Based on various researches at Oak Spring University , Zhejiang Guyuelongshan Shaoxing Wine is operating in a macro-environment that has been destablized by – increasing energy prices, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, supply chains are disrupted by pandemic ,
customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, 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 -
Innovation driven organization
– Zhejiang Guyuelongshan Shaoxing Wine is one of the most innovative firm in Beverages (Alcoholic) sector.
Training and development
– Zhejiang Guyuelongshan Shaoxing Wine has one of the best training and development program in Consumer/Non-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.
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.
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.
Operational resilience
– The operational resilience strategy of Zhejiang Guyuelongshan Shaoxing Wine comprises – understanding the underlying the factors in the Beverages (Alcoholic) 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.
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.
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.
Ability to lead change in Beverages (Alcoholic)
– Zhejiang Guyuelongshan Shaoxing Wine is one of the leading players in the Beverages (Alcoholic) industry in China. Over the years it has not only transformed the business landscape in the Beverages (Alcoholic) industry in China but also across the existing markets. The ability to lead change has enabled Zhejiang Guyuelongshan Shaoxing Wine in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
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.
Low bargaining power of suppliers
– Suppliers of Zhejiang Guyuelongshan Shaoxing Wine in the Consumer/Non-Cyclical sector have low bargaining power. Zhejiang Guyuelongshan Shaoxing Wine has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Zhejiang Guyuelongshan Shaoxing Wine to manage not only supply disruptions but also source products at highly competitive prices.
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 -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Zhejiang Guyuelongshan Shaoxing Wine is slow explore the new channels of communication. These new channels of communication can help Zhejiang Guyuelongshan Shaoxing Wine to provide better information regarding Beverages (Alcoholic) products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the Beverages (Alcoholic) industry, Zhejiang Guyuelongshan Shaoxing Wine needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
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.
High operating costs
– Compare to the competitors, Zhejiang Guyuelongshan Shaoxing Wine has high operating costs in the Beverages (Alcoholic) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Zhejiang Guyuelongshan Shaoxing Wine lucrative customers.
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.
Compensation and incentives
– The revenue per employee of Zhejiang Guyuelongshan Shaoxing Wine is just above the Beverages (Alcoholic) industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
No frontier risks strategy
– From the 10K / annual statement of Zhejiang Guyuelongshan Shaoxing Wine, it seems that company is thinking out the frontier risks that can impact Beverages (Alcoholic) industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
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.
High dependence on Zhejiang Guyuelongshan Shaoxing Wine ‘s star products
– The top 2 products and services of Zhejiang Guyuelongshan Shaoxing Wine still accounts for major business revenue. This dependence on star products in Beverages (Alcoholic) industry has resulted into insufficient focus on developing new products, even though Zhejiang Guyuelongshan Shaoxing Wine has relatively successful track record of launching new products.
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.
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.
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 -
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Zhejiang Guyuelongshan Shaoxing Wine can use these opportunities to build new business models that can help the communities that Zhejiang Guyuelongshan Shaoxing Wine operates in. Secondly it can use opportunities from government spending in Beverages (Alcoholic) sector.
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.
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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Zhejiang Guyuelongshan Shaoxing Wine can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
Developing new processes and practices
– Zhejiang Guyuelongshan Shaoxing Wine can develop new processes and procedures in Beverages (Alcoholic) industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Zhejiang Guyuelongshan Shaoxing Wine 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.
Buying journey improvements
– Zhejiang Guyuelongshan Shaoxing Wine can improve the customer journey of consumers in the Beverages (Alcoholic) 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, Zhejiang Guyuelongshan Shaoxing Wine is facing challenges because of the dominance of functional experts in the organization. Zhejiang Guyuelongshan Shaoxing Wine can utilize new technology in the field of Beverages (Alcoholic) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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.
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 -
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.
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 Zhejiang Guyuelongshan Shaoxing Wine.
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.
Technology acceleration in Forth Industrial Revolution
– Zhejiang Guyuelongshan Shaoxing Wine has witnessed rapid integration of technology during Covid-19 in the Beverages (Alcoholic) industry. As one of the leading players in the industry, Zhejiang Guyuelongshan Shaoxing Wine needs to keep up with the evolution of technology in the Beverages (Alcoholic) 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.
Shortening product life cycle
– it is one of the major threat that Zhejiang Guyuelongshan Shaoxing Wine is facing in Beverages (Alcoholic) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Zhejiang Guyuelongshan Shaoxing Wine needs to understand the core reasons impacting the Beverages (Alcoholic) industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Zhejiang Guyuelongshan Shaoxing Wine high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
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.
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 Zhejiang Guyuelongshan Shaoxing Wine business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Zhejiang Guyuelongshan Shaoxing Wine can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate Zhejiang Guyuelongshan Shaoxing Wine prominent markets.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Beverages (Alcoholic) industry are lowering. It can presents Zhejiang Guyuelongshan Shaoxing Wine with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Beverages (Alcoholic) sector.
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.