China Jo-Jo Drugstores (CJJD) SWOT Analysis / TOWS Matrix / MBA Resources
Retail (Drugs)
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for China Jo-Jo Drugstores (United States)
Based on various researches at Oak Spring University , China Jo-Jo Drugstores is operating in a macro-environment that has been destablized by – increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , there is backlash against globalization, central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing,
challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of China Jo-Jo Drugstores
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that China Jo-Jo Drugstores can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the China Jo-Jo Drugstores, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which China Jo-Jo Drugstores 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 China Jo-Jo Drugstores can be done for the following purposes –
1. Strategic planning of China Jo-Jo Drugstores
2. Improving business portfolio management of China Jo-Jo Drugstores
3. Assessing feasibility of the new initiative in United States
4. Making a Retail (Drugs) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of China Jo-Jo Drugstores
Strengths of China Jo-Jo Drugstores | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of China Jo-Jo Drugstores are -
Ability to lead change in Retail (Drugs)
– China Jo-Jo Drugstores is one of the leading players in the Retail (Drugs) industry in United States. Over the years it has not only transformed the business landscape in the Retail (Drugs) industry in United States but also across the existing markets. The ability to lead change has enabled China Jo-Jo Drugstores in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– China Jo-Jo Drugstores is one of the leading players in the Retail (Drugs) 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.
Sustainable margins compare to other players in Retail (Drugs) industry
– China Jo-Jo Drugstores has clearly differentiated products in the market place. This has enabled China Jo-Jo Drugstores to fetch slight price premium compare to the competitors in the Retail (Drugs) industry. The sustainable margins have also helped China Jo-Jo Drugstores to invest into research and development (R&D) and innovation.
Learning organization
- China Jo-Jo Drugstores 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 China Jo-Jo Drugstores is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at China Jo-Jo Drugstores emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– China Jo-Jo Drugstores has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Retail (Drugs) industry. Secondly the value chain collaborators of China Jo-Jo Drugstores have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the China Jo-Jo Drugstores 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.
Training and development
– China Jo-Jo Drugstores 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.
Organizational Resilience of China Jo-Jo Drugstores
– The covid-19 pandemic has put organizational resilience at the centre of everthing China Jo-Jo Drugstores does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– China Jo-Jo Drugstores 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 (Drugs) 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.
High brand equity
– China Jo-Jo Drugstores has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled China Jo-Jo Drugstores to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– China Jo-Jo Drugstores has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – China Jo-Jo Drugstores staying ahead in the Retail (Drugs) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Retail (Drugs) industry
- digital transformation varies from industry to industry. For China Jo-Jo Drugstores digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. China Jo-Jo Drugstores 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.
Weaknesses of China Jo-Jo Drugstores | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of China Jo-Jo Drugstores are -
High bargaining power of channel partners in Retail (Drugs) industry
– because of the regulatory requirements in United States, China Jo-Jo Drugstores 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 (Drugs) industry.
Employees’ less understanding of China Jo-Jo Drugstores strategy
– From the outside it seems that the employees of China Jo-Jo Drugstores 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.
No frontier risks strategy
– From the 10K / annual statement of China Jo-Jo Drugstores, it seems that company is thinking out the frontier risks that can impact Retail (Drugs) 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.
Increasing silos among functional specialists
– The organizational structure of China Jo-Jo Drugstores is dominated by functional specialists. It is not different from other players in the Retail (Drugs) industry, but China Jo-Jo Drugstores needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help China Jo-Jo Drugstores to focus more on services in the Retail (Drugs) 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, China Jo-Jo Drugstores is slow explore the new channels of communication. These new channels of communication can help China Jo-Jo Drugstores to provide better information regarding Retail (Drugs) products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee of China Jo-Jo Drugstores is just above the Retail (Drugs) 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 operating costs
– Compare to the competitors, China Jo-Jo Drugstores has high operating costs in the Retail (Drugs) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract China Jo-Jo Drugstores lucrative customers.
Lack of clear differentiation of China Jo-Jo Drugstores products
– To increase the profitability and margins on the products, China Jo-Jo Drugstores needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the Retail (Drugs) industry, China Jo-Jo Drugstores needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow decision making process
– As mentioned earlier in the report, China Jo-Jo Drugstores 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 (Drugs) industry over the last five years. China Jo-Jo Drugstores 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.
Need for greater diversity
– China Jo-Jo Drugstores 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.
China Jo-Jo Drugstores Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of China Jo-Jo Drugstores are -
Building a culture of innovation
– managers at China Jo-Jo Drugstores 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 (Drugs) industry.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Retail (Drugs) industry, but it has also influenced the consumer preferences. China Jo-Jo Drugstores can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 China Jo-Jo Drugstores 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, China Jo-Jo Drugstores can use these opportunities to build new business models that can help the communities that China Jo-Jo Drugstores operates in. Secondly it can use opportunities from government spending in Retail (Drugs) sector.
Better consumer reach
– The expansion of the 5G network will help China Jo-Jo Drugstores to increase its market reach. China Jo-Jo Drugstores 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, China Jo-Jo Drugstores 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.
Creating value in data economy
– The success of analytics program of China Jo-Jo Drugstores has opened avenues for new revenue streams for the organization in Retail (Drugs) industry. This can help China Jo-Jo Drugstores to build a more holistic ecosystem for China Jo-Jo Drugstores products in the Retail (Drugs) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– China Jo-Jo Drugstores 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.
Developing new processes and practices
– China Jo-Jo Drugstores can develop new processes and procedures in Retail (Drugs) 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, China Jo-Jo Drugstores 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 China Jo-Jo Drugstores to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for China Jo-Jo Drugstores 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 China Jo-Jo Drugstores to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– China Jo-Jo Drugstores has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Retail (Drugs) sector. This continuous investment in analytics has enabled China Jo-Jo Drugstores to build a competitive advantage using analytics. The analytics driven competitive advantage can help China Jo-Jo Drugstores to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects China Jo-Jo Drugstores can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats China Jo-Jo Drugstores External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of China Jo-Jo Drugstores are -
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, China Jo-Jo Drugstores 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 China Jo-Jo Drugstores prominent markets.
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 China Jo-Jo Drugstores in the Retail (Drugs) sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Retail (Drugs) industry are lowering. It can presents China Jo-Jo Drugstores with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Retail (Drugs) sector.
Environmental challenges
– China Jo-Jo Drugstores 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. China Jo-Jo Drugstores can take advantage of this fund but it will also bring new competitors in the Retail (Drugs) industry.
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 China Jo-Jo Drugstores business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– China Jo-Jo Drugstores 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 (Drugs) industry regulations.
Shortening product life cycle
– it is one of the major threat that China Jo-Jo Drugstores is facing in Retail (Drugs) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– China Jo-Jo Drugstores 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.
Stagnating economy with rate increase
– China Jo-Jo Drugstores 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 Retail (Drugs) industry.
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 China Jo-Jo Drugstores.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for China Jo-Jo Drugstores in Retail (Drugs) industry. The Retail (Drugs) 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.
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.
Weighted SWOT Analysis of China Jo-Jo Drugstores Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at China Jo-Jo Drugstores 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 China Jo-Jo Drugstores 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 China Jo-Jo Drugstores 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 China Jo-Jo Drugstores 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 China Jo-Jo Drugstores needs to make to build a sustainable competitive advantage.