Shanghai M&G Stationery (603899) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Shanghai M&G Stationery (China)

Based on various researches at Oak Spring University , Shanghai M&G Stationery is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, increasing government debt because of Covid-19 spendings, increasing commodity prices, there is backlash against globalization, technology disruption, etc

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Introduction to SWOT Analysis of Shanghai M&G Stationery

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Shanghai M&G Stationery can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shanghai M&G Stationery, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shanghai M&G Stationery 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 Shanghai M&G Stationery can be done for the following purposes –
1. Strategic planning of Shanghai M&G Stationery
2. Improving business portfolio management of Shanghai M&G Stationery
3. Assessing feasibility of the new initiative in China
4. Making a Office Supplies sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Shanghai M&G Stationery

Strengths of Shanghai M&G Stationery | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Shanghai M&G Stationery are -

Ability to recruit top talent

– Shanghai M&G Stationery is one of the leading players in the Office Supplies 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.

Innovation driven organization

– Shanghai M&G Stationery is one of the most innovative firm in Office Supplies sector.

Learning organization

- Shanghai M&G Stationery 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 Shanghai M&G Stationery is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Shanghai M&G Stationery emphasize – knowledge, initiative, and innovation.

Digital Transformation in Office Supplies industry

- digital transformation varies from industry to industry. For Shanghai M&G Stationery digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shanghai M&G Stationery 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 Shanghai M&G Stationery 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.

Organizational Resilience of Shanghai M&G Stationery

– The covid-19 pandemic has put organizational resilience at the centre of everthing Shanghai M&G Stationery does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Diverse revenue streams

– Shanghai M&G Stationery is present in almost all the verticals within the Office Supplies industry. This has provided Shanghai M&G Stationery 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.

Ability to lead change in Office Supplies

– Shanghai M&G Stationery is one of the leading players in the Office Supplies industry in China. Over the years it has not only transformed the business landscape in the Office Supplies industry in China but also across the existing markets. The ability to lead change has enabled Shanghai M&G Stationery in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Successful track record of launching new products

– Shanghai M&G Stationery has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Shanghai M&G Stationery 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.

Analytics focus

– Shanghai M&G Stationery 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 Office Supplies 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.

Low bargaining power of suppliers

– Suppliers of Shanghai M&G Stationery in the Consumer/Non-Cyclical sector have low bargaining power. Shanghai M&G Stationery has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shanghai M&G Stationery to manage not only supply disruptions but also source products at highly competitive prices.

Cross disciplinary teams

– Horizontal connected teams at the Shanghai M&G Stationery 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 Shanghai M&G Stationery | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Shanghai M&G Stationery are -

Interest costs

– Compare to the competition, Shanghai M&G Stationery 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 Shanghai M&G Stationery, in the dynamic environment of Office Supplies industry it has struggled to respond to the nimble upstart competition. Shanghai M&G Stationery has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Workers concerns about automation

– As automation is fast increasing in the Office Supplies industry, Shanghai M&G Stationery 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, Shanghai M&G Stationery has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Office Supplies industry over the last five years. Shanghai M&G Stationery 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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Shanghai M&G Stationery is slow explore the new channels of communication. These new channels of communication can help Shanghai M&G Stationery to provide better information regarding Office Supplies products and services. It can also build an online community to further reach out to potential customers.

High operating costs

– Compare to the competitors, Shanghai M&G Stationery has high operating costs in the Office Supplies industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Shanghai M&G Stationery lucrative customers.

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 Shanghai M&G Stationery supply chain. Even after few cautionary changes, Shanghai M&G Stationery is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Shanghai M&G Stationery vulnerable to further global disruptions in South East Asia.

High dependence on Shanghai M&G Stationery ‘s star products

– The top 2 products and services of Shanghai M&G Stationery still accounts for major business revenue. This dependence on star products in Office Supplies industry has resulted into insufficient focus on developing new products, even though Shanghai M&G Stationery has relatively successful track record of launching new products.

Capital Spending Reduction

– Even during the low interest decade, Shanghai M&G Stationery 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 Office Supplies industry using digital technology.

Compensation and incentives

– The revenue per employee of Shanghai M&G Stationery is just above the Office Supplies 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.

Need for greater diversity

– Shanghai M&G Stationery 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.

Shanghai M&G Stationery Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Shanghai M&G Stationery are -

Using analytics as competitive advantage

– Shanghai M&G Stationery has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Office Supplies sector. This continuous investment in analytics has enabled Shanghai M&G Stationery to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shanghai M&G Stationery to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Buying journey improvements

– Shanghai M&G Stationery can improve the customer journey of consumers in the Office Supplies 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Shanghai M&G Stationery can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Learning at scale

– Online learning technologies has now opened space for Shanghai M&G Stationery 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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Shanghai M&G Stationery 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 Shanghai M&G Stationery to hire the very best people irrespective of their geographical location.

Use of Bitcoin and other crypto currencies for transactions in Office Supplies industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Shanghai M&G Stationery in the Office Supplies industry. Now Shanghai M&G Stationery can target international markets with far fewer capital restrictions requirements than the existing system.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Shanghai M&G Stationery is facing challenges because of the dominance of functional experts in the organization. Shanghai M&G Stationery can utilize new technology in the field of Office Supplies industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Office Supplies industry, but it has also influenced the consumer preferences. Shanghai M&G Stationery can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Loyalty marketing

– Shanghai M&G Stationery has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.

Creating value in data economy

– The success of analytics program of Shanghai M&G Stationery has opened avenues for new revenue streams for the organization in Office Supplies industry. This can help Shanghai M&G Stationery to build a more holistic ecosystem for Shanghai M&G Stationery products in the Office Supplies industry by providing – data insight services, data privacy related products, data based consulting services, etc.

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 Shanghai M&G Stationery 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.

Leveraging digital technologies

– Shanghai M&G Stationery 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.

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. Shanghai M&G Stationery can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Threats Shanghai M&G Stationery External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Shanghai M&G Stationery are -

Technology acceleration in Forth Industrial Revolution

– Shanghai M&G Stationery has witnessed rapid integration of technology during Covid-19 in the Office Supplies industry. As one of the leading players in the industry, Shanghai M&G Stationery needs to keep up with the evolution of technology in the Office Supplies sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Shanghai M&G Stationery may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Office Supplies sector.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Shanghai M&G Stationery in Office Supplies industry. The Office Supplies 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.

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 Shanghai M&G Stationery in the Office Supplies sector and impact the bottomline of the organization.

Increasing wage structure of Shanghai M&G Stationery

– 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 Shanghai M&G Stationery.

Easy access to finance

– Easy access to finance in Office Supplies industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Shanghai M&G Stationery can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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. Shanghai M&G Stationery needs to understand the core reasons impacting the Office Supplies industry. This will help it in building a better workplace.

Consumer confidence and its impact on Shanghai M&G Stationery demand

– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in Office Supplies industry and other sectors.

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.

Environmental challenges

– Shanghai M&G Stationery 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. Shanghai M&G Stationery can take advantage of this fund but it will also bring new competitors in the Office Supplies industry.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Shanghai M&G Stationery 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 Shanghai M&G Stationery prominent markets.

High dependence on third party suppliers

– Shanghai M&G Stationery 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

– Shanghai M&G Stationery 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 Office Supplies industry.

Weighted SWOT Analysis of Shanghai M&G Stationery Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Shanghai M&G Stationery 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 Shanghai M&G Stationery 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 Shanghai M&G Stationery 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 Shanghai M&G Stationery 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 Shanghai M&G Stationery needs to make to build a sustainable competitive advantage.

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