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 – increasing household debt because of falling income levels, there is backlash against globalization, supply chains are disrupted by pandemic , increasing transportation and logistics costs, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies,
customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, 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 -
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.
Innovation driven organization
– Shanxi Baiyuan Trousers Chain A is one of the most innovative firm in Retail (Apparel) sector.
High brand equity
– Shanxi Baiyuan Trousers Chain A has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Shanxi Baiyuan Trousers Chain A to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
Organizational Resilience of Shanxi Baiyuan Trousers Chain A
– The covid-19 pandemic has put organizational resilience at the centre of everthing Shanxi Baiyuan Trousers Chain A does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
Cross disciplinary teams
– Horizontal connected teams at the Shanxi Baiyuan Trousers Chain A 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.
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.
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.
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.
Learning organization
- Shanxi Baiyuan Trousers Chain A is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Shanxi Baiyuan Trousers Chain A is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Shanxi Baiyuan Trousers Chain A emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Shanxi Baiyuan Trousers Chain A in the Services sector have low bargaining power. Shanxi Baiyuan Trousers Chain A has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shanxi Baiyuan Trousers Chain A to manage not only supply disruptions but also source products at highly competitive prices.
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 -
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.
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.
Ability to respond to the competition
– As the decision making is very deliberative at Shanxi Baiyuan Trousers Chain A, in the dynamic environment of Retail (Apparel) industry it has struggled to respond to the nimble upstart competition. Shanxi Baiyuan Trousers Chain A has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring in Retail (Apparel) industry
– The stress on hiring functional specialists at Shanxi Baiyuan Trousers Chain A 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.
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.
Slow decision making process
– As mentioned earlier in the report, Shanxi Baiyuan Trousers Chain A has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Retail (Apparel) industry over the last five years. Shanxi Baiyuan Trousers Chain A 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.
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.
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.
Lack of clear differentiation of Shanxi Baiyuan Trousers Chain A products
– To increase the profitability and margins on the products, Shanxi Baiyuan Trousers Chain A needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the Retail (Apparel) industry, Shanxi Baiyuan Trousers Chain A 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.
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.
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 -
Use of Bitcoin and other crypto currencies for transactions in Retail (Apparel) industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Shanxi Baiyuan Trousers Chain A in the Retail (Apparel) industry. Now Shanxi Baiyuan Trousers Chain A can target international markets with far fewer capital restrictions requirements than the existing system.
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 Shanxi Baiyuan Trousers Chain A 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
– 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Shanxi Baiyuan Trousers Chain A can use these opportunities to build new business models that can help the communities that Shanxi Baiyuan Trousers Chain A operates in. Secondly it can use opportunities from government spending in Retail (Apparel) sector.
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.
Building a culture of innovation
– managers at Shanxi Baiyuan Trousers Chain A can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Retail (Apparel) industry.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Retail (Apparel) industry, but it has also influenced the consumer preferences. Shanxi Baiyuan Trousers Chain A can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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.
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.
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Shanxi Baiyuan Trousers Chain A is facing challenges because of the dominance of functional experts in the organization. Shanxi Baiyuan Trousers Chain A can utilize new technology in the field of Retail (Apparel) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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 -
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Shanxi Baiyuan Trousers Chain A in Retail (Apparel) industry. The Retail (Apparel) 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.
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.
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.
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.
Increasing wage structure of Shanxi Baiyuan Trousers Chain A
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Shanxi Baiyuan Trousers Chain A.
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.
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.
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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Shanxi Baiyuan Trousers Chain A.
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.
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.
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.
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.