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 – competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, geopolitical disruptions, increasing commodity prices, increasing government debt because of Covid-19 spendings,
cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, 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 -
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.
Analytics focus
– Kuaijishan 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.
Effective Research and Development (R&D)
– Kuaijishan Shaoxing Wine has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Kuaijishan Shaoxing Wine staying ahead in the Beverages (Alcoholic) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
High switching costs
– The high switching costs that Kuaijishan Shaoxing Wine 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.
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.
Organizational Resilience of Kuaijishan Shaoxing Wine
– The covid-19 pandemic has put organizational resilience at the centre of everthing Kuaijishan Shaoxing Wine does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
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.
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.
Strong track record of project management in the Beverages (Alcoholic) industry
– Kuaijishan 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.
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 -
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.
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.
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 Kuaijishan Shaoxing Wine supply chain. Even after few cautionary changes, Kuaijishan Shaoxing Wine is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Kuaijishan Shaoxing Wine vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– From the 10K / annual statement of Kuaijishan 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.
Skills based hiring in Beverages (Alcoholic) industry
– The stress on hiring functional specialists at Kuaijishan 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.
Employees’ less understanding of Kuaijishan Shaoxing Wine strategy
– From the outside it seems that the employees of Kuaijishan 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.
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.
High bargaining power of channel partners in Beverages (Alcoholic) industry
– because of the regulatory requirements in China, Kuaijishan 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.
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.
High cash cycle compare to competitors
Kuaijishan 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.
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.
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 -
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.
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.
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.
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.
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.
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.
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. Kuaijishan 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. Kuaijishan 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.
Building a culture of innovation
– managers at Kuaijishan 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Kuaijishan Shaoxing Wine is facing challenges because of the dominance of functional experts in the organization. Kuaijishan 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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Kuaijishan 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.
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.
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.
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 -
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.
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Kuaijishan 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.
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.
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.
High dependence on third party suppliers
– Kuaijishan 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.
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kuaijishan 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 Kuaijishan Shaoxing Wine prominent markets.
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.
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.
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 Kuaijishan Shaoxing Wine.
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.