Shanghai Waigaoqiao Free Trade Zone (600648) SWOT Analysis / TOWS Matrix / MBA Resources
Retail (Department & Discount)
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Shanghai Waigaoqiao Free Trade Zone (China)
Based on various researches at Oak Spring University , Shanghai Waigaoqiao Free Trade Zone is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, increasing transportation and logistics costs, there is backlash against globalization, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, geopolitical disruptions, talent flight as more people leaving formal jobs,
central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Shanghai Waigaoqiao Free Trade Zone
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Shanghai Waigaoqiao Free Trade Zone can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shanghai Waigaoqiao Free Trade Zone, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shanghai Waigaoqiao Free Trade Zone 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 Shanghai Waigaoqiao Free Trade Zone can be done for the following purposes –
1. Strategic planning of Shanghai Waigaoqiao Free Trade Zone
2. Improving business portfolio management of Shanghai Waigaoqiao Free Trade Zone
3. Assessing feasibility of the new initiative in China
4. Making a Retail (Department & Discount) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Shanghai Waigaoqiao Free Trade Zone
Strengths of Shanghai Waigaoqiao Free Trade Zone | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shanghai Waigaoqiao Free Trade Zone are -
Effective Research and Development (R&D)
– Shanghai Waigaoqiao Free Trade Zone has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Shanghai Waigaoqiao Free Trade Zone staying ahead in the Retail (Department & Discount) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Shanghai Waigaoqiao Free Trade Zone 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.
Cross disciplinary teams
– Horizontal connected teams at the Shanghai Waigaoqiao Free Trade Zone 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.
Organizational Resilience of Shanghai Waigaoqiao Free Trade Zone
– The covid-19 pandemic has put organizational resilience at the centre of everthing Shanghai Waigaoqiao Free Trade Zone does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy of Shanghai Waigaoqiao Free Trade Zone comprises – understanding the underlying the factors in the Retail (Department & Discount) 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.
Highly skilled collaborators
– Shanghai Waigaoqiao Free Trade Zone has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Retail (Department & Discount) industry. Secondly the value chain collaborators of Shanghai Waigaoqiao Free Trade Zone have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Retail (Department & Discount) industry
– Shanghai Waigaoqiao Free Trade Zone has clearly differentiated products in the market place. This has enabled Shanghai Waigaoqiao Free Trade Zone to fetch slight price premium compare to the competitors in the Retail (Department & Discount) industry. The sustainable margins have also helped Shanghai Waigaoqiao Free Trade Zone to invest into research and development (R&D) and innovation.
Learning organization
- Shanghai Waigaoqiao Free Trade Zone 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 Shanghai Waigaoqiao Free Trade Zone is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Shanghai Waigaoqiao Free Trade Zone emphasize – knowledge, initiative, and innovation.
Strong track record of project management in the Retail (Department & Discount) industry
– Shanghai Waigaoqiao Free Trade Zone is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Shanghai Waigaoqiao Free Trade Zone has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Shanghai Waigaoqiao Free Trade Zone 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 Shanghai Waigaoqiao Free Trade Zone in the Services sector have low bargaining power. Shanghai Waigaoqiao Free Trade Zone has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shanghai Waigaoqiao Free Trade Zone to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Retail (Department & Discount)
– Shanghai Waigaoqiao Free Trade Zone is one of the leading players in the Retail (Department & Discount) industry in China. Over the years it has not only transformed the business landscape in the Retail (Department & Discount) industry in China but also across the existing markets. The ability to lead change has enabled Shanghai Waigaoqiao Free Trade Zone in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses of Shanghai Waigaoqiao Free Trade Zone | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shanghai Waigaoqiao Free Trade Zone are -
Employees’ less understanding of Shanghai Waigaoqiao Free Trade Zone strategy
– From the outside it seems that the employees of Shanghai Waigaoqiao Free Trade Zone 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
– Shanghai Waigaoqiao Free Trade Zone 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.
Capital Spending Reduction
– Even during the low interest decade, Shanghai Waigaoqiao Free Trade Zone 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 (Department & Discount) industry using digital technology.
Low market penetration in new markets
– Outside its home market of China, Shanghai Waigaoqiao Free Trade Zone needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Shanghai Waigaoqiao Free Trade Zone is slow explore the new channels of communication. These new channels of communication can help Shanghai Waigaoqiao Free Trade Zone to provide better information regarding Retail (Department & Discount) products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– From the 10K / annual statement of Shanghai Waigaoqiao Free Trade Zone, it seems that company is thinking out the frontier risks that can impact Retail (Department & Discount) 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.
Slow to strategic competitive environment developments
– As Shanghai Waigaoqiao Free Trade Zone is one of the leading players in the Retail (Department & Discount) industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Retail (Department & Discount) industry in last five years.
High dependence on Shanghai Waigaoqiao Free Trade Zone ‘s star products
– The top 2 products and services of Shanghai Waigaoqiao Free Trade Zone still accounts for major business revenue. This dependence on star products in Retail (Department & Discount) industry has resulted into insufficient focus on developing new products, even though Shanghai Waigaoqiao Free Trade Zone has relatively successful track record of launching new products.
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 Shanghai Waigaoqiao Free Trade Zone supply chain. Even after few cautionary changes, Shanghai Waigaoqiao Free Trade Zone is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Shanghai Waigaoqiao Free Trade Zone vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Shanghai Waigaoqiao Free Trade Zone products
– To increase the profitability and margins on the products, Shanghai Waigaoqiao Free Trade Zone needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative at Shanghai Waigaoqiao Free Trade Zone, in the dynamic environment of Retail (Department & Discount) industry it has struggled to respond to the nimble upstart competition. Shanghai Waigaoqiao Free Trade Zone has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Shanghai Waigaoqiao Free Trade Zone Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Shanghai Waigaoqiao Free Trade Zone are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Shanghai Waigaoqiao Free Trade Zone to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Shanghai Waigaoqiao Free Trade Zone to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Shanghai Waigaoqiao Free Trade Zone has opened avenues for new revenue streams for the organization in Retail (Department & Discount) industry. This can help Shanghai Waigaoqiao Free Trade Zone to build a more holistic ecosystem for Shanghai Waigaoqiao Free Trade Zone products in the Retail (Department & Discount) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Shanghai Waigaoqiao Free Trade Zone 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.
Buying journey improvements
– Shanghai Waigaoqiao Free Trade Zone can improve the customer journey of consumers in the Retail (Department & Discount) industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Shanghai Waigaoqiao Free Trade Zone 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 (Department & Discount) industry, and it will provide faster access to the consumers.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Shanghai Waigaoqiao Free Trade Zone 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 Shanghai Waigaoqiao Free Trade Zone to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Shanghai Waigaoqiao Free Trade Zone 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.
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. Shanghai Waigaoqiao Free Trade Zone can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Shanghai Waigaoqiao Free Trade Zone 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, Shanghai Waigaoqiao Free Trade Zone can use these opportunities to build new business models that can help the communities that Shanghai Waigaoqiao Free Trade Zone operates in. Secondly it can use opportunities from government spending in Retail (Department & Discount) sector.
Using analytics as competitive advantage
– Shanghai Waigaoqiao Free Trade Zone has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Retail (Department & Discount) sector. This continuous investment in analytics has enabled Shanghai Waigaoqiao Free Trade Zone to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shanghai Waigaoqiao Free Trade Zone 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
– Shanghai Waigaoqiao Free Trade Zone can develop new processes and procedures in Retail (Department & Discount) 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.
Use of Bitcoin and other crypto currencies for transactions in Retail (Department & Discount) industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Shanghai Waigaoqiao Free Trade Zone in the Retail (Department & Discount) industry. Now Shanghai Waigaoqiao Free Trade Zone can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Shanghai Waigaoqiao Free Trade Zone External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Shanghai Waigaoqiao Free Trade Zone are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Retail (Department & Discount) industry are lowering. It can presents Shanghai Waigaoqiao Free Trade Zone with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Retail (Department & Discount) sector.
Increasing wage structure of Shanghai Waigaoqiao Free Trade Zone
– 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 Shanghai Waigaoqiao Free Trade Zone.
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 Shanghai Waigaoqiao Free Trade Zone business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Shanghai Waigaoqiao Free Trade Zone 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 (Department & Discount) industry and other sectors.
Environmental challenges
– Shanghai Waigaoqiao Free Trade Zone 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. Shanghai Waigaoqiao Free Trade Zone can take advantage of this fund but it will also bring new competitors in the Retail (Department & Discount) industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Shanghai Waigaoqiao Free Trade Zone 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 Shanghai Waigaoqiao Free Trade Zone prominent markets.
Regulatory challenges
– Shanghai Waigaoqiao Free Trade Zone 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 (Department & Discount) industry regulations.
High dependence on third party suppliers
– Shanghai Waigaoqiao Free Trade Zone 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Shanghai Waigaoqiao Free Trade Zone 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 (Department & Discount) sector.
Technology acceleration in Forth Industrial Revolution
– Shanghai Waigaoqiao Free Trade Zone has witnessed rapid integration of technology during Covid-19 in the Retail (Department & Discount) industry. As one of the leading players in the industry, Shanghai Waigaoqiao Free Trade Zone needs to keep up with the evolution of technology in the Retail (Department & Discount) 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.
Stagnating economy with rate increase
– Shanghai Waigaoqiao Free Trade Zone 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 (Department & Discount) industry.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Shanghai Waigaoqiao Free Trade Zone in the Retail (Department & Discount) 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. Shanghai Waigaoqiao Free Trade Zone needs to understand the core reasons impacting the Retail (Department & Discount) industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Shanghai Waigaoqiao Free Trade Zone Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Shanghai Waigaoqiao Free Trade Zone 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 Shanghai Waigaoqiao Free Trade Zone 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 Shanghai Waigaoqiao Free Trade Zone 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 Shanghai Waigaoqiao Free Trade Zone 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 Shanghai Waigaoqiao Free Trade Zone needs to make to build a sustainable competitive advantage.