry has resulted into insufficient focus on developing new products, even though Chow Tai Fook Jewellery Group has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of United States, Chow Tai Fook Jewellery Group needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
Workers concerns about automation
– As automation is fast increasing in the 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.
Increasing silos among functional specialists
– The organizational structure of Chow Tai Fook Jewellery Group is dominated by functional specialists. It is not different from other players in the industry, but Chow Tai Fook Jewellery Group needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Chow Tai Fook Jewellery Group to focus more on services in the industry rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Chow Tai Fook Jewellery Group is slow explore the new channels of communication. These new channels of communication can help Chow Tai Fook Jewellery Group to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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 -
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.
Developing new processes and practices
– Chow Tai Fook Jewellery Group can develop new processes and procedures in 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.
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.
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.
Using analytics as competitive advantage
– Chow Tai Fook Jewellery Group has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in sector. This continuous investment in analytics has enabled Chow Tai Fook Jewellery Group to build a competitive advantage using analytics. The analytics driven competitive advantage can help Chow Tai Fook Jewellery Group to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
Manufacturing automation
– Chow Tai Fook Jewellery Group can use the latest technology developments to improve its manufacturing and designing process in sector. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Chow Tai Fook Jewellery Group 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 Chow Tai Fook Jewellery Group to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Chow Tai Fook Jewellery Group can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Chow Tai Fook Jewellery Group has opened avenues for new revenue streams for the organization in industry. This can help Chow Tai Fook Jewellery Group to build a more holistic ecosystem for Chow Tai Fook Jewellery Group products in the industry by providing – data insight services, data privacy related products, data based consulting services, etc.
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 industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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.
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 industry.
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 -
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.
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 industry. The 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.
Technology acceleration in Forth Industrial Revolution
– Chow Tai Fook Jewellery Group has witnessed rapid integration of technology during Covid-19 in the 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 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.
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 sector and impact the bottomline of the organization.
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 sector.
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 Chow Tai Fook Jewellery Group.
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 industry and other sectors.
Increasing wage structure of Chow Tai Fook Jewellery Group
– 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 Chow Tai Fook Jewellery Group.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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.
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. Chow Tai Fook Jewellery Group 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.
Stagnating economy with rate increase
– Chow Tai Fook Jewellery Group can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the industry.
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.
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.