Shanxi Baiyuan Trousers Chain A (2640) SWOT Analysis / TOWS Matrix / MBA Resources
Retail (Apparel)
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Shanxi Baiyuan Trousers Chain A (China)
Based on various researches at Oak Spring University , Shanxi Baiyuan Trousers Chain A is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion,
banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Shanxi Baiyuan Trousers Chain A
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Shanxi Baiyuan Trousers Chain A can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shanxi Baiyuan Trousers Chain A, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shanxi Baiyuan Trousers Chain A operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Shanxi Baiyuan Trousers Chain A can be done for the following purposes –
1. Strategic planning of Shanxi Baiyuan Trousers Chain A
2. Improving business portfolio management of Shanxi Baiyuan Trousers Chain A
3. Assessing feasibility of the new initiative in China
4. Making a Retail (Apparel) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Shanxi Baiyuan Trousers Chain A
Strengths of Shanxi Baiyuan Trousers Chain A | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shanxi Baiyuan Trousers Chain A are -
Operational resilience
– The operational resilience strategy of Shanxi Baiyuan Trousers Chain A comprises – understanding the underlying the factors in the Retail (Apparel) 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.
Successful track record of launching new products
– Shanxi Baiyuan Trousers Chain A has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Shanxi Baiyuan Trousers Chain A 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.
Effective Research and Development (R&D)
– Shanxi Baiyuan Trousers Chain A has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Shanxi Baiyuan Trousers Chain A staying ahead in the Retail (Apparel) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Shanxi Baiyuan Trousers Chain A has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Retail (Apparel) industry. Secondly the value chain collaborators of Shanxi Baiyuan Trousers Chain A have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Shanxi Baiyuan Trousers Chain A is present in almost all the verticals within the Retail (Apparel) industry. This has provided Shanxi Baiyuan Trousers Chain A 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 recruit top talent
– Shanxi Baiyuan Trousers Chain A is one of the leading players in the Retail (Apparel) 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.
Digital Transformation in Retail (Apparel) industry
- digital transformation varies from industry to industry. For Shanxi Baiyuan Trousers Chain A digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shanxi Baiyuan Trousers Chain A has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Innovation driven organization
– Shanxi Baiyuan Trousers Chain A is one of the most innovative firm in Retail (Apparel) sector.
Strong track record of project management in the Retail (Apparel) industry
– Shanxi Baiyuan Trousers Chain A is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Shanxi Baiyuan Trousers Chain A has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Ability to lead change in Retail (Apparel)
– Shanxi Baiyuan Trousers Chain A is one of the leading players in the Retail (Apparel) industry in China. Over the years it has not only transformed the business landscape in the Retail (Apparel) industry in China but also across the existing markets. The ability to lead change has enabled Shanxi Baiyuan Trousers Chain A in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Shanxi Baiyuan Trousers Chain A in Retail (Apparel) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses of Shanxi Baiyuan Trousers Chain A | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shanxi Baiyuan Trousers Chain A are -
Slow to strategic competitive environment developments
– As Shanxi Baiyuan Trousers Chain A is one of the leading players in the Retail (Apparel) industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Retail (Apparel) industry in last five years.
High bargaining power of channel partners in Retail (Apparel) industry
– because of the regulatory requirements in China, Shanxi Baiyuan Trousers Chain A 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 Retail (Apparel) industry.
High dependence on Shanxi Baiyuan Trousers Chain A ‘s star products
– The top 2 products and services of Shanxi Baiyuan Trousers Chain A still accounts for major business revenue. This dependence on star products in Retail (Apparel) industry has resulted into insufficient focus on developing new products, even though Shanxi Baiyuan Trousers Chain A has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Shanxi Baiyuan Trousers Chain A is slow explore the new channels of communication. These new channels of communication can help Shanxi Baiyuan Trousers Chain A to provide better information regarding Retail (Apparel) products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– From the outside it seems that Shanxi Baiyuan Trousers Chain A needs to have more collaboration between its sales team and marketing team. Sales professionals in the Retail (Apparel) industry have deep experience in developing customer relationships. Marketing department at Shanxi Baiyuan Trousers Chain A can leverage the sales team experience to cultivate customer relationships as Shanxi Baiyuan Trousers Chain A is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Shanxi Baiyuan Trousers Chain A has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Retail (Apparel) industry using digital technology.
Increasing silos among functional specialists
– The organizational structure of Shanxi Baiyuan Trousers Chain A is dominated by functional specialists. It is not different from other players in the Retail (Apparel) industry, but Shanxi Baiyuan Trousers Chain A needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Shanxi Baiyuan Trousers Chain A to focus more on services in the Retail (Apparel) 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 Baiyuan Trousers Chain A supply chain. Even after few cautionary changes, Shanxi Baiyuan Trousers Chain A is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Shanxi Baiyuan Trousers Chain A vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee of Shanxi Baiyuan Trousers Chain A is just above the Retail (Apparel) 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.
High cash cycle compare to competitors
Shanxi Baiyuan Trousers Chain A has a high cash cycle compare to other players in the Retail (Apparel) industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Interest costs
– Compare to the competition, Shanxi Baiyuan Trousers Chain A has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Shanxi Baiyuan Trousers Chain A Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Shanxi Baiyuan Trousers Chain A are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Shanxi Baiyuan Trousers Chain A can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Shanxi Baiyuan Trousers Chain A can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
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. Shanxi Baiyuan Trousers Chain A can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Shanxi Baiyuan Trousers Chain A can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help Shanxi Baiyuan Trousers Chain A to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Shanxi Baiyuan Trousers Chain A 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.
Using analytics as competitive advantage
– Shanxi Baiyuan Trousers Chain A has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Retail (Apparel) sector. This continuous investment in analytics has enabled Shanxi Baiyuan Trousers Chain A to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shanxi Baiyuan Trousers Chain A to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Shanxi Baiyuan Trousers Chain A can develop new processes and procedures in Retail (Apparel) 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Shanxi Baiyuan Trousers Chain A in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Retail (Apparel) industry, and it will provide faster access to the consumers.
Buying journey improvements
– Shanxi Baiyuan Trousers Chain A can improve the customer journey of consumers in the Retail (Apparel) 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Shanxi Baiyuan Trousers Chain A 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.
Creating value in data economy
– The success of analytics program of Shanxi Baiyuan Trousers Chain A has opened avenues for new revenue streams for the organization in Retail (Apparel) industry. This can help Shanxi Baiyuan Trousers Chain A to build a more holistic ecosystem for Shanxi Baiyuan Trousers Chain A products in the Retail (Apparel) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Shanxi Baiyuan Trousers Chain A to increase its market reach. Shanxi Baiyuan Trousers Chain A 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.
Manufacturing automation
– Shanxi Baiyuan Trousers Chain A can use the latest technology developments to improve its manufacturing and designing process in Retail (Apparel) 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.
Threats Shanxi Baiyuan Trousers Chain A External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Shanxi Baiyuan Trousers Chain A are -
Shortening product life cycle
– it is one of the major threat that Shanxi Baiyuan Trousers Chain A is facing in Retail (Apparel) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Baiyuan Trousers Chain A business can come under increasing regulations regarding data privacy, data security, 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 Shanxi Baiyuan Trousers Chain A in the Retail (Apparel) sector and impact the bottomline of the organization.
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. Shanxi Baiyuan Trousers Chain A needs to understand the core reasons impacting the Retail (Apparel) industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Shanxi Baiyuan Trousers Chain A may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Retail (Apparel) sector.
Easy access to finance
– Easy access to finance in Retail (Apparel) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Shanxi Baiyuan Trousers Chain A can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Shanxi Baiyuan Trousers Chain A can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate Shanxi Baiyuan Trousers Chain A prominent markets.
Technology acceleration in Forth Industrial Revolution
– Shanxi Baiyuan Trousers Chain A has witnessed rapid integration of technology during Covid-19 in the Retail (Apparel) industry. As one of the leading players in the industry, Shanxi Baiyuan Trousers Chain A needs to keep up with the evolution of technology in the Retail (Apparel) 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.
Regulatory challenges
– Shanxi Baiyuan Trousers Chain A needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Retail (Apparel) industry regulations.
Stagnating economy with rate increase
– Shanxi Baiyuan Trousers Chain A 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 Retail (Apparel) industry.
Environmental challenges
– Shanxi Baiyuan Trousers Chain A 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 Baiyuan Trousers Chain A can take advantage of this fund but it will also bring new competitors in the Retail (Apparel) industry.
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. Shanxi Baiyuan Trousers Chain A will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Consumer confidence and its impact on Shanxi Baiyuan Trousers Chain A 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 Retail (Apparel) industry and other sectors.
Weighted SWOT Analysis of Shanxi Baiyuan Trousers Chain A Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Shanxi Baiyuan Trousers Chain A needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of Shanxi Baiyuan Trousers Chain A is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of Shanxi Baiyuan Trousers Chain A is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Shanxi Baiyuan Trousers Chain A to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Shanxi Baiyuan Trousers Chain A needs to make to build a sustainable competitive advantage.
