Zhejiang Red Dragonfly Footwear (603116) SWOT Analysis / TOWS Matrix / MBA Resources
Footwear
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Zhejiang Red Dragonfly Footwear (China)
Based on various researches at Oak Spring University , Zhejiang Red Dragonfly Footwear is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, increasing energy prices, there is backlash against globalization, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing,
increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, etc
Introduction to SWOT Analysis of Zhejiang Red Dragonfly Footwear
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Zhejiang Red Dragonfly Footwear can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Zhejiang Red Dragonfly Footwear, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Zhejiang Red Dragonfly Footwear 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 Red Dragonfly Footwear can be done for the following purposes –
1. Strategic planning of Zhejiang Red Dragonfly Footwear
2. Improving business portfolio management of Zhejiang Red Dragonfly Footwear
3. Assessing feasibility of the new initiative in China
4. Making a Footwear sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Zhejiang Red Dragonfly Footwear
Strengths of Zhejiang Red Dragonfly Footwear | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Zhejiang Red Dragonfly Footwear are -
Successful track record of launching new products
– Zhejiang Red Dragonfly Footwear has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Zhejiang Red Dragonfly Footwear 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.
Cross disciplinary teams
– Horizontal connected teams at the Zhejiang Red Dragonfly Footwear 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.
Diverse revenue streams
– Zhejiang Red Dragonfly Footwear is present in almost all the verticals within the Footwear industry. This has provided Zhejiang Red Dragonfly Footwear 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.
Ability to lead change in Footwear
– Zhejiang Red Dragonfly Footwear is one of the leading players in the Footwear industry in China. Over the years it has not only transformed the business landscape in the Footwear industry in China but also across the existing markets. The ability to lead change has enabled Zhejiang Red Dragonfly Footwear in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Zhejiang Red Dragonfly Footwear
– The covid-19 pandemic has put organizational resilience at the centre of everthing Zhejiang Red Dragonfly Footwear does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Zhejiang Red Dragonfly Footwear has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Zhejiang Red Dragonfly Footwear to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Zhejiang Red Dragonfly Footwear has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Zhejiang Red Dragonfly Footwear staying ahead in the Footwear industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Zhejiang Red Dragonfly Footwear has one of the best training and development program in Consumer 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.
Operational resilience
– The operational resilience strategy of Zhejiang Red Dragonfly Footwear comprises – understanding the underlying the factors in the Footwear 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.
Ability to recruit top talent
– Zhejiang Red Dragonfly Footwear is one of the leading players in the Footwear 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.
Learning organization
- Zhejiang Red Dragonfly Footwear 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 Red Dragonfly Footwear is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Zhejiang Red Dragonfly Footwear emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Footwear industry
– Zhejiang Red Dragonfly Footwear has clearly differentiated products in the market place. This has enabled Zhejiang Red Dragonfly Footwear to fetch slight price premium compare to the competitors in the Footwear industry. The sustainable margins have also helped Zhejiang Red Dragonfly Footwear to invest into research and development (R&D) and innovation.
Weaknesses of Zhejiang Red Dragonfly Footwear | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Zhejiang Red Dragonfly Footwear are -
Lack of clear differentiation of Zhejiang Red Dragonfly Footwear products
– To increase the profitability and margins on the products, Zhejiang Red Dragonfly Footwear needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, Zhejiang Red Dragonfly Footwear has high operating costs in the Footwear industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Zhejiang Red Dragonfly Footwear lucrative customers.
High dependence on Zhejiang Red Dragonfly Footwear ‘s star products
– The top 2 products and services of Zhejiang Red Dragonfly Footwear still accounts for major business revenue. This dependence on star products in Footwear industry has resulted into insufficient focus on developing new products, even though Zhejiang Red Dragonfly Footwear has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Zhejiang Red Dragonfly Footwear 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.
Compensation and incentives
– The revenue per employee of Zhejiang Red Dragonfly Footwear is just above the Footwear 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.
High bargaining power of channel partners in Footwear industry
– because of the regulatory requirements in China, Zhejiang Red Dragonfly Footwear 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 Footwear industry.
Products dominated business model
– Even though Zhejiang Red Dragonfly Footwear has some of the most successful models in the Footwear industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Zhejiang Red Dragonfly Footwear should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Zhejiang Red Dragonfly Footwear has a high cash cycle compare to other players in the Footwear 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, Zhejiang Red Dragonfly Footwear is slow explore the new channels of communication. These new channels of communication can help Zhejiang Red Dragonfly Footwear to provide better information regarding Footwear products and services. It can also build an online community to further reach out to potential customers.
Increasing silos among functional specialists
– The organizational structure of Zhejiang Red Dragonfly Footwear is dominated by functional specialists. It is not different from other players in the Footwear industry, but Zhejiang Red Dragonfly Footwear needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Zhejiang Red Dragonfly Footwear to focus more on services in the Footwear industry rather than just following the product oriented approach.
Skills based hiring in Footwear industry
– The stress on hiring functional specialists at Zhejiang Red Dragonfly Footwear 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.
Zhejiang Red Dragonfly Footwear Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Zhejiang Red Dragonfly Footwear are -
Creating value in data economy
– The success of analytics program of Zhejiang Red Dragonfly Footwear has opened avenues for new revenue streams for the organization in Footwear industry. This can help Zhejiang Red Dragonfly Footwear to build a more holistic ecosystem for Zhejiang Red Dragonfly Footwear products in the Footwear industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Zhejiang Red Dragonfly Footwear can use the latest technology developments to improve its manufacturing and designing process in Footwear 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Zhejiang Red Dragonfly Footwear 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 Red Dragonfly Footwear to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Footwear industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Zhejiang Red Dragonfly Footwear 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 Red Dragonfly Footwear 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.
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 Red Dragonfly Footwear 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 Red Dragonfly Footwear can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Zhejiang Red Dragonfly Footwear 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Footwear industry, but it has also influenced the consumer preferences. Zhejiang Red Dragonfly Footwear can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Red Dragonfly Footwear can use these opportunities to build new business models that can help the communities that Zhejiang Red Dragonfly Footwear operates in. Secondly it can use opportunities from government spending in Footwear sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Zhejiang Red Dragonfly Footwear 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 Zhejiang Red Dragonfly Footwear to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Zhejiang Red Dragonfly Footwear can improve the customer journey of consumers in the Footwear 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.
Using analytics as competitive advantage
– Zhejiang Red Dragonfly Footwear has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Footwear sector. This continuous investment in analytics has enabled Zhejiang Red Dragonfly Footwear to build a competitive advantage using analytics. The analytics driven competitive advantage can help Zhejiang Red Dragonfly Footwear to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Use of Bitcoin and other crypto currencies for transactions in Footwear industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Zhejiang Red Dragonfly Footwear in the Footwear industry. Now Zhejiang Red Dragonfly Footwear can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Zhejiang Red Dragonfly Footwear External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Zhejiang Red Dragonfly Footwear are -
Environmental challenges
– Zhejiang Red Dragonfly Footwear 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 Red Dragonfly Footwear can take advantage of this fund but it will also bring new competitors in the Footwear industry.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Zhejiang Red Dragonfly Footwear may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Footwear sector.
High dependence on third party suppliers
– Zhejiang Red Dragonfly Footwear 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.
Easy access to finance
– Easy access to finance in Footwear industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Zhejiang Red Dragonfly Footwear can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Zhejiang Red Dragonfly Footwear
– 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 Red Dragonfly Footwear.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Zhejiang Red Dragonfly Footwear 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 Red Dragonfly Footwear prominent markets.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Footwear industry are lowering. It can presents Zhejiang Red Dragonfly Footwear with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Footwear 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. Zhejiang Red Dragonfly Footwear needs to understand the core reasons impacting the Footwear industry. This will help it in building a better workplace.
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 Red Dragonfly Footwear.
Technology acceleration in Forth Industrial Revolution
– Zhejiang Red Dragonfly Footwear has witnessed rapid integration of technology during Covid-19 in the Footwear industry. As one of the leading players in the industry, Zhejiang Red Dragonfly Footwear needs to keep up with the evolution of technology in the Footwear 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.
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 Red Dragonfly Footwear business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Zhejiang Red Dragonfly Footwear Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Zhejiang Red Dragonfly Footwear 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 Red Dragonfly Footwear 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 Red Dragonfly Footwear 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 Red Dragonfly Footwear 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 Red Dragonfly Footwear needs to make to build a sustainable competitive advantage.