Based on various researches at Oak Spring University , Yunnan Hongxiang Yixintang Pharma is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, technology disruption, central banks are concerned over increasing inflation, there is increasing trade war between United States & China,
digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Yunnan Hongxiang Yixintang Pharma
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Yunnan Hongxiang Yixintang Pharma can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Yunnan Hongxiang Yixintang Pharma, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Yunnan Hongxiang Yixintang Pharma 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 Yunnan Hongxiang Yixintang Pharma can be done for the following purposes –
1. Strategic planning of Yunnan Hongxiang Yixintang Pharma
2. Improving business portfolio management of Yunnan Hongxiang Yixintang Pharma
3. Assessing feasibility of the new initiative in China
4. Making a Retail (Drugs) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Yunnan Hongxiang Yixintang Pharma
Strengths of Yunnan Hongxiang Yixintang Pharma | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Yunnan Hongxiang Yixintang Pharma are -
Highly skilled collaborators
– Yunnan Hongxiang Yixintang Pharma has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Retail (Drugs) industry. Secondly the value chain collaborators of Yunnan Hongxiang Yixintang Pharma have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Retail (Drugs) industry
- digital transformation varies from industry to industry. For Yunnan Hongxiang Yixintang Pharma digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Yunnan Hongxiang Yixintang Pharma 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.
Diverse revenue streams
– Yunnan Hongxiang Yixintang Pharma is present in almost all the verticals within the Retail (Drugs) industry. This has provided Yunnan Hongxiang Yixintang Pharma a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Innovation driven organization
– Yunnan Hongxiang Yixintang Pharma is one of the most innovative firm in Retail (Drugs) sector.
Ability to lead change in Retail (Drugs)
– Yunnan Hongxiang Yixintang Pharma is one of the leading players in the Retail (Drugs) industry in China. Over the years it has not only transformed the business landscape in the Retail (Drugs) industry in China but also across the existing markets. The ability to lead change has enabled Yunnan Hongxiang Yixintang Pharma in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Yunnan Hongxiang Yixintang Pharma is one of the leading players in the Retail (Drugs) 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.
Successful track record of launching new products
– Yunnan Hongxiang Yixintang Pharma has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Yunnan Hongxiang Yixintang Pharma 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.
Operational resilience
– The operational resilience strategy of Yunnan Hongxiang Yixintang Pharma comprises – understanding the underlying the factors in the Retail (Drugs) 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.
Sustainable margins compare to other players in Retail (Drugs) industry
– Yunnan Hongxiang Yixintang Pharma has clearly differentiated products in the market place. This has enabled Yunnan Hongxiang Yixintang Pharma to fetch slight price premium compare to the competitors in the Retail (Drugs) industry. The sustainable margins have also helped Yunnan Hongxiang Yixintang Pharma to invest into research and development (R&D) and innovation.
Strong track record of project management in the Retail (Drugs) industry
– Yunnan Hongxiang Yixintang Pharma is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Yunnan Hongxiang Yixintang Pharma in the Services sector have low bargaining power. Yunnan Hongxiang Yixintang Pharma has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Yunnan Hongxiang Yixintang Pharma to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Yunnan Hongxiang Yixintang Pharma 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.
Weaknesses of Yunnan Hongxiang Yixintang Pharma | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Yunnan Hongxiang Yixintang Pharma are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Yunnan Hongxiang Yixintang Pharma is slow explore the new channels of communication. These new channels of communication can help Yunnan Hongxiang Yixintang Pharma to provide better information regarding Retail (Drugs) products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of China, Yunnan Hongxiang Yixintang Pharma needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– From the 10K / annual statement of Yunnan Hongxiang Yixintang Pharma, it seems that company is thinking out the frontier risks that can impact Retail (Drugs) 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.
Employees’ less understanding of Yunnan Hongxiang Yixintang Pharma strategy
– From the outside it seems that the employees of Yunnan Hongxiang Yixintang Pharma 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.
Compensation and incentives
– The revenue per employee of Yunnan Hongxiang Yixintang Pharma is just above the Retail (Drugs) industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Aligning sales with marketing
– From the outside it seems that Yunnan Hongxiang Yixintang Pharma needs to have more collaboration between its sales team and marketing team. Sales professionals in the Retail (Drugs) industry have deep experience in developing customer relationships. Marketing department at Yunnan Hongxiang Yixintang Pharma can leverage the sales team experience to cultivate customer relationships as Yunnan Hongxiang Yixintang Pharma is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Yunnan Hongxiang Yixintang Pharma 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 (Drugs) industry using digital technology.
Products dominated business model
– Even though Yunnan Hongxiang Yixintang Pharma has some of the most successful models in the Retail (Drugs) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Yunnan Hongxiang Yixintang Pharma should strive to include more intangible value offerings along with its core products and services.
Skills based hiring in Retail (Drugs) industry
– The stress on hiring functional specialists at Yunnan Hongxiang Yixintang Pharma 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.
Lack of clear differentiation of Yunnan Hongxiang Yixintang Pharma products
– To increase the profitability and margins on the products, Yunnan Hongxiang Yixintang Pharma needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Yunnan Hongxiang Yixintang Pharma is dominated by functional specialists. It is not different from other players in the Retail (Drugs) industry, but Yunnan Hongxiang Yixintang Pharma needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Yunnan Hongxiang Yixintang Pharma to focus more on services in the Retail (Drugs) industry rather than just following the product oriented approach.
Yunnan Hongxiang Yixintang Pharma Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Yunnan Hongxiang Yixintang Pharma are -
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 Yunnan Hongxiang Yixintang Pharma 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.
Manufacturing automation
– Yunnan Hongxiang Yixintang Pharma can use the latest technology developments to improve its manufacturing and designing process in Retail (Drugs) sector. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Yunnan Hongxiang Yixintang Pharma can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Yunnan Hongxiang Yixintang Pharma can improve the customer journey of consumers in the Retail (Drugs) 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.
Developing new processes and practices
– Yunnan Hongxiang Yixintang Pharma can develop new processes and procedures in Retail (Drugs) 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Yunnan Hongxiang Yixintang Pharma 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Retail (Drugs) industry, but it has also influenced the consumer preferences. Yunnan Hongxiang Yixintang Pharma can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Yunnan Hongxiang Yixintang Pharma can use these opportunities to build new business models that can help the communities that Yunnan Hongxiang Yixintang Pharma operates in. Secondly it can use opportunities from government spending in Retail (Drugs) sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Yunnan Hongxiang Yixintang Pharma 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 (Drugs) industry, and it will provide faster access to the consumers.
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. Yunnan Hongxiang Yixintang Pharma can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Yunnan Hongxiang Yixintang Pharma has opened avenues for new revenue streams for the organization in Retail (Drugs) industry. This can help Yunnan Hongxiang Yixintang Pharma to build a more holistic ecosystem for Yunnan Hongxiang Yixintang Pharma products in the Retail (Drugs) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Yunnan Hongxiang Yixintang Pharma 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.
Leveraging digital technologies
– Yunnan Hongxiang Yixintang Pharma 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.
Threats Yunnan Hongxiang Yixintang Pharma External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Yunnan Hongxiang Yixintang Pharma are -
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.
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 Yunnan Hongxiang Yixintang Pharma.
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 Yunnan Hongxiang Yixintang Pharma business can come under increasing regulations regarding data privacy, data security, etc.
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.
Technology acceleration in Forth Industrial Revolution
– Yunnan Hongxiang Yixintang Pharma has witnessed rapid integration of technology during Covid-19 in the Retail (Drugs) industry. As one of the leading players in the industry, Yunnan Hongxiang Yixintang Pharma needs to keep up with the evolution of technology in the Retail (Drugs) 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
– Yunnan Hongxiang Yixintang Pharma 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Yunnan Hongxiang Yixintang Pharma in Retail (Drugs) industry. The Retail (Drugs) 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.
Environmental challenges
– Yunnan Hongxiang Yixintang Pharma 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. Yunnan Hongxiang Yixintang Pharma can take advantage of this fund but it will also bring new competitors in the Retail (Drugs) industry.
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. Yunnan Hongxiang Yixintang Pharma 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Yunnan Hongxiang Yixintang Pharma 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 (Drugs) sector.
Regulatory challenges
– Yunnan Hongxiang Yixintang Pharma 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 (Drugs) industry regulations.
Stagnating economy with rate increase
– Yunnan Hongxiang Yixintang Pharma 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 (Drugs) industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Retail (Drugs) industry are lowering. It can presents Yunnan Hongxiang Yixintang Pharma with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Retail (Drugs) sector.
Weighted SWOT Analysis of Yunnan Hongxiang Yixintang Pharma Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Yunnan Hongxiang Yixintang Pharma 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 Yunnan Hongxiang Yixintang Pharma 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 Yunnan Hongxiang Yixintang Pharma 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 Yunnan Hongxiang Yixintang Pharma 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 Yunnan Hongxiang Yixintang Pharma needs to make to build a sustainable competitive advantage.
