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 – increasing household debt because of falling income levels, increasing commodity prices, talent flight as more people leaving formal jobs, technology disruption, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China,
increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
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 -
Strong track record of project management in the Office Supplies industry
– Shanghai M&G Stationery is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy of Shanghai M&G Stationery comprises – understanding the underlying the factors in the Office Supplies 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.
Innovation driven organization
– Shanghai M&G Stationery is one of the most innovative firm in Office Supplies sector.
Training and development
– Shanghai M&G Stationery 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.
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.
Effective Research and Development (R&D)
– Shanghai M&G Stationery has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Shanghai M&G Stationery staying ahead in the Office Supplies industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Office Supplies industry
– Shanghai M&G Stationery has clearly differentiated products in the market place. This has enabled Shanghai M&G Stationery to fetch slight price premium compare to the competitors in the Office Supplies industry. The sustainable margins have also helped Shanghai M&G Stationery to invest into research and development (R&D) and innovation.
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.
Highly skilled collaborators
– Shanghai M&G Stationery has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Office Supplies industry. Secondly the value chain collaborators of Shanghai M&G Stationery have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
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 -
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.
Low market penetration in new markets
– Outside its home market of China, Shanghai M&G Stationery needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Shanghai M&G Stationery is dominated by functional specialists. It is not different from other players in the Office Supplies industry, but Shanghai M&G Stationery needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Shanghai M&G Stationery to focus more on services in the Office Supplies industry rather than just following the product oriented approach.
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.
Employees’ less understanding of Shanghai M&G Stationery strategy
– From the outside it seems that the employees of Shanghai M&G Stationery 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.
Aligning sales with marketing
– From the outside it seems that Shanghai M&G Stationery needs to have more collaboration between its sales team and marketing team. Sales professionals in the Office Supplies industry have deep experience in developing customer relationships. Marketing department at Shanghai M&G Stationery can leverage the sales team experience to cultivate customer relationships as Shanghai M&G Stationery is planning to shift buying processes online.
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 bargaining power of channel partners in Office Supplies industry
– because of the regulatory requirements in China, Shanghai M&G Stationery 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 Office Supplies industry.
No frontier risks strategy
– From the 10K / annual statement of Shanghai M&G Stationery, it seems that company is thinking out the frontier risks that can impact Office Supplies 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.
Slow to strategic competitive environment developments
– As Shanghai M&G Stationery is one of the leading players in the Office Supplies industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Office Supplies industry in last five years.
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 -
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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Office Supplies industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Shanghai M&G Stationery 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. Shanghai M&G Stationery 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.
Better consumer reach
– The expansion of the 5G network will help Shanghai M&G Stationery to increase its market reach. Shanghai M&G Stationery 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.
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.
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.
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.
Developing new processes and practices
– Shanghai M&G Stationery can develop new processes and procedures in Office Supplies 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Shanghai M&G Stationery 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.
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.
Manufacturing automation
– Shanghai M&G Stationery can use the latest technology developments to improve its manufacturing and designing process in Office Supplies 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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Shanghai M&G Stationery 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 Shanghai M&G Stationery to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 -
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.
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.
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.
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.
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 Shanghai M&G Stationery business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Shanghai M&G Stationery is facing in Office Supplies sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
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. Shanghai M&G Stationery 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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Office Supplies industry are lowering. It can presents Shanghai M&G Stationery with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Office Supplies sector.
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.
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.
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.
