Anhui Xinhua Media (601801) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Anhui Xinhua Media (China)

Based on various researches at Oak Spring University , Anhui Xinhua Media is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, there is backlash against globalization, increasing government debt because of Covid-19 spendings, wage bills are increasing, increasing energy prices, technology disruption, etc

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Introduction to SWOT Analysis of Anhui Xinhua Media

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Anhui Xinhua Media can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Anhui Xinhua Media, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Anhui Xinhua Media 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 Anhui Xinhua Media can be done for the following purposes –
1. Strategic planning of Anhui Xinhua Media
2. Improving business portfolio management of Anhui Xinhua Media
3. Assessing feasibility of the new initiative in China
4. Making a Retail (Specialty) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Anhui Xinhua Media

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Strengths of Anhui Xinhua Media | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Anhui Xinhua Media are -

Training and development

– Anhui Xinhua Media 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.

Strong track record of project management in the Retail (Specialty) industry

– Anhui Xinhua Media is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

High switching costs

– The high switching costs that Anhui Xinhua Media 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.

Successful track record of launching new products

– Anhui Xinhua Media has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Anhui Xinhua Media 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.

High brand equity

– Anhui Xinhua Media has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Anhui Xinhua Media to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Learning organization

- Anhui Xinhua Media 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 Anhui Xinhua Media is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Anhui Xinhua Media emphasize – knowledge, initiative, and innovation.

Cross disciplinary teams

– Horizontal connected teams at the Anhui Xinhua Media 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.

Superior customer experience

– The customer experience strategy of Anhui Xinhua Media in Retail (Specialty) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Sustainable margins compare to other players in Retail (Specialty) industry

– Anhui Xinhua Media has clearly differentiated products in the market place. This has enabled Anhui Xinhua Media to fetch slight price premium compare to the competitors in the Retail (Specialty) industry. The sustainable margins have also helped Anhui Xinhua Media to invest into research and development (R&D) and innovation.

Ability to recruit top talent

– Anhui Xinhua Media is one of the leading players in the Retail (Specialty) 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.

Low bargaining power of suppliers

– Suppliers of Anhui Xinhua Media in the Services sector have low bargaining power. Anhui Xinhua Media has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Anhui Xinhua Media to manage not only supply disruptions but also source products at highly competitive prices.

Digital Transformation in Retail (Specialty) industry

- digital transformation varies from industry to industry. For Anhui Xinhua Media digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Anhui Xinhua Media has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.

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Weaknesses of Anhui Xinhua Media | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Anhui Xinhua Media are -

Lack of clear differentiation of Anhui Xinhua Media products

– To increase the profitability and margins on the products, Anhui Xinhua Media needs to provide more differentiated products than what it is currently offering in the marketplace.

Increasing silos among functional specialists

– The organizational structure of Anhui Xinhua Media is dominated by functional specialists. It is not different from other players in the Retail (Specialty) industry, but Anhui Xinhua Media needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Anhui Xinhua Media to focus more on services in the Retail (Specialty) industry rather than just following the product oriented approach.

Employees’ less understanding of Anhui Xinhua Media strategy

– From the outside it seems that the employees of Anhui Xinhua Media 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.

Capital Spending Reduction

– Even during the low interest decade, Anhui Xinhua Media 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 (Specialty) industry using digital technology.

Interest costs

– Compare to the competition, Anhui Xinhua Media has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.

Products dominated business model

– Even though Anhui Xinhua Media has some of the most successful models in the Retail (Specialty) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Anhui Xinhua Media should strive to include more intangible value offerings along with its core products and services.

High dependence on Anhui Xinhua Media ‘s star products

– The top 2 products and services of Anhui Xinhua Media still accounts for major business revenue. This dependence on star products in Retail (Specialty) industry has resulted into insufficient focus on developing new products, even though Anhui Xinhua Media has relatively successful track record of launching new products.

Slow to strategic competitive environment developments

– As Anhui Xinhua Media is one of the leading players in the Retail (Specialty) industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Retail (Specialty) industry in last five years.

High operating costs

– Compare to the competitors, Anhui Xinhua Media has high operating costs in the Retail (Specialty) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Anhui Xinhua Media lucrative customers.

Ability to respond to the competition

– As the decision making is very deliberative at Anhui Xinhua Media, in the dynamic environment of Retail (Specialty) industry it has struggled to respond to the nimble upstart competition. Anhui Xinhua Media has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Low market penetration in new markets

– Outside its home market of China, Anhui Xinhua Media needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

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Anhui Xinhua Media Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Anhui Xinhua Media are -

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Anhui Xinhua Media can use these opportunities to build new business models that can help the communities that Anhui Xinhua Media operates in. Secondly it can use opportunities from government spending in Retail (Specialty) sector.

Developing new processes and practices

– Anhui Xinhua Media can develop new processes and procedures in Retail (Specialty) 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.

Using analytics as competitive advantage

– Anhui Xinhua Media has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Retail (Specialty) sector. This continuous investment in analytics has enabled Anhui Xinhua Media to build a competitive advantage using analytics. The analytics driven competitive advantage can help Anhui Xinhua Media to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Use of Bitcoin and other crypto currencies for transactions in Retail (Specialty) industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Anhui Xinhua Media in the Retail (Specialty) industry. Now Anhui Xinhua Media can target international markets with far fewer capital restrictions requirements than the existing system.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Anhui Xinhua Media 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 Anhui Xinhua Media to hire the very best people irrespective of their geographical location.

Loyalty marketing

– Anhui Xinhua Media 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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Retail (Specialty) industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Anhui Xinhua Media can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Anhui Xinhua Media can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.

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. Anhui Xinhua Media can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Reforming the budgeting process

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

Better consumer reach

– The expansion of the 5G network will help Anhui Xinhua Media to increase its market reach. Anhui Xinhua Media 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.

Creating value in data economy

– The success of analytics program of Anhui Xinhua Media has opened avenues for new revenue streams for the organization in Retail (Specialty) industry. This can help Anhui Xinhua Media to build a more holistic ecosystem for Anhui Xinhua Media products in the Retail (Specialty) industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Buying journey improvements

– Anhui Xinhua Media can improve the customer journey of consumers in the Retail (Specialty) 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.

Harnessing reconfiguration of the global supply chains

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

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Threats Anhui Xinhua Media External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Anhui Xinhua Media are -

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Anhui Xinhua Media in Retail (Specialty) industry. The Retail (Specialty) 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.

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.

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 Anhui Xinhua Media in the Retail (Specialty) sector and impact the bottomline of the organization.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Retail (Specialty) industry are lowering. It can presents Anhui Xinhua Media with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Retail (Specialty) sector.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Anhui Xinhua Media 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 (Specialty) sector.

Regulatory challenges

– Anhui Xinhua Media 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 (Specialty) industry regulations.

Technology acceleration in Forth Industrial Revolution

– Anhui Xinhua Media has witnessed rapid integration of technology during Covid-19 in the Retail (Specialty) industry. As one of the leading players in the industry, Anhui Xinhua Media needs to keep up with the evolution of technology in the Retail (Specialty) 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 Anhui Xinhua Media

– 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 Anhui Xinhua Media.

Shortening product life cycle

– it is one of the major threat that Anhui Xinhua Media is facing in Retail (Specialty) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

High dependence on third party suppliers

– Anhui Xinhua Media 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.

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. Anhui Xinhua Media needs to understand the core reasons impacting the Retail (Specialty) industry. This will help it in building a better workplace.

Environmental challenges

– Anhui Xinhua Media 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. Anhui Xinhua Media can take advantage of this fund but it will also bring new competitors in the Retail (Specialty) 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 Anhui Xinhua Media Template, Example

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

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