SWOT Analysis / TOWS Matrix for Guangzhou Restaurant (China)
Based on various researches at Oak Spring University , Guangzhou Restaurant is operating in a macro-environment that has been destablized by – increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, increasing commodity prices,
cloud computing is disrupting traditional business models, technology disruption, etc
Introduction to SWOT Analysis of Guangzhou Restaurant
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Guangzhou Restaurant can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Guangzhou Restaurant, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Guangzhou Restaurant 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 Guangzhou Restaurant can be done for the following purposes –
1. Strategic planning of Guangzhou Restaurant
2. Improving business portfolio management of Guangzhou Restaurant
3. Assessing feasibility of the new initiative in China
4. Making a Food Processing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Guangzhou Restaurant
Strengths of Guangzhou Restaurant | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Guangzhou Restaurant are -
High switching costs
– The high switching costs that Guangzhou Restaurant 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.
Effective Research and Development (R&D)
– Guangzhou Restaurant has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Guangzhou Restaurant staying ahead in the Food Processing industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Guangzhou Restaurant
– The covid-19 pandemic has put organizational resilience at the centre of everthing Guangzhou Restaurant does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy of Guangzhou Restaurant comprises – understanding the underlying the factors in the Food Processing 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.
Low bargaining power of suppliers
– Suppliers of Guangzhou Restaurant in the Consumer/Non-Cyclical sector have low bargaining power. Guangzhou Restaurant has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Guangzhou Restaurant to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Guangzhou Restaurant has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Guangzhou Restaurant to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Guangzhou Restaurant has one of the best training and development program in Consumer/Non-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.
Sustainable margins compare to other players in Food Processing industry
– Guangzhou Restaurant has clearly differentiated products in the market place. This has enabled Guangzhou Restaurant to fetch slight price premium compare to the competitors in the Food Processing industry. The sustainable margins have also helped Guangzhou Restaurant to invest into research and development (R&D) and innovation.
Analytics focus
– Guangzhou Restaurant 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 Food Processing 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.
Highly skilled collaborators
– Guangzhou Restaurant has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Food Processing industry. Secondly the value chain collaborators of Guangzhou Restaurant have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Guangzhou Restaurant has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Guangzhou Restaurant 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.
Digital Transformation in Food Processing industry
- digital transformation varies from industry to industry. For Guangzhou Restaurant digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Guangzhou Restaurant 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.
Weaknesses of Guangzhou Restaurant | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Guangzhou Restaurant are -
High dependence on Guangzhou Restaurant ‘s star products
– The top 2 products and services of Guangzhou Restaurant still accounts for major business revenue. This dependence on star products in Food Processing industry has resulted into insufficient focus on developing new products, even though Guangzhou Restaurant has relatively successful track record of launching new products.
Skills based hiring in Food Processing industry
– The stress on hiring functional specialists at Guangzhou Restaurant 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.
Workers concerns about automation
– As automation is fast increasing in the Food Processing industry, Guangzhou Restaurant needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Capital Spending Reduction
– Even during the low interest decade, Guangzhou Restaurant 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 Food Processing industry using digital technology.
Need for greater diversity
– Guangzhou Restaurant 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.
Compensation and incentives
– The revenue per employee of Guangzhou Restaurant is just above the Food Processing 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.
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 Guangzhou Restaurant supply chain. Even after few cautionary changes, Guangzhou Restaurant is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Guangzhou Restaurant vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative at Guangzhou Restaurant, in the dynamic environment of Food Processing industry it has struggled to respond to the nimble upstart competition. Guangzhou Restaurant has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Guangzhou Restaurant has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Food Processing industry over the last five years. Guangzhou Restaurant 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.
No frontier risks strategy
– From the 10K / annual statement of Guangzhou Restaurant, it seems that company is thinking out the frontier risks that can impact Food Processing 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.
Increasing silos among functional specialists
– The organizational structure of Guangzhou Restaurant is dominated by functional specialists. It is not different from other players in the Food Processing industry, but Guangzhou Restaurant needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Guangzhou Restaurant to focus more on services in the Food Processing industry rather than just following the product oriented approach.
Guangzhou Restaurant Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Guangzhou Restaurant are -
Use of Bitcoin and other crypto currencies for transactions in Food Processing industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Guangzhou Restaurant in the Food Processing industry. Now Guangzhou Restaurant can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Guangzhou Restaurant in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Food Processing industry, and it will provide faster access to the consumers.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Guangzhou Restaurant 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 Guangzhou Restaurant to increase its market reach. Guangzhou Restaurant 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.
Manufacturing automation
– Guangzhou Restaurant can use the latest technology developments to improve its manufacturing and designing process in Food Processing 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Guangzhou Restaurant is facing challenges because of the dominance of functional experts in the organization. Guangzhou Restaurant can utilize new technology in the field of Food Processing industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Building a culture of innovation
– managers at Guangzhou Restaurant 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 Food Processing industry.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Food Processing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Guangzhou Restaurant 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. Guangzhou Restaurant 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.
Leveraging digital technologies
– Guangzhou Restaurant 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.
Learning at scale
– Online learning technologies has now opened space for Guangzhou Restaurant 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.
Using analytics as competitive advantage
– Guangzhou Restaurant has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Food Processing sector. This continuous investment in analytics has enabled Guangzhou Restaurant to build a competitive advantage using analytics. The analytics driven competitive advantage can help Guangzhou Restaurant to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Guangzhou Restaurant can develop new processes and procedures in Food Processing 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.
Creating value in data economy
– The success of analytics program of Guangzhou Restaurant has opened avenues for new revenue streams for the organization in Food Processing industry. This can help Guangzhou Restaurant to build a more holistic ecosystem for Guangzhou Restaurant products in the Food Processing industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats Guangzhou Restaurant External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Guangzhou Restaurant are -
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 Guangzhou Restaurant.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Guangzhou Restaurant may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Food Processing sector.
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 Guangzhou Restaurant in the Food Processing sector and impact the bottomline of the organization.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Guangzhou Restaurant in Food Processing industry. The Food Processing 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Guangzhou Restaurant 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 Guangzhou Restaurant prominent markets.
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. Guangzhou Restaurant 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.
Increasing wage structure of Guangzhou Restaurant
– 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 Guangzhou Restaurant.
Stagnating economy with rate increase
– Guangzhou Restaurant 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 Food Processing industry.
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 Guangzhou Restaurant business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Guangzhou Restaurant 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 Food Processing industry and other sectors.
Environmental challenges
– Guangzhou Restaurant 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. Guangzhou Restaurant can take advantage of this fund but it will also bring new competitors in the Food Processing industry.
High dependence on third party suppliers
– Guangzhou Restaurant 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.
Weighted SWOT Analysis of Guangzhou Restaurant Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Guangzhou Restaurant 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 Guangzhou Restaurant 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 Guangzhou Restaurant 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 Guangzhou Restaurant 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 Guangzhou Restaurant needs to make to build a sustainable competitive advantage.