SWOT Analysis / TOWS Matrix for Anhui Kouzi Distillery (China)
Based on various researches at Oak Spring University , Anhui Kouzi Distillery is operating in a macro-environment that has been destablized by – challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, increasing government debt because of Covid-19 spendings, increasing energy prices, wage bills are increasing, central banks are concerned over increasing inflation,
supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Anhui Kouzi Distillery
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Anhui Kouzi Distillery can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Anhui Kouzi Distillery, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Anhui Kouzi Distillery 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 Anhui Kouzi Distillery can be done for the following purposes –
1. Strategic planning of Anhui Kouzi Distillery
2. Improving business portfolio management of Anhui Kouzi Distillery
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 Anhui Kouzi Distillery
Strengths of Anhui Kouzi Distillery | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Anhui Kouzi Distillery are -
Low bargaining power of suppliers
– Suppliers of Anhui Kouzi Distillery in the Consumer/Non-Cyclical sector have low bargaining power. Anhui Kouzi Distillery has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Anhui Kouzi Distillery to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Anhui Kouzi Distillery 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.
Ability to recruit top talent
– Anhui Kouzi Distillery 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.
High brand equity
– Anhui Kouzi Distillery has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Anhui Kouzi Distillery to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Anhui Kouzi Distillery has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Anhui Kouzi Distillery 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.
Diverse revenue streams
– Anhui Kouzi Distillery is present in almost all the verticals within the Beverages (Alcoholic) industry. This has provided Anhui Kouzi Distillery 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.
Effective Research and Development (R&D)
– Anhui Kouzi Distillery has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Anhui Kouzi Distillery staying ahead in the Beverages (Alcoholic) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Anhui Kouzi Distillery 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.
Ability to lead change in Beverages (Alcoholic)
– Anhui Kouzi Distillery is one of the leading players in the Beverages (Alcoholic) industry in China. Over the years it has not only transformed the business landscape in the Beverages (Alcoholic) industry in China but also across the existing markets. The ability to lead change has enabled Anhui Kouzi Distillery in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Beverages (Alcoholic) industry
– Anhui Kouzi Distillery has clearly differentiated products in the market place. This has enabled Anhui Kouzi Distillery to fetch slight price premium compare to the competitors in the Beverages (Alcoholic) industry. The sustainable margins have also helped Anhui Kouzi Distillery to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Anhui Kouzi Distillery 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 Anhui Kouzi Distillery have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy of Anhui Kouzi Distillery comprises – understanding the underlying the factors in the Beverages (Alcoholic) 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.
Weaknesses of Anhui Kouzi Distillery | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Anhui Kouzi Distillery are -
Ability to respond to the competition
– As the decision making is very deliberative at Anhui Kouzi Distillery, in the dynamic environment of Beverages (Alcoholic) industry it has struggled to respond to the nimble upstart competition. Anhui Kouzi Distillery has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– From the 10K / annual statement of Anhui Kouzi Distillery, 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.
Lack of clear differentiation of Anhui Kouzi Distillery products
– To increase the profitability and margins on the products, Anhui Kouzi Distillery needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Anhui Kouzi Distillery is slow explore the new channels of communication. These new channels of communication can help Anhui Kouzi Distillery to provide better information regarding Beverages (Alcoholic) products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Anhui Kouzi Distillery 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.
Skills based hiring in Beverages (Alcoholic) industry
– The stress on hiring functional specialists at Anhui Kouzi Distillery 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 Anhui Kouzi Distillery ‘s star products
– The top 2 products and services of Anhui Kouzi Distillery 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 Anhui Kouzi Distillery has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Anhui Kouzi Distillery 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 Beverages (Alcoholic) industry using digital technology.
Need for greater diversity
– Anhui Kouzi Distillery 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.
Slow to strategic competitive environment developments
– As Anhui Kouzi Distillery is one of the leading players in the Beverages (Alcoholic) industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Beverages (Alcoholic) industry in last five years.
High bargaining power of channel partners in Beverages (Alcoholic) industry
– because of the regulatory requirements in China, Anhui Kouzi Distillery 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.
Anhui Kouzi Distillery Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Anhui Kouzi Distillery are -
Creating value in data economy
– The success of analytics program of Anhui Kouzi Distillery has opened avenues for new revenue streams for the organization in Beverages (Alcoholic) industry. This can help Anhui Kouzi Distillery to build a more holistic ecosystem for Anhui Kouzi Distillery products in the Beverages (Alcoholic) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Anhui Kouzi Distillery 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 Anhui Kouzi Distillery to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Anhui Kouzi Distillery 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Anhui Kouzi Distillery is facing challenges because of the dominance of functional experts in the organization. Anhui Kouzi Distillery 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.
Developing new processes and practices
– Anhui Kouzi Distillery 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.
Buying journey improvements
– Anhui Kouzi Distillery can improve the customer journey of consumers in the Beverages (Alcoholic) 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Anhui Kouzi Distillery in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Beverages (Alcoholic) industry, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Anhui Kouzi Distillery 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 Anhui Kouzi Distillery to build a competitive advantage using analytics. The analytics driven competitive advantage can help Anhui Kouzi Distillery to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Anhui Kouzi Distillery 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.
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. Anhui Kouzi Distillery can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Anhui Kouzi Distillery 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 Anhui Kouzi Distillery to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Anhui Kouzi Distillery 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 Beverages (Alcoholic) industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Anhui Kouzi Distillery in the Beverages (Alcoholic) industry. Now Anhui Kouzi Distillery can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Anhui Kouzi Distillery External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Anhui Kouzi Distillery are -
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 Anhui Kouzi Distillery.
Shortening product life cycle
– it is one of the major threat that Anhui Kouzi Distillery is facing in Beverages (Alcoholic) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Anhui Kouzi Distillery 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Anhui Kouzi Distillery 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.
Stagnating economy with rate increase
– Anhui Kouzi Distillery 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.
High dependence on third party suppliers
– Anhui Kouzi Distillery 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.
Technology acceleration in Forth Industrial Revolution
– Anhui Kouzi Distillery has witnessed rapid integration of technology during Covid-19 in the Beverages (Alcoholic) industry. As one of the leading players in the industry, Anhui Kouzi Distillery needs to keep up with the evolution of technology in the Beverages (Alcoholic) 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.
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. Anhui Kouzi Distillery 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. Anhui Kouzi Distillery needs to understand the core reasons impacting the Beverages (Alcoholic) industry. This will help it in building a better workplace.
Environmental challenges
– Anhui Kouzi Distillery 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. Anhui Kouzi Distillery can take advantage of this fund but it will also bring new competitors in the Beverages (Alcoholic) industry.
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 Anhui Kouzi Distillery in the Beverages (Alcoholic) sector and impact the bottomline of the organization.
Consumer confidence and its impact on Anhui Kouzi Distillery 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 Beverages (Alcoholic) industry and other sectors.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Anhui Kouzi Distillery 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.
Weighted SWOT Analysis of Anhui Kouzi Distillery Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Anhui Kouzi Distillery 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 Anhui Kouzi Distillery 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 Anhui Kouzi Distillery 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 Anhui Kouzi Distillery 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 Anhui Kouzi Distillery needs to make to build a sustainable competitive advantage.
