Sanjiang Shopping Club (601116) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Sanjiang Shopping Club (China)

Based on various researches at Oak Spring University , Sanjiang Shopping Club is operating in a macro-environment that has been destablized by – technology disruption, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, geopolitical disruptions, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , etc

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Introduction to SWOT Analysis of Sanjiang Shopping Club

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Sanjiang Shopping Club can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sanjiang Shopping Club, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sanjiang Shopping Club 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 Sanjiang Shopping Club can be done for the following purposes –
1. Strategic planning of Sanjiang Shopping Club
2. Improving business portfolio management of Sanjiang Shopping Club
3. Assessing feasibility of the new initiative in China
4. Making a Retail (Grocery) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sanjiang Shopping Club

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Strengths of Sanjiang Shopping Club | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Sanjiang Shopping Club are -

Digital Transformation in Retail (Grocery) industry

- digital transformation varies from industry to industry. For Sanjiang Shopping Club digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sanjiang Shopping Club 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.

Ability to lead change in Retail (Grocery)

– Sanjiang Shopping Club is one of the leading players in the Retail (Grocery) industry in China. Over the years it has not only transformed the business landscape in the Retail (Grocery) industry in China but also across the existing markets. The ability to lead change has enabled Sanjiang Shopping Club in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Organizational Resilience of Sanjiang Shopping Club

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

Diverse revenue streams

– Sanjiang Shopping Club is present in almost all the verticals within the Retail (Grocery) industry. This has provided Sanjiang Shopping Club 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.

Analytics focus

– Sanjiang Shopping Club 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 Retail (Grocery) 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 Sanjiang Shopping Club 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.

Training and development

– Sanjiang Shopping Club has one of the best training and development program in Services 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.

High brand equity

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

Strong track record of project management in the Retail (Grocery) industry

– Sanjiang Shopping Club is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

High switching costs

– The high switching costs that Sanjiang Shopping Club 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.

Innovation driven organization

– Sanjiang Shopping Club is one of the most innovative firm in Retail (Grocery) sector.

Learning organization

- Sanjiang Shopping Club 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 Sanjiang Shopping Club is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Sanjiang Shopping Club emphasize – knowledge, initiative, and innovation.

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Weaknesses of Sanjiang Shopping Club | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Sanjiang Shopping Club are -

Low market penetration in new markets

– Outside its home market of China, Sanjiang Shopping Club needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

High operating costs

– Compare to the competitors, Sanjiang Shopping Club has high operating costs in the Retail (Grocery) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Sanjiang Shopping Club lucrative customers.

Slow decision making process

– As mentioned earlier in the report, Sanjiang Shopping Club has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Retail (Grocery) industry over the last five years. Sanjiang Shopping Club 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.

Ability to respond to the competition

– As the decision making is very deliberative at Sanjiang Shopping Club, in the dynamic environment of Retail (Grocery) industry it has struggled to respond to the nimble upstart competition. Sanjiang Shopping Club has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Employees’ less understanding of Sanjiang Shopping Club strategy

– From the outside it seems that the employees of Sanjiang Shopping Club 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.

Interest costs

– Compare to the competition, Sanjiang Shopping Club 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.

High cash cycle compare to competitors

Sanjiang Shopping Club has a high cash cycle compare to other players in the Retail (Grocery) industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

High bargaining power of channel partners in Retail (Grocery) industry

– because of the regulatory requirements in China, Sanjiang Shopping Club 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 Retail (Grocery) industry.

Compensation and incentives

– The revenue per employee of Sanjiang Shopping Club is just above the Retail (Grocery) 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.

Slow to strategic competitive environment developments

– As Sanjiang Shopping Club is one of the leading players in the Retail (Grocery) industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Retail (Grocery) industry in last five years.

Increasing silos among functional specialists

– The organizational structure of Sanjiang Shopping Club is dominated by functional specialists. It is not different from other players in the Retail (Grocery) industry, but Sanjiang Shopping Club needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sanjiang Shopping Club to focus more on services in the Retail (Grocery) industry rather than just following the product oriented approach.

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Sanjiang Shopping Club Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Sanjiang Shopping Club are -

Manufacturing automation

– Sanjiang Shopping Club can use the latest technology developments to improve its manufacturing and designing process in Retail (Grocery) 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 Sanjiang Shopping Club 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 Sanjiang Shopping Club to hire the very best people irrespective of their geographical location.

Buying journey improvements

– Sanjiang Shopping Club can improve the customer journey of consumers in the Retail (Grocery) 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Sanjiang Shopping Club is facing challenges because of the dominance of functional experts in the organization. Sanjiang Shopping Club can utilize new technology in the field of Retail (Grocery) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Using analytics as competitive advantage

– Sanjiang Shopping Club has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Retail (Grocery) sector. This continuous investment in analytics has enabled Sanjiang Shopping Club to build a competitive advantage using analytics. The analytics driven competitive advantage can help Sanjiang Shopping Club to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Loyalty marketing

– Sanjiang Shopping Club 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, Sanjiang Shopping Club 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 Sanjiang Shopping Club to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Retail (Grocery) industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Sanjiang Shopping Club 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. Sanjiang Shopping Club 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sanjiang Shopping Club can use these opportunities to build new business models that can help the communities that Sanjiang Shopping Club operates in. Secondly it can use opportunities from government spending in Retail (Grocery) sector.

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. Sanjiang Shopping Club can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Retail (Grocery) industry, but it has also influenced the consumer preferences. Sanjiang Shopping Club can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Creating value in data economy

– The success of analytics program of Sanjiang Shopping Club has opened avenues for new revenue streams for the organization in Retail (Grocery) industry. This can help Sanjiang Shopping Club to build a more holistic ecosystem for Sanjiang Shopping Club products in the Retail (Grocery) industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Use of Bitcoin and other crypto currencies for transactions in Retail (Grocery) industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Sanjiang Shopping Club in the Retail (Grocery) industry. Now Sanjiang Shopping Club can target international markets with far fewer capital restrictions requirements than the existing system.

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Threats Sanjiang Shopping Club External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Sanjiang Shopping Club 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 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. Sanjiang Shopping Club needs to understand the core reasons impacting the Retail (Grocery) industry. This will help it in building a better workplace.

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.

Easy access to finance

– Easy access to finance in Retail (Grocery) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Sanjiang Shopping Club can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Shortening product life cycle

– it is one of the major threat that Sanjiang Shopping Club is facing in Retail (Grocery) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Sanjiang Shopping Club 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 Sanjiang Shopping Club prominent markets.

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 Sanjiang Shopping Club.

Consumer confidence and its impact on Sanjiang Shopping Club 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 Retail (Grocery) industry and other sectors.

Stagnating economy with rate increase

– Sanjiang Shopping Club 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 Retail (Grocery) industry.

High dependence on third party suppliers

– Sanjiang Shopping Club 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.

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 Sanjiang Shopping Club in the Retail (Grocery) sector and impact the bottomline of the organization.

Technology acceleration in Forth Industrial Revolution

– Sanjiang Shopping Club has witnessed rapid integration of technology during Covid-19 in the Retail (Grocery) industry. As one of the leading players in the industry, Sanjiang Shopping Club needs to keep up with the evolution of technology in the Retail (Grocery) 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.

Regulatory challenges

– Sanjiang Shopping Club 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 Retail (Grocery) industry regulations.

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Weighted SWOT Analysis of Sanjiang Shopping Club Template, Example

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

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