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 commodity prices, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion,
geopolitical disruptions, wage bills are increasing, 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 -
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.
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.
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.
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.
Analytics focus
– Shanxi Baiyuan Trousers Chain A 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 Retail (Apparel) 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.
Innovation driven organization
– Shanxi Baiyuan Trousers Chain A is one of the most innovative firm in Retail (Apparel) sector.
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.
Sustainable margins compare to other players in Retail (Apparel) industry
– Shanxi Baiyuan Trousers Chain A has clearly differentiated products in the market place. This has enabled Shanxi Baiyuan Trousers Chain A to fetch slight price premium compare to the competitors in the Retail (Apparel) industry. The sustainable margins have also helped Shanxi Baiyuan Trousers Chain A to invest into research and development (R&D) and innovation.
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.
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.
Training and development
– Shanxi Baiyuan Trousers Chain A has one of the best training and development program in Services 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.
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.
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.
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.
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.
Employees’ less understanding of Shanxi Baiyuan Trousers Chain A strategy
– From the outside it seems that the employees of Shanxi Baiyuan Trousers Chain A 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.
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.
Products dominated business model
– Even though Shanxi Baiyuan Trousers Chain A has some of the most successful models in the Retail (Apparel) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Shanxi Baiyuan Trousers Chain A should strive to include more intangible value offerings along with its core products and services.
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.
High operating costs
– Compare to the competitors, Shanxi Baiyuan Trousers Chain A has high operating costs in the Retail (Apparel) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Shanxi Baiyuan Trousers Chain A lucrative customers.
Low market penetration in new markets
– Outside its home market of China, Shanxi Baiyuan Trousers Chain A needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Shanxi Baiyuan Trousers Chain A 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.
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 -
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.
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.
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.
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.
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.
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.
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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Retail (Apparel) industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Shanxi Baiyuan Trousers Chain A 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. Shanxi Baiyuan Trousers Chain A 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.
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.
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.
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.
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.
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 -
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.
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 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.
High dependence on third party suppliers
– Shanxi Baiyuan Trousers Chain A 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.
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.
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.
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.
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.
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.
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.
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.
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.
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.