Based on various researches at Oak Spring University , Sichuan Tuopai Shede Wine is operating in a macro-environment that has been destablized by – cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies,
geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Sichuan Tuopai Shede Wine
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Sichuan Tuopai Shede Wine can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sichuan Tuopai Shede Wine, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sichuan Tuopai Shede Wine 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 Sichuan Tuopai Shede Wine can be done for the following purposes –
1. Strategic planning of Sichuan Tuopai Shede Wine
2. Improving business portfolio management of Sichuan Tuopai Shede Wine
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 Sichuan Tuopai Shede Wine
Strengths of Sichuan Tuopai Shede Wine | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sichuan Tuopai Shede Wine are -
Superior customer experience
– The customer experience strategy of Sichuan Tuopai Shede Wine in Beverages (Alcoholic) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Sichuan Tuopai Shede Wine in the Consumer/Non-Cyclical sector have low bargaining power. Sichuan Tuopai Shede Wine has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sichuan Tuopai Shede Wine to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Sichuan Tuopai Shede Wine 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 Beverages (Alcoholic) 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.
Organizational Resilience of Sichuan Tuopai Shede Wine
– The covid-19 pandemic has put organizational resilience at the centre of everthing Sichuan Tuopai Shede Wine does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Beverages (Alcoholic) industry
- digital transformation varies from industry to industry. For Sichuan Tuopai Shede Wine digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sichuan Tuopai Shede Wine 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.
Innovation driven organization
– Sichuan Tuopai Shede Wine is one of the most innovative firm in Beverages (Alcoholic) sector.
High brand equity
– Sichuan Tuopai Shede Wine has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sichuan Tuopai Shede Wine to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Sichuan Tuopai Shede Wine has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Beverages (Alcoholic) industry. Secondly the value chain collaborators of Sichuan Tuopai Shede Wine have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Beverages (Alcoholic)
– Sichuan Tuopai Shede Wine is one of the leading players in the Beverages (Alcoholic) industry in China. Over the years it has not only transformed the business landscape in the Beverages (Alcoholic) industry in China but also across the existing markets. The ability to lead change has enabled Sichuan Tuopai Shede Wine in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Sichuan Tuopai Shede Wine 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 Sichuan Tuopai Shede Wine is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Sichuan Tuopai Shede Wine emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Beverages (Alcoholic) industry
– Sichuan Tuopai Shede Wine has clearly differentiated products in the market place. This has enabled Sichuan Tuopai Shede Wine to fetch slight price premium compare to the competitors in the Beverages (Alcoholic) industry. The sustainable margins have also helped Sichuan Tuopai Shede Wine to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Sichuan Tuopai Shede Wine has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Sichuan Tuopai Shede Wine 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.
Weaknesses of Sichuan Tuopai Shede Wine | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sichuan Tuopai Shede Wine are -
Lack of clear differentiation of Sichuan Tuopai Shede Wine products
– To increase the profitability and margins on the products, Sichuan Tuopai Shede Wine needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative at Sichuan Tuopai Shede Wine, in the dynamic environment of Beverages (Alcoholic) industry it has struggled to respond to the nimble upstart competition. Sichuan Tuopai Shede Wine has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Sichuan Tuopai Shede Wine is slow explore the new channels of communication. These new channels of communication can help Sichuan Tuopai Shede Wine to provide better information regarding Beverages (Alcoholic) products and services. It can also build an online community to further reach out to potential customers.
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 Sichuan Tuopai Shede Wine supply chain. Even after few cautionary changes, Sichuan Tuopai Shede Wine is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sichuan Tuopai Shede Wine vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– From the 10K / annual statement of Sichuan Tuopai Shede Wine, 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.
Need for greater diversity
– Sichuan Tuopai Shede Wine 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.
High dependence on Sichuan Tuopai Shede Wine ‘s star products
– The top 2 products and services of Sichuan Tuopai Shede Wine still accounts for major business revenue. This dependence on star products in Beverages (Alcoholic) industry has resulted into insufficient focus on developing new products, even though Sichuan Tuopai Shede Wine has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, Sichuan Tuopai Shede Wine 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 Sichuan Tuopai Shede Wine lucrative customers.
Compensation and incentives
– The revenue per employee of Sichuan Tuopai Shede Wine is just above the Beverages (Alcoholic) 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.
Capital Spending Reduction
– Even during the low interest decade, Sichuan Tuopai Shede Wine 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.
Aligning sales with marketing
– From the outside it seems that Sichuan Tuopai Shede Wine 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 Sichuan Tuopai Shede Wine can leverage the sales team experience to cultivate customer relationships as Sichuan Tuopai Shede Wine is planning to shift buying processes online.
Sichuan Tuopai Shede Wine Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Sichuan Tuopai Shede Wine are -
Developing new processes and practices
– Sichuan Tuopai Shede Wine can develop new processes and procedures in Beverages (Alcoholic) 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.
Leveraging digital technologies
– Sichuan Tuopai Shede Wine 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.
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. Sichuan Tuopai Shede Wine 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. Sichuan Tuopai Shede Wine 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.
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 Sichuan Tuopai Shede Wine in the Beverages (Alcoholic) industry. Now Sichuan Tuopai Shede Wine can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Sichuan Tuopai Shede Wine is facing challenges because of the dominance of functional experts in the organization. Sichuan Tuopai Shede Wine can utilize new technology in the field of Beverages (Alcoholic) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Using analytics as competitive advantage
– Sichuan Tuopai Shede Wine 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 Sichuan Tuopai Shede Wine to build a competitive advantage using analytics. The analytics driven competitive advantage can help Sichuan Tuopai Shede Wine to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Sichuan Tuopai Shede Wine has opened avenues for new revenue streams for the organization in Beverages (Alcoholic) industry. This can help Sichuan Tuopai Shede Wine to build a more holistic ecosystem for Sichuan Tuopai Shede Wine products in the Beverages (Alcoholic) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sichuan Tuopai Shede Wine can use these opportunities to build new business models that can help the communities that Sichuan Tuopai Shede Wine operates in. Secondly it can use opportunities from government spending in Beverages (Alcoholic) sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Sichuan Tuopai Shede Wine 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.
Loyalty marketing
– Sichuan Tuopai Shede Wine 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Sichuan Tuopai Shede Wine 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 Sichuan Tuopai Shede Wine to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Sichuan Tuopai Shede Wine 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sichuan Tuopai Shede Wine 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 Sichuan Tuopai Shede Wine to hire the very best people irrespective of their geographical location.
Threats Sichuan Tuopai Shede Wine External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Sichuan Tuopai Shede Wine are -
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 Sichuan Tuopai Shede Wine business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Sichuan Tuopai Shede Wine 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.
Stagnating economy with rate increase
– Sichuan Tuopai Shede Wine 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.
Easy access to finance
– Easy access to finance in Beverages (Alcoholic) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Sichuan Tuopai Shede Wine can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Sichuan Tuopai Shede Wine 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 Beverages (Alcoholic) industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Sichuan Tuopai Shede Wine 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Sichuan Tuopai Shede Wine 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 Sichuan Tuopai Shede Wine prominent markets.
Increasing wage structure of Sichuan Tuopai Shede Wine
– 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 Sichuan Tuopai Shede Wine.
Regulatory challenges
– Sichuan Tuopai Shede Wine 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Beverages (Alcoholic) industry are lowering. It can presents Sichuan Tuopai Shede Wine with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Beverages (Alcoholic) sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sichuan Tuopai Shede Wine in Beverages (Alcoholic) industry. The Beverages (Alcoholic) 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.
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 Sichuan Tuopai Shede Wine.
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 Sichuan Tuopai Shede Wine in the Beverages (Alcoholic) sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Sichuan Tuopai Shede Wine Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Sichuan Tuopai Shede Wine 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 Sichuan Tuopai Shede Wine 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 Sichuan Tuopai Shede Wine 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 Sichuan Tuopai Shede Wine 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 Sichuan Tuopai Shede Wine needs to make to build a sustainable competitive advantage.