SWOT Analysis / TOWS Matrix for Kuaijishan Shaoxing Wine (China)
Based on various researches at Oak Spring University , Kuaijishan Shaoxing Wine is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, increasing commodity prices, increasing household debt because of falling income levels, technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies,
competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, etc
Introduction to SWOT Analysis of Kuaijishan Shaoxing Wine
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Kuaijishan Shaoxing Wine can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kuaijishan Shaoxing Wine, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kuaijishan 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 Kuaijishan Shaoxing Wine can be done for the following purposes –
1. Strategic planning of Kuaijishan Shaoxing Wine
2. Improving business portfolio management of Kuaijishan 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 Kuaijishan Shaoxing Wine
Strengths of Kuaijishan Shaoxing Wine | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kuaijishan Shaoxing Wine are -
Learning organization
- Kuaijishan 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 Kuaijishan Shaoxing Wine is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Kuaijishan Shaoxing Wine emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Kuaijishan Shaoxing Wine in the Consumer/Non-Cyclical sector have low bargaining power. Kuaijishan Shaoxing Wine has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Kuaijishan Shaoxing Wine to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Kuaijishan Shaoxing Wine has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Kuaijishan Shaoxing Wine to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Kuaijishan Shaoxing Wine is one of the most innovative firm in Beverages (Alcoholic) sector.
Highly skilled collaborators
– Kuaijishan 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 Kuaijishan Shaoxing Wine have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Kuaijishan Shaoxing Wine is present in almost all the verticals within the Beverages (Alcoholic) industry. This has provided Kuaijishan Shaoxing Wine 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.
Training and development
– Kuaijishan 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.
Ability to recruit top talent
– Kuaijishan 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 Kuaijishan 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.
Digital Transformation in Beverages (Alcoholic) industry
- digital transformation varies from industry to industry. For Kuaijishan Shaoxing Wine digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Kuaijishan 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.
Sustainable margins compare to other players in Beverages (Alcoholic) industry
– Kuaijishan Shaoxing Wine has clearly differentiated products in the market place. This has enabled Kuaijishan Shaoxing Wine to fetch slight price premium compare to the competitors in the Beverages (Alcoholic) industry. The sustainable margins have also helped Kuaijishan Shaoxing Wine to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Kuaijishan 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.
Weaknesses of Kuaijishan Shaoxing Wine | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kuaijishan Shaoxing Wine are -
Aligning sales with marketing
– From the outside it seems that Kuaijishan Shaoxing Wine needs to have more collaboration between its sales team and marketing team. Sales professionals in the Beverages (Alcoholic) industry have deep experience in developing customer relationships. Marketing department at Kuaijishan Shaoxing Wine can leverage the sales team experience to cultivate customer relationships as Kuaijishan Shaoxing Wine is planning to shift buying processes online.
Interest costs
– Compare to the competition, Kuaijishan 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.
Need for greater diversity
– Kuaijishan Shaoxing Wine has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Kuaijishan Shaoxing Wine is slow explore the new channels of communication. These new channels of communication can help Kuaijishan 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, Kuaijishan 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.
Slow to strategic competitive environment developments
– As Kuaijishan 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.
Increasing silos among functional specialists
– The organizational structure of Kuaijishan Shaoxing Wine is dominated by functional specialists. It is not different from other players in the Beverages (Alcoholic) industry, but Kuaijishan Shaoxing Wine needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Kuaijishan Shaoxing Wine to focus more on services in the Beverages (Alcoholic) industry rather than just following the product oriented approach.
Products dominated business model
– Even though Kuaijishan 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. Kuaijishan Shaoxing Wine should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Kuaijishan Shaoxing Wine has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Beverages (Alcoholic) industry over the last five years. Kuaijishan Shaoxing Wine 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.
Low market penetration in new markets
– Outside its home market of China, Kuaijishan Shaoxing Wine needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, Kuaijishan 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 Kuaijishan Shaoxing Wine lucrative customers.
Kuaijishan Shaoxing Wine Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Kuaijishan Shaoxing Wine are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Kuaijishan 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 Kuaijishan 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Kuaijishan 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.
Using analytics as competitive advantage
– Kuaijishan Shaoxing Wine has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Beverages (Alcoholic) sector. This continuous investment in analytics has enabled Kuaijishan Shaoxing Wine to build a competitive advantage using analytics. The analytics driven competitive advantage can help Kuaijishan Shaoxing Wine to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Kuaijishan 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.
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. Kuaijishan 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.
Learning at scale
– Online learning technologies has now opened space for Kuaijishan Shaoxing Wine to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Kuaijishan Shaoxing Wine 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 Kuaijishan Shaoxing Wine to hire the very best people irrespective of their geographical location.
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 Kuaijishan Shaoxing Wine in the Beverages (Alcoholic) industry. Now Kuaijishan Shaoxing Wine can target international markets with far fewer capital restrictions requirements than the existing system.
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 Kuaijishan 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.
Buying journey improvements
– Kuaijishan 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Kuaijishan Shaoxing Wine can use these opportunities to build new business models that can help the communities that Kuaijishan Shaoxing Wine operates in. Secondly it can use opportunities from government spending in Beverages (Alcoholic) sector.
Loyalty marketing
– Kuaijishan 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.
Better consumer reach
– The expansion of the 5G network will help Kuaijishan Shaoxing Wine to increase its market reach. Kuaijishan 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.
Threats Kuaijishan Shaoxing Wine External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Kuaijishan Shaoxing Wine are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Beverages (Alcoholic) industry are lowering. It can presents Kuaijishan 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.
Technology acceleration in Forth Industrial Revolution
– Kuaijishan 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, Kuaijishan 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.
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 Beverages (Alcoholic) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Kuaijishan 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.
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. Kuaijishan 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.
Regulatory challenges
– Kuaijishan 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 Kuaijishan Shaoxing Wine in the Beverages (Alcoholic) sector and impact the bottomline of the organization.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Kuaijishan Shaoxing Wine business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Kuaijishan 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. Kuaijishan Shaoxing Wine can take advantage of this fund but it will also bring new competitors in the Beverages (Alcoholic) industry.
Increasing wage structure of Kuaijishan 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 Kuaijishan Shaoxing Wine.
Stagnating economy with rate increase
– Kuaijishan 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Kuaijishan 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.
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. Kuaijishan Shaoxing Wine needs to understand the core reasons impacting the Beverages (Alcoholic) industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Kuaijishan Shaoxing Wine Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Kuaijishan 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 Kuaijishan 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 Kuaijishan 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 Kuaijishan 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 Kuaijishan Shaoxing Wine needs to make to build a sustainable competitive advantage.