Shanghai Haixin B (900917) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Shanghai Haixin B (China)

Based on various researches at Oak Spring University , Shanghai Haixin B is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, there is backlash against globalization, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, supply chains are disrupted by pandemic , etc

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Introduction to SWOT Analysis of Shanghai Haixin B

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Shanghai Haixin B can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shanghai Haixin B, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shanghai Haixin B 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Shanghai Haixin B can be done for the following purposes –
1. Strategic planning of Shanghai Haixin B
2. Improving business portfolio management of Shanghai Haixin B
3. Assessing feasibility of the new initiative in China
4. Making a Apparel/Accessories sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Shanghai Haixin B

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Strengths of Shanghai Haixin B | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Shanghai Haixin B are -

Highly skilled collaborators

– Shanghai Haixin B has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Apparel/Accessories industry. Secondly the value chain collaborators of Shanghai Haixin B have helped the firm to develop new products and bring them quickly to the marketplace.

Diverse revenue streams

– Shanghai Haixin B is present in almost all the verticals within the Apparel/Accessories industry. This has provided Shanghai Haixin B 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.

Superior customer experience

– The customer experience strategy of Shanghai Haixin B in Apparel/Accessories industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

High switching costs

– The high switching costs that Shanghai Haixin B 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.

Cross disciplinary teams

– Horizontal connected teams at the Shanghai Haixin B 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.

High brand equity

– Shanghai Haixin B has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Shanghai Haixin B to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Learning organization

- Shanghai Haixin B 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 Shanghai Haixin B is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Shanghai Haixin B emphasize – knowledge, initiative, and innovation.

Organizational Resilience of Shanghai Haixin B

– The covid-19 pandemic has put organizational resilience at the centre of everthing Shanghai Haixin B does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Low bargaining power of suppliers

– Suppliers of Shanghai Haixin B in the Consumer Cyclical sector have low bargaining power. Shanghai Haixin B has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shanghai Haixin B to manage not only supply disruptions but also source products at highly competitive prices.

Innovation driven organization

– Shanghai Haixin B is one of the most innovative firm in Apparel/Accessories sector.

Effective Research and Development (R&D)

– Shanghai Haixin B has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Shanghai Haixin B staying ahead in the Apparel/Accessories industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Analytics focus

– Shanghai Haixin B 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 Apparel/Accessories 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.

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Weaknesses of Shanghai Haixin B | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Shanghai Haixin B are -

Lack of clear differentiation of Shanghai Haixin B products

– To increase the profitability and margins on the products, Shanghai Haixin B needs to provide more differentiated products than what it is currently offering in the marketplace.

Increasing silos among functional specialists

– The organizational structure of Shanghai Haixin B is dominated by functional specialists. It is not different from other players in the Apparel/Accessories industry, but Shanghai Haixin B needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Shanghai Haixin B to focus more on services in the Apparel/Accessories industry rather than just following the product oriented approach.

High operating costs

– Compare to the competitors, Shanghai Haixin B has high operating costs in the Apparel/Accessories industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Shanghai Haixin B lucrative customers.

Aligning sales with marketing

– From the outside it seems that Shanghai Haixin B needs to have more collaboration between its sales team and marketing team. Sales professionals in the Apparel/Accessories industry have deep experience in developing customer relationships. Marketing department at Shanghai Haixin B can leverage the sales team experience to cultivate customer relationships as Shanghai Haixin B is planning to shift buying processes online.

Slow decision making process

– As mentioned earlier in the report, Shanghai Haixin B has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Apparel/Accessories industry over the last five years. Shanghai Haixin B 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.

High bargaining power of channel partners in Apparel/Accessories industry

– because of the regulatory requirements in China, Shanghai Haixin B 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 Apparel/Accessories industry.

Skills based hiring in Apparel/Accessories industry

– The stress on hiring functional specialists at Shanghai Haixin B 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.

High dependence on Shanghai Haixin B ‘s star products

– The top 2 products and services of Shanghai Haixin B still accounts for major business revenue. This dependence on star products in Apparel/Accessories industry has resulted into insufficient focus on developing new products, even though Shanghai Haixin B has relatively successful track record of launching new products.

Interest costs

– Compare to the competition, Shanghai Haixin B has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.

Capital Spending Reduction

– Even during the low interest decade, Shanghai Haixin B has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Apparel/Accessories industry using digital technology.

Products dominated business model

– Even though Shanghai Haixin B has some of the most successful models in the Apparel/Accessories industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Shanghai Haixin B should strive to include more intangible value offerings along with its core products and services.

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Shanghai Haixin B Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Shanghai Haixin B are -

Using analytics as competitive advantage

– Shanghai Haixin B has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Apparel/Accessories sector. This continuous investment in analytics has enabled Shanghai Haixin B to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shanghai Haixin B to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Apparel/Accessories industry, but it has also influenced the consumer preferences. Shanghai Haixin B can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Better consumer reach

– The expansion of the 5G network will help Shanghai Haixin B to increase its market reach. Shanghai Haixin B 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.

Buying journey improvements

– Shanghai Haixin B can improve the customer journey of consumers in the Apparel/Accessories industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Shanghai Haixin B can use these opportunities to build new business models that can help the communities that Shanghai Haixin B operates in. Secondly it can use opportunities from government spending in Apparel/Accessories sector.

Manufacturing automation

– Shanghai Haixin B can use the latest technology developments to improve its manufacturing and designing process in Apparel/Accessories 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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Shanghai Haixin B 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 Shanghai Haixin B 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, Shanghai Haixin B 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 Shanghai Haixin B to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Building a culture of innovation

– managers at Shanghai Haixin B can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Apparel/Accessories industry.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Shanghai Haixin B can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Loyalty marketing

– Shanghai Haixin B 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.

Identify volunteer opportunities

– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Shanghai Haixin B can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Creating value in data economy

– The success of analytics program of Shanghai Haixin B has opened avenues for new revenue streams for the organization in Apparel/Accessories industry. This can help Shanghai Haixin B to build a more holistic ecosystem for Shanghai Haixin B products in the Apparel/Accessories industry by providing – data insight services, data privacy related products, data based consulting services, etc.

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Threats Shanghai Haixin B External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Shanghai Haixin B are -

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 dependence on third party suppliers

– Shanghai Haixin B 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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Shanghai Haixin B may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Apparel/Accessories sector.

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 international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Shanghai Haixin B 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 Shanghai Haixin B prominent markets.

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 Shanghai Haixin B business can come under increasing regulations regarding data privacy, data security, etc.

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 Shanghai Haixin B in the Apparel/Accessories sector and impact the bottomline of the organization.

Environmental challenges

– Shanghai Haixin B 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. Shanghai Haixin B can take advantage of this fund but it will also bring new competitors in the Apparel/Accessories industry.

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. Shanghai Haixin B needs to understand the core reasons impacting the Apparel/Accessories industry. This will help it in building a better workplace.

Technology acceleration in Forth Industrial Revolution

– Shanghai Haixin B has witnessed rapid integration of technology during Covid-19 in the Apparel/Accessories industry. As one of the leading players in the industry, Shanghai Haixin B needs to keep up with the evolution of technology in the Apparel/Accessories sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Apparel/Accessories industry are lowering. It can presents Shanghai Haixin B with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Apparel/Accessories sector.

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. Shanghai Haixin B 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.

Shortening product life cycle

– it is one of the major threat that Shanghai Haixin B is facing in Apparel/Accessories sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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Weighted SWOT Analysis of Shanghai Haixin B Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Shanghai Haixin B 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 Shanghai Haixin B 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 Shanghai Haixin B 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 Shanghai Haixin B 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 Shanghai Haixin B needs to make to build a sustainable competitive advantage.

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