SWOT Analysis / TOWS Matrix for Zhejiang Orient (China)
Based on various researches at Oak Spring University , Zhejiang Orient is operating in a macro-environment that has been destablized by – there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, increasing household debt because of falling income levels,
increasing energy prices, cloud computing is disrupting traditional business models, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Zhejiang Orient can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Zhejiang Orient, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Zhejiang Orient 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 Zhejiang Orient can be done for the following purposes –
1. Strategic planning of Zhejiang Orient
2. Improving business portfolio management of Zhejiang Orient
3. Assessing feasibility of the new initiative in China
4. Making a Apparel/Accessories sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Zhejiang Orient
Strengths of Zhejiang Orient | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Zhejiang Orient are -
Digital Transformation in Apparel/Accessories industry
- digital transformation varies from industry to industry. For Zhejiang Orient digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Zhejiang Orient 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.
Organizational Resilience of Zhejiang Orient
– The covid-19 pandemic has put organizational resilience at the centre of everthing Zhejiang Orient does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Zhejiang Orient is present in almost all the verticals within the Apparel/Accessories industry. This has provided Zhejiang Orient 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.
Strong track record of project management in the Apparel/Accessories industry
– Zhejiang Orient is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Zhejiang Orient has one of the best training and development program in Consumer Cyclical 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.
High brand equity
– Zhejiang Orient has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Zhejiang Orient to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Zhejiang Orient is one of the most innovative firm in Apparel/Accessories sector.
Low bargaining power of suppliers
– Suppliers of Zhejiang Orient in the Consumer Cyclical sector have low bargaining power. Zhejiang Orient has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Zhejiang Orient to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Zhejiang Orient 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 Zhejiang Orient is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Zhejiang Orient emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Zhejiang Orient is one of the leading players in the Apparel/Accessories 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.
Cross disciplinary teams
– Horizontal connected teams at the Zhejiang Orient 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
– Zhejiang Orient has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Apparel/Accessories industry. Secondly the value chain collaborators of Zhejiang Orient have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses of Zhejiang Orient | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Zhejiang Orient are -
Lack of clear differentiation of Zhejiang Orient products
– To increase the profitability and margins on the products, Zhejiang Orient needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, Zhejiang Orient has high operating costs in the Apparel/Accessories industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Zhejiang Orient lucrative customers.
Interest costs
– Compare to the competition, Zhejiang Orient 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.
Aligning sales with marketing
– From the outside it seems that Zhejiang Orient needs to have more collaboration between its sales team and marketing team. Sales professionals in the Apparel/Accessories industry have deep experience in developing customer relationships. Marketing department at Zhejiang Orient can leverage the sales team experience to cultivate customer relationships as Zhejiang Orient is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Zhejiang Orient has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Apparel/Accessories industry over the last five years. Zhejiang Orient 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.
Skills based hiring in Apparel/Accessories industry
– The stress on hiring functional specialists at Zhejiang Orient 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.
Capital Spending Reduction
– Even during the low interest decade, Zhejiang Orient 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 Apparel/Accessories industry using digital technology.
Ability to respond to the competition
– As the decision making is very deliberative at Zhejiang Orient, in the dynamic environment of Apparel/Accessories industry it has struggled to respond to the nimble upstart competition. Zhejiang Orient has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Zhejiang Orient 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.
Products dominated business model
– Even though Zhejiang Orient has some of the most successful models in the Apparel/Accessories industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Zhejiang Orient should strive to include more intangible value offerings along with its core products and services.
High dependence on Zhejiang Orient ‘s star products
– The top 2 products and services of Zhejiang Orient still accounts for major business revenue. This dependence on star products in Apparel/Accessories industry has resulted into insufficient focus on developing new products, even though Zhejiang Orient has relatively successful track record of launching new products.
Zhejiang Orient Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Zhejiang Orient are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Zhejiang Orient in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Apparel/Accessories industry, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Zhejiang Orient to increase its market reach. Zhejiang Orient 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Zhejiang Orient 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.
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. Zhejiang Orient can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Apparel/Accessories industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Zhejiang Orient 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. Zhejiang Orient 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.
Building a culture of innovation
– managers at Zhejiang Orient 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 Apparel/Accessories industry.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Zhejiang Orient can use these opportunities to build new business models that can help the communities that Zhejiang Orient operates in. Secondly it can use opportunities from government spending in Apparel/Accessories sector.
Using analytics as competitive advantage
– Zhejiang Orient has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Apparel/Accessories sector. This continuous investment in analytics has enabled Zhejiang Orient to build a competitive advantage using analytics. The analytics driven competitive advantage can help Zhejiang Orient to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Zhejiang Orient can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Zhejiang Orient is facing challenges because of the dominance of functional experts in the organization. Zhejiang Orient can utilize new technology in the field of Apparel/Accessories industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Creating value in data economy
– The success of analytics program of Zhejiang Orient has opened avenues for new revenue streams for the organization in Apparel/Accessories industry. This can help Zhejiang Orient to build a more holistic ecosystem for Zhejiang Orient products in the Apparel/Accessories industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Use of Bitcoin and other crypto currencies for transactions in Apparel/Accessories industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Zhejiang Orient in the Apparel/Accessories industry. Now Zhejiang Orient can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Zhejiang Orient 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.
Threats Zhejiang Orient External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Zhejiang Orient are -
High dependence on third party suppliers
– Zhejiang Orient 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.
Increasing wage structure of Zhejiang Orient
– 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 Zhejiang Orient.
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. Zhejiang Orient 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.
Environmental challenges
– Zhejiang Orient 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. Zhejiang Orient can take advantage of this fund but it will also bring new competitors in the Apparel/Accessories 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.
Technology acceleration in Forth Industrial Revolution
– Zhejiang Orient has witnessed rapid integration of technology during Covid-19 in the Apparel/Accessories industry. As one of the leading players in the industry, Zhejiang Orient needs to keep up with the evolution of technology in the Apparel/Accessories 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Zhejiang Orient in Apparel/Accessories industry. The Apparel/Accessories 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.
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 Zhejiang Orient in the Apparel/Accessories sector and impact the bottomline of the organization.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Zhejiang Orient needs to understand the core reasons impacting the Apparel/Accessories industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Zhejiang Orient may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Apparel/Accessories sector.
Stagnating economy with rate increase
– Zhejiang Orient 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 Apparel/Accessories industry.
Consumer confidence and its impact on Zhejiang Orient 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 Apparel/Accessories industry and other sectors.
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.
Weighted SWOT Analysis of Zhejiang Orient Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Zhejiang Orient 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 Zhejiang Orient 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 Zhejiang Orient 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 Zhejiang Orient 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 Zhejiang Orient needs to make to build a sustainable competitive advantage.
