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 – talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, increasing commodity prices, increasing transportation and logistics costs, cloud computing is disrupting traditional business models, there is backlash against globalization,
central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, 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 -
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.
Analytics focus
– Shanghai Waigaoqiao Free Trade Zone 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 (Department & Discount) 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.
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.
High brand equity
– Shanghai Waigaoqiao Free Trade Zone has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Shanghai Waigaoqiao Free Trade Zone to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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.
Innovation driven organization
– Shanghai Waigaoqiao Free Trade Zone is one of the most innovative firm in Retail (Department & Discount) sector.
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.
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.
Superior customer experience
– The customer experience strategy of Shanghai Waigaoqiao Free Trade Zone in Retail (Department & Discount) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
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.
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 -
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.
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.
Slow decision making process
– As mentioned earlier in the report, Shanghai Waigaoqiao Free Trade Zone 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 (Department & Discount) industry over the last five years. Shanghai Waigaoqiao Free Trade Zone 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.
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 cash cycle compare to competitors
Shanghai Waigaoqiao Free Trade Zone has a high cash cycle compare to other players in the Retail (Department & Discount) industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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.
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.
Increasing silos among functional specialists
– The organizational structure of Shanghai Waigaoqiao Free Trade Zone is dominated by functional specialists. It is not different from other players in the Retail (Department & Discount) industry, but Shanghai Waigaoqiao Free Trade Zone needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Shanghai Waigaoqiao Free Trade Zone to focus more on services in the Retail (Department & Discount) industry rather than just following the product oriented approach.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of 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.
Products dominated business model
– Even though Shanghai Waigaoqiao Free Trade Zone has some of the most successful models in the Retail (Department & Discount) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Shanghai Waigaoqiao Free Trade Zone should strive to include more intangible value offerings along with its core products and services.
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.
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 -
Building a culture of innovation
– managers at Shanghai Waigaoqiao Free Trade Zone 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 (Department & Discount) industry.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Retail (Department & Discount) industry, but it has also influenced the consumer preferences. Shanghai Waigaoqiao Free Trade Zone can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
Better consumer reach
– The expansion of the 5G network will help Shanghai Waigaoqiao Free Trade Zone to increase its market reach. Shanghai Waigaoqiao Free Trade Zone 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.
Leveraging digital technologies
– Shanghai Waigaoqiao Free Trade Zone 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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Shanghai Waigaoqiao Free Trade Zone is facing challenges because of the dominance of functional experts in the organization. Shanghai Waigaoqiao Free Trade Zone can utilize new technology in the field of Retail (Department & Discount) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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.
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.
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.
Manufacturing automation
– Shanghai Waigaoqiao Free Trade Zone can use the latest technology developments to improve its manufacturing and designing process in Retail (Department & Discount) sector. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Threats 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 -
Easy access to finance
– Easy access to finance in Retail (Department & Discount) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Shanghai Waigaoqiao Free Trade Zone can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
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.
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.
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.
Shortening product life cycle
– it is one of the major threat that Shanghai Waigaoqiao Free Trade Zone is facing in Retail (Department & Discount) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
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.
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.
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.
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.