Yunnan Baiyao A (538) SWOT Analysis / TOWS Matrix / MBA Resources
Retail (Drugs)
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Yunnan Baiyao A (China)
Based on various researches at Oak Spring University , Yunnan Baiyao A is operating in a macro-environment that has been destablized by – challanges to central banks by blockchain based private currencies, increasing commodity prices, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, there is backlash against globalization,
technology disruption, cloud computing is disrupting traditional business models, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Yunnan Baiyao A can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Yunnan Baiyao A, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Yunnan Baiyao A 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 Yunnan Baiyao A can be done for the following purposes –
1. Strategic planning of Yunnan Baiyao A
2. Improving business portfolio management of Yunnan Baiyao A
3. Assessing feasibility of the new initiative in China
4. Making a Retail (Drugs) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Yunnan Baiyao A
Strengths of Yunnan Baiyao A | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Yunnan Baiyao A are -
Low bargaining power of suppliers
– Suppliers of Yunnan Baiyao A in the Services sector have low bargaining power. Yunnan Baiyao A has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Yunnan Baiyao A to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Retail (Drugs) industry
- digital transformation varies from industry to industry. For Yunnan Baiyao A digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Yunnan Baiyao A 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.
High switching costs
– The high switching costs that Yunnan Baiyao A 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.
Operational resilience
– The operational resilience strategy of Yunnan Baiyao A comprises – understanding the underlying the factors in the Retail (Drugs) 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.
Ability to recruit top talent
– Yunnan Baiyao A is one of the leading players in the Retail (Drugs) industry in China. It is in a position to attract the best talent available in China. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Yunnan Baiyao A has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Yunnan Baiyao A to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Yunnan Baiyao A 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 China 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.
Learning organization
- Yunnan Baiyao A 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 Yunnan Baiyao A is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Yunnan Baiyao A emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Retail (Drugs) industry
– Yunnan Baiyao A has clearly differentiated products in the market place. This has enabled Yunnan Baiyao A to fetch slight price premium compare to the competitors in the Retail (Drugs) industry. The sustainable margins have also helped Yunnan Baiyao A to invest into research and development (R&D) and innovation.
Ability to lead change in Retail (Drugs)
– Yunnan Baiyao A is one of the leading players in the Retail (Drugs) industry in China. Over the years it has not only transformed the business landscape in the Retail (Drugs) industry in China but also across the existing markets. The ability to lead change has enabled Yunnan Baiyao A in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Yunnan Baiyao A is one of the most innovative firm in Retail (Drugs) sector.
Cross disciplinary teams
– Horizontal connected teams at the Yunnan Baiyao A 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.
Weaknesses of Yunnan Baiyao A | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Yunnan Baiyao A are -
Products dominated business model
– Even though Yunnan Baiyao A has some of the most successful models in the Retail (Drugs) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Yunnan Baiyao A should strive to include more intangible value offerings along with its core products and services.
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 Yunnan Baiyao A supply chain. Even after few cautionary changes, Yunnan Baiyao A is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Yunnan Baiyao A vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Yunnan Baiyao A products
– To increase the profitability and margins on the products, Yunnan Baiyao A needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Yunnan Baiyao A 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. Yunnan Baiyao A 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.
Employees’ less understanding of Yunnan Baiyao A strategy
– From the outside it seems that the employees of Yunnan Baiyao A 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Yunnan Baiyao A is slow explore the new channels of communication. These new channels of communication can help Yunnan Baiyao A to provide better information regarding Retail (Drugs) products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Yunnan Baiyao A 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.
Ability to respond to the competition
– As the decision making is very deliberative at Yunnan Baiyao A, in the dynamic environment of Retail (Drugs) industry it has struggled to respond to the nimble upstart competition. Yunnan Baiyao A has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Yunnan Baiyao A 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 (Drugs) industry using digital technology.
No frontier risks strategy
– From the 10K / annual statement of Yunnan Baiyao A, 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.
High operating costs
– Compare to the competitors, Yunnan Baiyao A 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 Yunnan Baiyao A lucrative customers.
Yunnan Baiyao A Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Yunnan Baiyao A are -
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 Yunnan Baiyao A 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.
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. Yunnan Baiyao A can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Yunnan Baiyao A is facing challenges because of the dominance of functional experts in the organization. Yunnan Baiyao A can utilize new technology in the field of Retail (Drugs) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Use of Bitcoin and other crypto currencies for transactions in Retail (Drugs) industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Yunnan Baiyao A in the Retail (Drugs) industry. Now Yunnan Baiyao A can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Yunnan Baiyao A can use the latest technology developments to improve its manufacturing and designing process in Retail (Drugs) 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.
Learning at scale
– Online learning technologies has now opened space for Yunnan Baiyao A 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Yunnan Baiyao A can use these opportunities to build new business models that can help the communities that Yunnan Baiyao A operates in. Secondly it can use opportunities from government spending in Retail (Drugs) sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Yunnan Baiyao A 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 (Drugs) industry, and it will provide faster access to the consumers.
Developing new processes and practices
– Yunnan Baiyao A 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.
Building a culture of innovation
– managers at Yunnan Baiyao A 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Yunnan Baiyao A 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 Yunnan Baiyao A to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Yunnan Baiyao A can improve the customer journey of consumers in the Retail (Drugs) 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.
Leveraging digital technologies
– Yunnan Baiyao A 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.
Threats Yunnan Baiyao A External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Yunnan Baiyao A 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Yunnan Baiyao A 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.
Increasing wage structure of Yunnan Baiyao A
– 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 Yunnan Baiyao A.
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 Yunnan Baiyao A.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Yunnan Baiyao A needs to understand the core reasons impacting the Retail (Drugs) industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Retail (Drugs) industry are lowering. It can presents Yunnan Baiyao A with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Retail (Drugs) sector.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Yunnan Baiyao A 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.
Regulatory challenges
– Yunnan Baiyao A 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.
Easy access to finance
– Easy access to finance in Retail (Drugs) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Yunnan Baiyao A 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, Yunnan Baiyao A 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 (Drugs) sector.
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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Yunnan Baiyao A 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 Yunnan Baiyao A prominent markets.
High dependence on third party suppliers
– Yunnan Baiyao A 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 Yunnan Baiyao A Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Yunnan Baiyao A 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 Yunnan Baiyao A 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 Yunnan Baiyao A 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 Yunnan Baiyao A 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 Yunnan Baiyao A needs to make to build a sustainable competitive advantage.