SWOT Analysis / TOWS Matrix for Gangtai Holdin (China)
Based on various researches at Oak Spring University , Gangtai Holdin is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, geopolitical disruptions, increasing energy prices, increasing household debt because of falling income levels, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google,
wage bills are increasing, 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 Gangtai Holdin can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Gangtai Holdin, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Gangtai Holdin 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 Gangtai Holdin can be done for the following purposes –
1. Strategic planning of Gangtai Holdin
2. Improving business portfolio management of Gangtai Holdin
3. Assessing feasibility of the new initiative in China
4. Making a Jewelry & Silverware sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Gangtai Holdin
Strengths of Gangtai Holdin | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Gangtai Holdin are -
Digital Transformation in Jewelry & Silverware industry
- digital transformation varies from industry to industry. For Gangtai Holdin digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Gangtai Holdin 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.
Low bargaining power of suppliers
– Suppliers of Gangtai Holdin in the Consumer Cyclical sector have low bargaining power. Gangtai Holdin has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Gangtai Holdin to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Gangtai Holdin is present in almost all the verticals within the Jewelry & Silverware industry. This has provided Gangtai Holdin 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.
Effective Research and Development (R&D)
– Gangtai Holdin has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Gangtai Holdin staying ahead in the Jewelry & Silverware industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Gangtai Holdin has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Gangtai Holdin to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Gangtai Holdin is one of the most innovative firm in Jewelry & Silverware sector.
Operational resilience
– The operational resilience strategy of Gangtai Holdin comprises – understanding the underlying the factors in the Jewelry & Silverware 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.
High switching costs
– The high switching costs that Gangtai Holdin 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.
Training and development
– Gangtai Holdin 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.
Ability to lead change in Jewelry & Silverware
– Gangtai Holdin is one of the leading players in the Jewelry & Silverware industry in China. Over the years it has not only transformed the business landscape in the Jewelry & Silverware industry in China but also across the existing markets. The ability to lead change has enabled Gangtai Holdin in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Gangtai Holdin 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 Jewelry & Silverware 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.
Cross disciplinary teams
– Horizontal connected teams at the Gangtai Holdin 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 Gangtai Holdin | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Gangtai Holdin are -
High dependence on Gangtai Holdin ‘s star products
– The top 2 products and services of Gangtai Holdin still accounts for major business revenue. This dependence on star products in Jewelry & Silverware industry has resulted into insufficient focus on developing new products, even though Gangtai Holdin has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Gangtai Holdin is dominated by functional specialists. It is not different from other players in the Jewelry & Silverware industry, but Gangtai Holdin needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Gangtai Holdin to focus more on services in the Jewelry & Silverware industry rather than just following the product oriented approach.
Aligning sales with marketing
– From the outside it seems that Gangtai Holdin needs to have more collaboration between its sales team and marketing team. Sales professionals in the Jewelry & Silverware industry have deep experience in developing customer relationships. Marketing department at Gangtai Holdin can leverage the sales team experience to cultivate customer relationships as Gangtai Holdin is planning to shift buying processes online.
High bargaining power of channel partners in Jewelry & Silverware industry
– because of the regulatory requirements in China, Gangtai Holdin is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Jewelry & Silverware industry.
Need for greater diversity
– Gangtai Holdin 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.
Capital Spending Reduction
– Even during the low interest decade, Gangtai Holdin 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 Jewelry & Silverware industry using digital technology.
Employees’ less understanding of Gangtai Holdin strategy
– From the outside it seems that the employees of Gangtai Holdin 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 Gangtai Holdin, it seems that company is thinking out the frontier risks that can impact Jewelry & Silverware 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.
Ability to respond to the competition
– As the decision making is very deliberative at Gangtai Holdin, in the dynamic environment of Jewelry & Silverware industry it has struggled to respond to the nimble upstart competition. Gangtai Holdin has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Gangtai Holdin products
– To increase the profitability and margins on the products, Gangtai Holdin needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, Gangtai Holdin has high operating costs in the Jewelry & Silverware industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Gangtai Holdin lucrative customers.
Gangtai Holdin Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Gangtai Holdin are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Jewelry & Silverware industry, but it has also influenced the consumer preferences. Gangtai Holdin can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Gangtai Holdin 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.
Developing new processes and practices
– Gangtai Holdin can develop new processes and procedures in Jewelry & Silverware 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Gangtai Holdin 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 Gangtai Holdin to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Gangtai Holdin can use these opportunities to build new business models that can help the communities that Gangtai Holdin operates in. Secondly it can use opportunities from government spending in Jewelry & Silverware sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Gangtai Holdin 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Gangtai Holdin in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Jewelry & Silverware industry, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Gangtai Holdin has opened avenues for new revenue streams for the organization in Jewelry & Silverware industry. This can help Gangtai Holdin to build a more holistic ecosystem for Gangtai Holdin products in the Jewelry & Silverware industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Jewelry & Silverware industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Gangtai Holdin 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. Gangtai Holdin 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.
Using analytics as competitive advantage
– Gangtai Holdin has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Jewelry & Silverware sector. This continuous investment in analytics has enabled Gangtai Holdin to build a competitive advantage using analytics. The analytics driven competitive advantage can help Gangtai Holdin to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Gangtai Holdin 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 Gangtai Holdin to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Gangtai Holdin to increase its market reach. Gangtai Holdin 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.
Building a culture of innovation
– managers at Gangtai Holdin 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 Jewelry & Silverware industry.
Threats Gangtai Holdin External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Gangtai Holdin are -
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. Gangtai Holdin needs to understand the core reasons impacting the Jewelry & Silverware industry. This will help it in building a better workplace.
Consumer confidence and its impact on Gangtai Holdin 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 Jewelry & Silverware industry and other sectors.
Regulatory challenges
– Gangtai Holdin 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 Jewelry & Silverware industry regulations.
Technology acceleration in Forth Industrial Revolution
– Gangtai Holdin has witnessed rapid integration of technology during Covid-19 in the Jewelry & Silverware industry. As one of the leading players in the industry, Gangtai Holdin needs to keep up with the evolution of technology in the Jewelry & Silverware 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.
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. Gangtai Holdin 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.
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 Gangtai Holdin in the Jewelry & Silverware sector and impact the bottomline 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 Gangtai Holdin business can come under increasing regulations regarding data privacy, data security, etc.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Increasing wage structure of Gangtai Holdin
– 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 Gangtai Holdin.
High dependence on third party suppliers
– Gangtai Holdin 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Gangtai Holdin 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 Gangtai Holdin prominent markets.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Gangtai Holdin in Jewelry & Silverware industry. The Jewelry & Silverware 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 Gangtai Holdin.
Weighted SWOT Analysis of Gangtai Holdin Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Gangtai Holdin 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 Gangtai Holdin 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 Gangtai Holdin 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 Gangtai Holdin 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 Gangtai Holdin needs to make to build a sustainable competitive advantage.
