Based on various researches at Oak Spring University , Shanxi Xinghuacun Fen Wine is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies,
geopolitical disruptions, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Shanxi Xinghuacun Fen Wine
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Shanxi Xinghuacun Fen Wine can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shanxi Xinghuacun Fen Wine, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shanxi Xinghuacun Fen Wine 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 Shanxi Xinghuacun Fen Wine can be done for the following purposes –
1. Strategic planning of Shanxi Xinghuacun Fen Wine
2. Improving business portfolio management of Shanxi Xinghuacun Fen Wine
3. Assessing feasibility of the new initiative in China
4. Making a Beverages (Alcoholic) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Shanxi Xinghuacun Fen Wine
Strengths of Shanxi Xinghuacun Fen Wine | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shanxi Xinghuacun Fen Wine are -
Organizational Resilience of Shanxi Xinghuacun Fen Wine
– The covid-19 pandemic has put organizational resilience at the centre of everthing Shanxi Xinghuacun Fen Wine does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Shanxi Xinghuacun Fen Wine has one of the best training and development program in Consumer/Non-Cyclical 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.
Ability to recruit top talent
– Shanxi Xinghuacun Fen Wine is one of the leading players in the Beverages (Alcoholic) 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.
Low bargaining power of suppliers
– Suppliers of Shanxi Xinghuacun Fen Wine in the Consumer/Non-Cyclical sector have low bargaining power. Shanxi Xinghuacun Fen Wine has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shanxi Xinghuacun Fen Wine to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Shanxi Xinghuacun Fen Wine has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Shanxi Xinghuacun Fen Wine to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Shanxi Xinghuacun Fen Wine 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 Beverages (Alcoholic) 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.
Superior customer experience
– The customer experience strategy of Shanxi Xinghuacun Fen Wine in Beverages (Alcoholic) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Shanxi Xinghuacun Fen Wine is present in almost all the verticals within the Beverages (Alcoholic) industry. This has provided Shanxi Xinghuacun Fen Wine 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
– Shanxi Xinghuacun Fen Wine has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Beverages (Alcoholic) industry. Secondly the value chain collaborators of Shanxi Xinghuacun Fen Wine have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Shanxi Xinghuacun Fen Wine 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.
Learning organization
- Shanxi Xinghuacun Fen Wine 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 Shanxi Xinghuacun Fen Wine is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Shanxi Xinghuacun Fen Wine emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Shanxi Xinghuacun Fen Wine has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Shanxi Xinghuacun Fen Wine has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Weaknesses of Shanxi Xinghuacun Fen Wine | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shanxi Xinghuacun Fen Wine are -
No frontier risks strategy
– From the 10K / annual statement of Shanxi Xinghuacun Fen Wine, it seems that company is thinking out the frontier risks that can impact Beverages (Alcoholic) 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 bargaining power of channel partners in Beverages (Alcoholic) industry
– because of the regulatory requirements in China, Shanxi Xinghuacun Fen Wine 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 Beverages (Alcoholic) industry.
Skills based hiring in Beverages (Alcoholic) industry
– The stress on hiring functional specialists at Shanxi Xinghuacun Fen Wine 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.
High dependence on Shanxi Xinghuacun Fen Wine ‘s star products
– The top 2 products and services of Shanxi Xinghuacun Fen Wine still accounts for major business revenue. This dependence on star products in Beverages (Alcoholic) industry has resulted into insufficient focus on developing new products, even though Shanxi Xinghuacun Fen Wine has relatively successful track record of launching new products.
Lack of clear differentiation of Shanxi Xinghuacun Fen Wine products
– To increase the profitability and margins on the products, Shanxi Xinghuacun Fen Wine needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Shanxi Xinghuacun Fen Wine 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.
Products dominated business model
– Even though Shanxi Xinghuacun Fen Wine has some of the most successful models in the Beverages (Alcoholic) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Shanxi Xinghuacun Fen Wine should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Shanxi Xinghuacun Fen Wine has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Beverages (Alcoholic) industry over the last five years. Shanxi Xinghuacun Fen Wine 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.
Increasing silos among functional specialists
– The organizational structure of Shanxi Xinghuacun Fen Wine is dominated by functional specialists. It is not different from other players in the Beverages (Alcoholic) industry, but Shanxi Xinghuacun Fen Wine needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Shanxi Xinghuacun Fen Wine to focus more on services in the Beverages (Alcoholic) industry rather than just following the product oriented approach.
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 Shanxi Xinghuacun Fen Wine supply chain. Even after few cautionary changes, Shanxi Xinghuacun Fen Wine is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Shanxi Xinghuacun Fen Wine vulnerable to further global disruptions in South East Asia.
Employees’ less understanding of Shanxi Xinghuacun Fen Wine strategy
– From the outside it seems that the employees of Shanxi Xinghuacun Fen Wine 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.
Shanxi Xinghuacun Fen Wine Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Shanxi Xinghuacun Fen Wine are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Shanxi Xinghuacun Fen Wine is facing challenges because of the dominance of functional experts in the organization. Shanxi Xinghuacun Fen Wine can utilize new technology in the field of Beverages (Alcoholic) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Shanxi Xinghuacun Fen Wine 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 Shanxi Xinghuacun Fen Wine to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Shanxi Xinghuacun Fen Wine has opened avenues for new revenue streams for the organization in Beverages (Alcoholic) industry. This can help Shanxi Xinghuacun Fen Wine to build a more holistic ecosystem for Shanxi Xinghuacun Fen Wine products in the Beverages (Alcoholic) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Use of Bitcoin and other crypto currencies for transactions in Beverages (Alcoholic) industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Shanxi Xinghuacun Fen Wine in the Beverages (Alcoholic) industry. Now Shanxi Xinghuacun Fen Wine can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Beverages (Alcoholic) industry, but it has also influenced the consumer preferences. Shanxi Xinghuacun Fen Wine can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Shanxi Xinghuacun Fen Wine can use the latest technology developments to improve its manufacturing and designing process in Beverages (Alcoholic) 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 Shanxi Xinghuacun Fen Wine 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 Shanxi Xinghuacun Fen Wine 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 Beverages (Alcoholic) industry.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Shanxi Xinghuacun Fen Wine 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 Shanxi Xinghuacun Fen Wine to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Beverages (Alcoholic) industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Shanxi Xinghuacun Fen Wine 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. Shanxi Xinghuacun Fen Wine 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.
Developing new processes and practices
– Shanxi Xinghuacun Fen Wine can develop new processes and procedures in Beverages (Alcoholic) 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.
Using analytics as competitive advantage
– Shanxi Xinghuacun Fen Wine has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Beverages (Alcoholic) sector. This continuous investment in analytics has enabled Shanxi Xinghuacun Fen Wine to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shanxi Xinghuacun Fen Wine to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Shanxi Xinghuacun Fen Wine 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.
Threats Shanxi Xinghuacun Fen Wine External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Shanxi Xinghuacun Fen Wine are -
Easy access to finance
– Easy access to finance in Beverages (Alcoholic) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Shanxi Xinghuacun Fen Wine can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Shanxi Xinghuacun Fen Wine 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 Beverages (Alcoholic) industry regulations.
Stagnating economy with rate increase
– Shanxi Xinghuacun Fen Wine 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 Beverages (Alcoholic) industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Shanxi Xinghuacun Fen Wine in Beverages (Alcoholic) industry. The Beverages (Alcoholic) 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.
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 Shanxi Xinghuacun Fen Wine business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Shanxi Xinghuacun Fen Wine 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. Shanxi Xinghuacun Fen Wine can take advantage of this fund but it will also bring new competitors in the Beverages (Alcoholic) industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Beverages (Alcoholic) industry are lowering. It can presents Shanxi Xinghuacun Fen Wine with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Beverages (Alcoholic) sector.
High dependence on third party suppliers
– Shanxi Xinghuacun Fen Wine 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.
Increasing wage structure of Shanxi Xinghuacun Fen Wine
– 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 Shanxi Xinghuacun Fen Wine.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Shanxi Xinghuacun Fen Wine 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 Shanxi Xinghuacun Fen Wine prominent markets.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Shanxi Xinghuacun Fen Wine may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Beverages (Alcoholic) 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 Shanxi Xinghuacun Fen Wine.
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.
Weighted SWOT Analysis of Shanxi Xinghuacun Fen Wine Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Shanxi Xinghuacun Fen Wine 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 Shanxi Xinghuacun Fen Wine 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 Shanxi Xinghuacun Fen Wine 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 Shanxi Xinghuacun Fen Wine 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 Shanxi Xinghuacun Fen Wine needs to make to build a sustainable competitive advantage.