Lao Feng Xiang B (900905) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Lao Feng Xiang B (China)

Based on various researches at Oak Spring University , Lao Feng Xiang B is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, increasing energy prices, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, etc

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Introduction to SWOT Analysis of Lao Feng Xiang B

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Lao Feng Xiang B can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Lao Feng Xiang B, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Lao Feng Xiang B 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Lao Feng Xiang B can be done for the following purposes –
1. Strategic planning of Lao Feng Xiang B
2. Improving business portfolio management of Lao Feng Xiang B
3. Assessing feasibility of the new initiative in China
4. Making a Jewelry & Silverware sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Lao Feng Xiang B

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Strengths of Lao Feng Xiang B | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Lao Feng Xiang B are -

Sustainable margins compare to other players in Jewelry & Silverware industry

– Lao Feng Xiang B has clearly differentiated products in the market place. This has enabled Lao Feng Xiang B to fetch slight price premium compare to the competitors in the Jewelry & Silverware industry. The sustainable margins have also helped Lao Feng Xiang B to invest into research and development (R&D) and innovation.

Successful track record of launching new products

– Lao Feng Xiang B has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Lao Feng Xiang B 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)

– Lao Feng Xiang B has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Lao Feng Xiang B staying ahead in the Jewelry & Silverware industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Ability to lead change in Jewelry & Silverware

– Lao Feng Xiang B is one of the leading players in the Jewelry & Silverware industry in China. Over the years it has not only transformed the business landscape in the Jewelry & Silverware industry in China but also across the existing markets. The ability to lead change has enabled Lao Feng Xiang B in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Learning organization

- Lao Feng Xiang B 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 Lao Feng Xiang B is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Lao Feng Xiang B emphasize – knowledge, initiative, and innovation.

Analytics focus

– Lao Feng Xiang B 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 Jewelry & Silverware 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

– Lao Feng Xiang B is one of the leading players in the Jewelry & Silverware 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.

Diverse revenue streams

– Lao Feng Xiang B is present in almost all the verticals within the Jewelry & Silverware industry. This has provided Lao Feng Xiang B 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.

Strong track record of project management in the Jewelry & Silverware industry

– Lao Feng Xiang B is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Innovation driven organization

– Lao Feng Xiang B is one of the most innovative firm in Jewelry & Silverware sector.

Organizational Resilience of Lao Feng Xiang B

– The covid-19 pandemic has put organizational resilience at the centre of everthing Lao Feng Xiang B does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Cross disciplinary teams

– Horizontal connected teams at the Lao Feng Xiang B 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.

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Weaknesses of Lao Feng Xiang B | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Lao Feng Xiang B are -

Products dominated business model

– Even though Lao Feng Xiang B has some of the most successful models in the Jewelry & Silverware industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Lao Feng Xiang B should strive to include more intangible value offerings along with its core products and services.

Employees’ less understanding of Lao Feng Xiang B strategy

– From the outside it seems that the employees of Lao Feng Xiang B 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.

Need for greater diversity

– Lao Feng Xiang B 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 decision making process

– As mentioned earlier in the report, Lao Feng Xiang B has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Jewelry & Silverware industry over the last five years. Lao Feng Xiang B 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.

High cash cycle compare to competitors

Lao Feng Xiang B has a high cash cycle compare to other players in the Jewelry & Silverware industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Lack of clear differentiation of Lao Feng Xiang B products

– To increase the profitability and margins on the products, Lao Feng Xiang B needs to provide more differentiated products than what it is currently offering in the marketplace.

High bargaining power of channel partners in Jewelry & Silverware industry

– because of the regulatory requirements in China, Lao Feng Xiang B 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 Jewelry & Silverware industry.

No frontier risks strategy

– From the 10K / annual statement of Lao Feng Xiang B, it seems that company is thinking out the frontier risks that can impact Jewelry & Silverware 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.

Increasing silos among functional specialists

– The organizational structure of Lao Feng Xiang B is dominated by functional specialists. It is not different from other players in the Jewelry & Silverware industry, but Lao Feng Xiang B needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Lao Feng Xiang B to focus more on services in the Jewelry & Silverware industry rather than just following the product oriented approach.

Slow to strategic competitive environment developments

– As Lao Feng Xiang B is one of the leading players in the Jewelry & Silverware industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Jewelry & Silverware industry in last five years.

High operating costs

– Compare to the competitors, Lao Feng Xiang B has high operating costs in the Jewelry & Silverware industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Lao Feng Xiang B lucrative customers.

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Lao Feng Xiang B Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Lao Feng Xiang B are -

Redefining models of collaboration and team work

– As explained in the weaknesses section, Lao Feng Xiang B is facing challenges because of the dominance of functional experts in the organization. Lao Feng Xiang B can utilize new technology in the field of Jewelry & Silverware industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Learning at scale

– Online learning technologies has now opened space for Lao Feng Xiang B 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.

Manufacturing automation

– Lao Feng Xiang B can use the latest technology developments to improve its manufacturing and designing process in Jewelry & Silverware 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Lao Feng Xiang B can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Lao Feng Xiang B in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Jewelry & Silverware industry, and it will provide faster access to the consumers.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Jewelry & Silverware industry, but it has also influenced the consumer preferences. Lao Feng Xiang B can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Lao Feng Xiang B 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 Lao Feng Xiang B to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Low interest rates

– Even though inflation is raising its head in most developed economies, Lao Feng Xiang B 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.

Better consumer reach

– The expansion of the 5G network will help Lao Feng Xiang B to increase its market reach. Lao Feng Xiang B 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

– Lao Feng Xiang B has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Jewelry & Silverware sector. This continuous investment in analytics has enabled Lao Feng Xiang B to build a competitive advantage using analytics. The analytics driven competitive advantage can help Lao Feng Xiang B to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Lao Feng Xiang B can use these opportunities to build new business models that can help the communities that Lao Feng Xiang B operates in. Secondly it can use opportunities from government spending in Jewelry & Silverware sector.

Creating value in data economy

– The success of analytics program of Lao Feng Xiang B has opened avenues for new revenue streams for the organization in Jewelry & Silverware industry. This can help Lao Feng Xiang B to build a more holistic ecosystem for Lao Feng Xiang B products in the Jewelry & Silverware industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Buying journey improvements

– Lao Feng Xiang B can improve the customer journey of consumers in the Jewelry & Silverware 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.

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Threats Lao Feng Xiang B External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Lao Feng Xiang B are -

Regulatory challenges

– Lao Feng Xiang B 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 Jewelry & Silverware industry regulations.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Lao Feng Xiang B in Jewelry & Silverware industry. The Jewelry & Silverware 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.

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 Lao Feng Xiang B 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 Lao Feng Xiang B in the Jewelry & Silverware sector and impact the bottomline of the organization.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Lao Feng Xiang B 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 Lao Feng Xiang B prominent markets.

Stagnating economy with rate increase

– Lao Feng Xiang B 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 Jewelry & Silverware industry.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Jewelry & Silverware industry are lowering. It can presents Lao Feng Xiang B with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Jewelry & Silverware sector.

Shortening product life cycle

– it is one of the major threat that Lao Feng Xiang B is facing in Jewelry & Silverware sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Technology acceleration in Forth Industrial Revolution

– Lao Feng Xiang B has witnessed rapid integration of technology during Covid-19 in the Jewelry & Silverware industry. As one of the leading players in the industry, Lao Feng Xiang B needs to keep up with the evolution of technology in the Jewelry & Silverware 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.

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. Lao Feng Xiang B 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 Lao Feng Xiang B 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 Jewelry & Silverware industry and other sectors.

Environmental challenges

– Lao Feng Xiang B 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. Lao Feng Xiang B can take advantage of this fund but it will also bring new competitors in the Jewelry & Silverware industry.

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.

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Weighted SWOT Analysis of Lao Feng Xiang B Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Lao Feng Xiang B 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 Lao Feng Xiang B 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 Lao Feng Xiang B 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 Lao Feng Xiang B 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 Lao Feng Xiang B needs to make to build a sustainable competitive advantage.

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