Shanghai Waigaoqiao Free Trade Zone B (900912) 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 B (China)
Based on various researches at Oak Spring University , Shanghai Waigaoqiao Free Trade Zone B is operating in a macro-environment that has been destablized by – technology disruption, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, talent flight as more people leaving formal jobs,
increasing household debt because of falling income levels, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Shanghai Waigaoqiao Free Trade Zone B
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Shanghai Waigaoqiao Free Trade Zone B can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shanghai Waigaoqiao Free Trade Zone B, 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 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.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Shanghai Waigaoqiao Free Trade Zone B can be done for the following purposes –
1. Strategic planning of Shanghai Waigaoqiao Free Trade Zone B
2. Improving business portfolio management of Shanghai Waigaoqiao Free Trade Zone B
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 B
Strengths of Shanghai Waigaoqiao Free Trade Zone B | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shanghai Waigaoqiao Free Trade Zone B are -
Training and development
– Shanghai Waigaoqiao Free Trade Zone B 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.
Cross disciplinary teams
– Horizontal connected teams at the Shanghai Waigaoqiao Free Trade Zone 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.
Operational resilience
– The operational resilience strategy of Shanghai Waigaoqiao Free Trade Zone B 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.
Successful track record of launching new products
– Shanghai Waigaoqiao Free Trade Zone B has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Shanghai Waigaoqiao Free Trade Zone 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.
Innovation driven organization
– Shanghai Waigaoqiao Free Trade Zone B is one of the most innovative firm in Retail (Department & Discount) sector.
Sustainable margins compare to other players in Retail (Department & Discount) industry
– Shanghai Waigaoqiao Free Trade Zone B has clearly differentiated products in the market place. This has enabled Shanghai Waigaoqiao Free Trade Zone B 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 B to invest into research and development (R&D) and innovation.
Strong track record of project management in the Retail (Department & Discount) industry
– Shanghai Waigaoqiao Free Trade Zone 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.
Analytics focus
– Shanghai Waigaoqiao Free Trade Zone 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 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.
Ability to recruit top talent
– Shanghai Waigaoqiao Free Trade Zone B is one of the leading players in the Retail (Department & Discount) 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.
Effective Research and Development (R&D)
– Shanghai Waigaoqiao Free Trade Zone B 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 B 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.
Highly skilled collaborators
– Shanghai Waigaoqiao Free Trade Zone B 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 B have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Shanghai Waigaoqiao Free Trade Zone B 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 B to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of Shanghai Waigaoqiao Free Trade Zone B | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shanghai Waigaoqiao Free Trade Zone B are -
Employees’ less understanding of Shanghai Waigaoqiao Free Trade Zone B strategy
– From the outside it seems that the employees of Shanghai Waigaoqiao Free Trade Zone 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.
Skills based hiring in Retail (Department & Discount) industry
– The stress on hiring functional specialists at Shanghai Waigaoqiao Free Trade Zone B 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.
Increasing silos among functional specialists
– The organizational structure of Shanghai Waigaoqiao Free Trade Zone B is dominated by functional specialists. It is not different from other players in the Retail (Department & Discount) industry, but Shanghai Waigaoqiao Free Trade Zone B 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 B 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 B supply chain. Even after few cautionary changes, Shanghai Waigaoqiao Free Trade Zone B 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 B vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Shanghai Waigaoqiao Free Trade Zone 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.
Ability to respond to the competition
– As the decision making is very deliberative at Shanghai Waigaoqiao Free Trade Zone B, in the dynamic environment of Retail (Department & Discount) industry it has struggled to respond to the nimble upstart competition. Shanghai Waigaoqiao Free Trade Zone B has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners in Retail (Department & Discount) industry
– because of the regulatory requirements in China, Shanghai Waigaoqiao Free Trade Zone 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 Retail (Department & Discount) industry.
High operating costs
– Compare to the competitors, Shanghai Waigaoqiao Free Trade Zone B has high operating costs in the Retail (Department & Discount) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Shanghai Waigaoqiao Free Trade Zone B lucrative customers.
Lack of clear differentiation of Shanghai Waigaoqiao Free Trade Zone B products
– To increase the profitability and margins on the products, Shanghai Waigaoqiao Free Trade Zone B needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of China, Shanghai Waigaoqiao Free Trade Zone B needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Shanghai Waigaoqiao Free Trade Zone B 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.
Shanghai Waigaoqiao Free Trade Zone B Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Shanghai Waigaoqiao Free Trade Zone B are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Shanghai Waigaoqiao Free Trade Zone B is facing challenges because of the dominance of functional experts in the organization. Shanghai Waigaoqiao Free Trade Zone B 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.
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 B 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 B to hire the very best people irrespective of their geographical location.
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 B 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.
Using analytics as competitive advantage
– Shanghai Waigaoqiao Free Trade Zone B 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 B to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shanghai Waigaoqiao Free Trade Zone B to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Shanghai Waigaoqiao Free Trade Zone 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.
Creating value in data economy
– The success of analytics program of Shanghai Waigaoqiao Free Trade Zone B has opened avenues for new revenue streams for the organization in Retail (Department & Discount) industry. This can help Shanghai Waigaoqiao Free Trade Zone B to build a more holistic ecosystem for Shanghai Waigaoqiao Free Trade Zone B products in the Retail (Department & Discount) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Shanghai Waigaoqiao Free Trade Zone 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.
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 B can use these opportunities to build new business models that can help the communities that Shanghai Waigaoqiao Free Trade Zone B operates in. Secondly it can use opportunities from government spending in Retail (Department & Discount) sector.
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 B can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Shanghai Waigaoqiao Free Trade Zone B 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.
Buying journey improvements
– Shanghai Waigaoqiao Free Trade Zone B 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.
Leveraging digital technologies
– Shanghai Waigaoqiao Free Trade Zone B 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Shanghai Waigaoqiao Free Trade Zone 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 Retail (Department & Discount) industry, and it will provide faster access to the consumers.
Threats Shanghai Waigaoqiao Free Trade Zone B External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Shanghai Waigaoqiao Free Trade Zone B are -
Increasing wage structure of Shanghai Waigaoqiao Free Trade Zone B
– 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 B.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Shanghai Waigaoqiao Free Trade Zone B in Retail (Department & Discount) industry. The Retail (Department & Discount) 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.
Stagnating economy with rate increase
– Shanghai Waigaoqiao Free Trade Zone 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 Retail (Department & Discount) industry.
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 B can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Shanghai Waigaoqiao Free Trade Zone B.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Shanghai Waigaoqiao Free Trade Zone 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 Shanghai Waigaoqiao Free Trade Zone B prominent markets.
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 B in the Retail (Department & Discount) sector and impact the bottomline of the organization.
Environmental challenges
– Shanghai Waigaoqiao Free Trade Zone 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. Shanghai Waigaoqiao Free Trade Zone B can take advantage of this fund but it will also bring new competitors in the Retail (Department & Discount) industry.
Technology acceleration in Forth Industrial Revolution
– Shanghai Waigaoqiao Free Trade Zone B 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 B 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.
High dependence on third party suppliers
– Shanghai Waigaoqiao Free Trade Zone B 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.
Consumer confidence and its impact on Shanghai Waigaoqiao Free Trade Zone 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 Retail (Department & Discount) industry and other sectors.
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. Shanghai Waigaoqiao Free Trade Zone 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.
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 B business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Shanghai Waigaoqiao Free Trade Zone B 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 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 Shanghai Waigaoqiao Free Trade Zone 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 Shanghai Waigaoqiao Free Trade Zone 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 Shanghai Waigaoqiao Free Trade Zone 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 Shanghai Waigaoqiao Free Trade Zone B needs to make to build a sustainable competitive advantage.