SWOT Analysis / TOWS Matrix for Hebei Hengshui Laobaigan (China)
Based on various researches at Oak Spring University , Hebei Hengshui Laobaigan is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, increasing energy prices, technology disruption, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, geopolitical disruptions,
digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Hebei Hengshui Laobaigan
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Hebei Hengshui Laobaigan can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hebei Hengshui Laobaigan, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hebei Hengshui Laobaigan 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 Hebei Hengshui Laobaigan can be done for the following purposes –
1. Strategic planning of Hebei Hengshui Laobaigan
2. Improving business portfolio management of Hebei Hengshui Laobaigan
3. Assessing feasibility of the new initiative in China
4. Making a Beverages (Alcoholic) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hebei Hengshui Laobaigan
Strengths of Hebei Hengshui Laobaigan | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hebei Hengshui Laobaigan are -
Superior customer experience
– The customer experience strategy of Hebei Hengshui Laobaigan in Beverages (Alcoholic) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Hebei Hengshui Laobaigan is present in almost all the verticals within the Beverages (Alcoholic) industry. This has provided Hebei Hengshui Laobaigan 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.
Operational resilience
– The operational resilience strategy of Hebei Hengshui Laobaigan comprises – understanding the underlying the factors in the Beverages (Alcoholic) 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.
Ability to recruit top talent
– Hebei Hengshui Laobaigan is one of the leading players in the Beverages (Alcoholic) 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.
High switching costs
– The high switching costs that Hebei Hengshui Laobaigan 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.
Sustainable margins compare to other players in Beverages (Alcoholic) industry
– Hebei Hengshui Laobaigan has clearly differentiated products in the market place. This has enabled Hebei Hengshui Laobaigan to fetch slight price premium compare to the competitors in the Beverages (Alcoholic) industry. The sustainable margins have also helped Hebei Hengshui Laobaigan to invest into research and development (R&D) and innovation.
High brand equity
– Hebei Hengshui Laobaigan has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hebei Hengshui Laobaigan to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Hebei Hengshui Laobaigan has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Hebei Hengshui Laobaigan staying ahead in the Beverages (Alcoholic) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management in the Beverages (Alcoholic) industry
– Hebei Hengshui Laobaigan is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Hebei Hengshui Laobaigan 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 Hebei Hengshui Laobaigan is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Hebei Hengshui Laobaigan emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Hebei Hengshui Laobaigan in the Consumer/Non-Cyclical sector have low bargaining power. Hebei Hengshui Laobaigan has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hebei Hengshui Laobaigan to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Hebei Hengshui Laobaigan 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 Hebei Hengshui Laobaigan | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hebei Hengshui Laobaigan are -
Low market penetration in new markets
– Outside its home market of China, Hebei Hengshui Laobaigan needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Hebei Hengshui Laobaigan products
– To increase the profitability and margins on the products, Hebei Hengshui Laobaigan needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– From the outside it seems that Hebei Hengshui Laobaigan needs to have more collaboration between its sales team and marketing team. Sales professionals in the Beverages (Alcoholic) industry have deep experience in developing customer relationships. Marketing department at Hebei Hengshui Laobaigan can leverage the sales team experience to cultivate customer relationships as Hebei Hengshui Laobaigan is planning to shift buying processes online.
Employees’ less understanding of Hebei Hengshui Laobaigan strategy
– From the outside it seems that the employees of Hebei Hengshui Laobaigan 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.
No frontier risks strategy
– From the 10K / annual statement of Hebei Hengshui Laobaigan, it seems that company is thinking out the frontier risks that can impact Beverages (Alcoholic) 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.
Workers concerns about automation
– As automation is fast increasing in the Beverages (Alcoholic) industry, Hebei Hengshui Laobaigan 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, Hebei Hengshui Laobaigan 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 Beverages (Alcoholic) industry using digital technology.
Skills based hiring in Beverages (Alcoholic) industry
– The stress on hiring functional specialists at Hebei Hengshui Laobaigan 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.
Slow to strategic competitive environment developments
– As Hebei Hengshui Laobaigan is one of the leading players in the Beverages (Alcoholic) industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Beverages (Alcoholic) industry in last five years.
High operating costs
– Compare to the competitors, Hebei Hengshui Laobaigan has high operating costs in the Beverages (Alcoholic) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Hebei Hengshui Laobaigan lucrative customers.
High cash cycle compare to competitors
Hebei Hengshui Laobaigan has a high cash cycle compare to other players in the Beverages (Alcoholic) industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Hebei Hengshui Laobaigan Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Hebei Hengshui Laobaigan are -
Leveraging digital technologies
– Hebei Hengshui Laobaigan 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hebei Hengshui Laobaigan 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 Hebei Hengshui Laobaigan to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hebei Hengshui Laobaigan 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 Hebei Hengshui Laobaigan to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hebei Hengshui Laobaigan 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.
Manufacturing automation
– Hebei Hengshui Laobaigan can use the latest technology developments to improve its manufacturing and designing process in Beverages (Alcoholic) 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.
Creating value in data economy
– The success of analytics program of Hebei Hengshui Laobaigan has opened avenues for new revenue streams for the organization in Beverages (Alcoholic) industry. This can help Hebei Hengshui Laobaigan to build a more holistic ecosystem for Hebei Hengshui Laobaigan products in the Beverages (Alcoholic) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Hebei Hengshui Laobaigan 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.
Using analytics as competitive advantage
– Hebei Hengshui Laobaigan has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Beverages (Alcoholic) sector. This continuous investment in analytics has enabled Hebei Hengshui Laobaigan to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hebei Hengshui Laobaigan to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Beverages (Alcoholic) industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Hebei Hengshui Laobaigan 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. Hebei Hengshui Laobaigan 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hebei Hengshui Laobaigan in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Beverages (Alcoholic) industry, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hebei Hengshui Laobaigan can use these opportunities to build new business models that can help the communities that Hebei Hengshui Laobaigan operates in. Secondly it can use opportunities from government spending in Beverages (Alcoholic) sector.
Use of Bitcoin and other crypto currencies for transactions in Beverages (Alcoholic) industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Hebei Hengshui Laobaigan in the Beverages (Alcoholic) industry. Now Hebei Hengshui Laobaigan can target international markets with far fewer capital restrictions requirements than the existing system.
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 Hebei Hengshui Laobaigan 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.
Threats Hebei Hengshui Laobaigan External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Hebei Hengshui Laobaigan are -
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. Hebei Hengshui Laobaigan 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.
Stagnating economy with rate increase
– Hebei Hengshui Laobaigan 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 Beverages (Alcoholic) industry.
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 Hebei Hengshui Laobaigan in the Beverages (Alcoholic) sector and impact the bottomline of the organization.
Environmental challenges
– Hebei Hengshui Laobaigan 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. Hebei Hengshui Laobaigan can take advantage of this fund but it will also bring new competitors in the Beverages (Alcoholic) 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.
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. Hebei Hengshui Laobaigan needs to understand the core reasons impacting the Beverages (Alcoholic) industry. This will help it in building a better workplace.
Regulatory challenges
– Hebei Hengshui Laobaigan 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 Beverages (Alcoholic) industry regulations.
Increasing wage structure of Hebei Hengshui Laobaigan
– 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 Hebei Hengshui Laobaigan.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Hebei Hengshui Laobaigan may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Beverages (Alcoholic) sector.
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.
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 Hebei Hengshui Laobaigan business can come under increasing regulations regarding data privacy, data security, etc.
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 Hebei Hengshui Laobaigan.
Shortening product life cycle
– it is one of the major threat that Hebei Hengshui Laobaigan is facing in Beverages (Alcoholic) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Hebei Hengshui Laobaigan Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Hebei Hengshui Laobaigan 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 Hebei Hengshui Laobaigan 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 Hebei Hengshui Laobaigan 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 Hebei Hengshui Laobaigan 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 Hebei Hengshui Laobaigan needs to make to build a sustainable competitive advantage.