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 – challanges to central banks by blockchain based private currencies, there is backlash against globalization, cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs,
competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , 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 -
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.
Innovation driven organization
– Chow Tai Fook Jewellery Group is one of the most innovative firm in sector.
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.
Ability to recruit top talent
– Chow Tai Fook Jewellery Group is one of the leading players in the industry in United States. It is in a position to attract the best talent available in United States. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Chow Tai Fook Jewellery Group has one of the best training and development program in 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.
Superior customer experience
– The customer experience strategy of Chow Tai Fook Jewellery Group in 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.
Low bargaining power of suppliers
– Suppliers of Chow Tai Fook Jewellery Group in the sector have low bargaining power. Chow Tai Fook Jewellery Group has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Chow Tai Fook Jewellery Group to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
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.
Ability to lead change in
– Chow Tai Fook Jewellery Group is one of the leading players in the industry in United States. Over the years it has not only transformed the business landscape in the industry in United States but also across the existing markets. The ability to lead change has enabled Chow Tai Fook Jewellery Group in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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 -
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.
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.
Need for greater diversity
– Chow Tai Fook Jewellery Group 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.
High operating costs
– Compare to the competitors, Chow Tai Fook Jewellery Group has high operating costs in the industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Chow Tai Fook Jewellery Group lucrative customers.
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.
Employees’ less understanding of Chow Tai Fook Jewellery Group strategy
– From the outside it seems that the employees of Chow Tai Fook Jewellery Group don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
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.
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.
Compensation and incentives
– The revenue per employee of Chow Tai Fook Jewellery Group is just above the 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 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.
High cash cycle compare to competitors
Chow Tai Fook Jewellery Group has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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 -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in 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.
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.
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.
Buying journey improvements
– Chow Tai Fook Jewellery Group can improve the customer journey of consumers in the 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.
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.
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.
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.
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.
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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Chow Tai Fook Jewellery Group 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. Chow Tai Fook Jewellery Group 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.
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.
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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Chow Tai Fook Jewellery Group can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 -
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.
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.
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.
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.
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 industry.
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 industry regulations.
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.
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 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to 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 sector.
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.
