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 – cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, supply chains are disrupted by pandemic , increasing household debt because of falling income levels,
there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, 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 -
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.
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.
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.
Highly skilled collaborators
– Zhejiang Red Dragonfly Footwear has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Footwear industry. Secondly the value chain collaborators of Zhejiang Red Dragonfly Footwear have helped the firm to develop new products and bring them quickly to the marketplace.
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.
Low bargaining power of suppliers
– Suppliers of Zhejiang Red Dragonfly Footwear in the Consumer Cyclical sector have low bargaining power. Zhejiang Red Dragonfly Footwear has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Zhejiang Red Dragonfly Footwear to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
Innovation driven organization
– Zhejiang Red Dragonfly Footwear is one of the most innovative firm in Footwear sector.
Analytics focus
– Zhejiang Red Dragonfly Footwear 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 Footwear 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.
Strong track record of project management in the Footwear industry
– Zhejiang Red Dragonfly Footwear 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 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 -
Low market penetration in new markets
– Outside its home market of China, Zhejiang Red Dragonfly Footwear needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
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.
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.
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 Red Dragonfly Footwear supply chain. Even after few cautionary changes, Zhejiang Red Dragonfly Footwear is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Zhejiang Red Dragonfly Footwear vulnerable to further global disruptions in South East Asia.
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.
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.
Need for greater diversity
– Zhejiang Red Dragonfly Footwear 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.
No frontier risks strategy
– From the 10K / annual statement of Zhejiang Red Dragonfly Footwear, it seems that company is thinking out the frontier risks that can impact Footwear 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.
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.
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 -
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.
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.
Developing new processes and practices
– Zhejiang Red Dragonfly Footwear can develop new processes and procedures in Footwear 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Zhejiang Red Dragonfly Footwear in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Footwear industry, and it will provide faster access to the consumers.
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.
Building a culture of innovation
– managers at Zhejiang Red Dragonfly Footwear 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 Footwear industry.
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.
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.
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.
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.
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.
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.
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 -
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.
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.
Stagnating economy with rate increase
– Zhejiang Red Dragonfly Footwear 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 Footwear industry.
Shortening product life cycle
– it is one of the major threat that Zhejiang Red Dragonfly Footwear is facing in Footwear sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Zhejiang Red Dragonfly Footwear 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 Footwear industry regulations.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Zhejiang Red Dragonfly Footwear in Footwear industry. The Footwear 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.
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.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Zhejiang Red Dragonfly Footwear in the Footwear sector and impact the bottomline of the organization.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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.
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.
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 Red Dragonfly Footwear 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.
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.