Based on various researches at Oak Spring University , Zhejiang Guyuelongshan Shaoxing Wine is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, increasing energy prices,
customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Zhejiang Guyuelongshan Shaoxing Wine
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Zhejiang Guyuelongshan Shaoxing Wine can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Zhejiang Guyuelongshan Shaoxing Wine, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Zhejiang Guyuelongshan Shaoxing 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 Zhejiang Guyuelongshan Shaoxing Wine can be done for the following purposes –
1. Strategic planning of Zhejiang Guyuelongshan Shaoxing Wine
2. Improving business portfolio management of Zhejiang Guyuelongshan Shaoxing 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 Zhejiang Guyuelongshan Shaoxing Wine
Strengths of Zhejiang Guyuelongshan Shaoxing Wine | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Zhejiang Guyuelongshan Shaoxing Wine are -
Analytics focus
– Zhejiang Guyuelongshan Shaoxing 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.
Digital Transformation in Beverages (Alcoholic) industry
- digital transformation varies from industry to industry. For Zhejiang Guyuelongshan Shaoxing Wine digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Zhejiang Guyuelongshan Shaoxing 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.
Cross disciplinary teams
– Horizontal connected teams at the Zhejiang Guyuelongshan Shaoxing Wine 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.
Sustainable margins compare to other players in Beverages (Alcoholic) industry
– Zhejiang Guyuelongshan Shaoxing Wine has clearly differentiated products in the market place. This has enabled Zhejiang Guyuelongshan Shaoxing Wine to fetch slight price premium compare to the competitors in the Beverages (Alcoholic) industry. The sustainable margins have also helped Zhejiang Guyuelongshan Shaoxing Wine to invest into research and development (R&D) and innovation.
Learning organization
- Zhejiang Guyuelongshan Shaoxing 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 Zhejiang Guyuelongshan Shaoxing Wine is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Zhejiang Guyuelongshan Shaoxing Wine emphasize – knowledge, initiative, and innovation.
High brand equity
– Zhejiang Guyuelongshan Shaoxing Wine has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Zhejiang Guyuelongshan Shaoxing Wine to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management in the Beverages (Alcoholic) industry
– Zhejiang Guyuelongshan Shaoxing Wine is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Zhejiang Guyuelongshan Shaoxing Wine has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Zhejiang Guyuelongshan Shaoxing Wine has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Ability to recruit top talent
– Zhejiang Guyuelongshan Shaoxing Wine is one of the leading players in the Beverages (Alcoholic) industry in China. It is in a position to attract the best talent available in China. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Zhejiang Guyuelongshan Shaoxing Wine
– The covid-19 pandemic has put organizational resilience at the centre of everthing Zhejiang Guyuelongshan Shaoxing Wine does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Zhejiang Guyuelongshan Shaoxing Wine in Beverages (Alcoholic) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Zhejiang Guyuelongshan Shaoxing 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 Zhejiang Guyuelongshan Shaoxing Wine have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses of Zhejiang Guyuelongshan Shaoxing Wine | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Zhejiang Guyuelongshan Shaoxing Wine are -
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 Zhejiang Guyuelongshan Shaoxing Wine supply chain. Even after few cautionary changes, Zhejiang Guyuelongshan Shaoxing Wine is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Zhejiang Guyuelongshan Shaoxing Wine vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Zhejiang Guyuelongshan Shaoxing Wine has some of the most successful models in the Beverages (Alcoholic) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Zhejiang Guyuelongshan Shaoxing Wine should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Zhejiang Guyuelongshan Shaoxing Wine products
– To increase the profitability and margins on the products, Zhejiang Guyuelongshan Shaoxing Wine needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners in Beverages (Alcoholic) industry
– because of the regulatory requirements in China, Zhejiang Guyuelongshan Shaoxing Wine 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 Beverages (Alcoholic) industry.
High cash cycle compare to competitors
Zhejiang Guyuelongshan Shaoxing Wine has a high cash cycle compare to other players in the Beverages (Alcoholic) industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Low market penetration in new markets
– Outside its home market of China, Zhejiang Guyuelongshan Shaoxing Wine needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Zhejiang Guyuelongshan Shaoxing Wine is dominated by functional specialists. It is not different from other players in the Beverages (Alcoholic) industry, but Zhejiang Guyuelongshan Shaoxing Wine needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Zhejiang Guyuelongshan Shaoxing Wine to focus more on services in the Beverages (Alcoholic) industry rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Zhejiang Guyuelongshan Shaoxing Wine is one of the leading players in the Beverages (Alcoholic) industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Beverages (Alcoholic) industry in last five years.
Skills based hiring in Beverages (Alcoholic) industry
– The stress on hiring functional specialists at Zhejiang Guyuelongshan Shaoxing Wine 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.
Interest costs
– Compare to the competition, Zhejiang Guyuelongshan Shaoxing Wine 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.
Employees’ less understanding of Zhejiang Guyuelongshan Shaoxing Wine strategy
– From the outside it seems that the employees of Zhejiang Guyuelongshan Shaoxing Wine 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.
Zhejiang Guyuelongshan Shaoxing Wine Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Zhejiang Guyuelongshan Shaoxing Wine are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Zhejiang Guyuelongshan Shaoxing 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 Zhejiang Guyuelongshan Shaoxing 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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Zhejiang Guyuelongshan Shaoxing Wine to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Leveraging digital technologies
– Zhejiang Guyuelongshan Shaoxing 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.
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. Zhejiang Guyuelongshan Shaoxing Wine can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Zhejiang Guyuelongshan Shaoxing 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.
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. Zhejiang Guyuelongshan Shaoxing 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. Zhejiang Guyuelongshan Shaoxing 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.
Manufacturing automation
– Zhejiang Guyuelongshan Shaoxing Wine can use the latest technology developments to improve its manufacturing and designing process in Beverages (Alcoholic) sector. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Creating value in data economy
– The success of analytics program of Zhejiang Guyuelongshan Shaoxing Wine has opened avenues for new revenue streams for the organization in Beverages (Alcoholic) industry. This can help Zhejiang Guyuelongshan Shaoxing Wine to build a more holistic ecosystem for Zhejiang Guyuelongshan Shaoxing Wine products in the Beverages (Alcoholic) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Zhejiang Guyuelongshan Shaoxing Wine 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 Beverages (Alcoholic) industry.
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 Zhejiang Guyuelongshan Shaoxing Wine in the Beverages (Alcoholic) industry. Now Zhejiang Guyuelongshan Shaoxing Wine can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Zhejiang Guyuelongshan Shaoxing Wine to increase its market reach. Zhejiang Guyuelongshan Shaoxing Wine 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Beverages (Alcoholic) industry, but it has also influenced the consumer preferences. Zhejiang Guyuelongshan Shaoxing Wine can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Zhejiang Guyuelongshan Shaoxing 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.
Threats Zhejiang Guyuelongshan Shaoxing Wine External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Zhejiang Guyuelongshan Shaoxing Wine are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Zhejiang Guyuelongshan Shaoxing 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.
Environmental challenges
– Zhejiang Guyuelongshan Shaoxing Wine 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. Zhejiang Guyuelongshan Shaoxing Wine can take advantage of this fund but it will also bring new competitors in the Beverages (Alcoholic) 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. Zhejiang Guyuelongshan Shaoxing Wine needs to understand the core reasons impacting the Beverages (Alcoholic) industry. This will help it in building a better workplace.
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. Zhejiang Guyuelongshan Shaoxing Wine will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Stagnating economy with rate increase
– Zhejiang Guyuelongshan Shaoxing 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.
Consumer confidence and its impact on Zhejiang Guyuelongshan Shaoxing 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.
Regulatory challenges
– Zhejiang Guyuelongshan Shaoxing 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.
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 Zhejiang Guyuelongshan Shaoxing Wine in the Beverages (Alcoholic) sector and impact the bottomline of the organization.
Increasing wage structure of Zhejiang Guyuelongshan Shaoxing 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 Zhejiang Guyuelongshan Shaoxing Wine.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Zhejiang Guyuelongshan Shaoxing 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.
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. Zhejiang Guyuelongshan Shaoxing Wine can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Zhejiang Guyuelongshan Shaoxing Wine Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Zhejiang Guyuelongshan Shaoxing 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 Zhejiang Guyuelongshan Shaoxing 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 Zhejiang Guyuelongshan Shaoxing 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 Zhejiang Guyuelongshan Shaoxing 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 Zhejiang Guyuelongshan Shaoxing Wine needs to make to build a sustainable competitive advantage.