Guangbo Group A (2103) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Guangbo Group A (China)

Based on various researches at Oak Spring University , Guangbo Group A is operating in a macro-environment that has been destablized by – cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, increasing transportation and logistics costs, increasing household debt because of falling income levels, wage bills are increasing, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, etc

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Introduction to SWOT Analysis of Guangbo Group A

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Guangbo Group A can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Guangbo Group A, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Guangbo Group A 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Guangbo Group A can be done for the following purposes –
1. Strategic planning of Guangbo Group A
2. Improving business portfolio management of Guangbo Group A
3. Assessing feasibility of the new initiative in China
4. Making a Office Supplies sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Guangbo Group A

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Strengths of Guangbo Group A | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Guangbo Group A are -

Diverse revenue streams

– Guangbo Group A is present in almost all the verticals within the Office Supplies industry. This has provided Guangbo Group A 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 recruit top talent

– Guangbo Group A is one of the leading players in the Office Supplies 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.

Sustainable margins compare to other players in Office Supplies industry

– Guangbo Group A has clearly differentiated products in the market place. This has enabled Guangbo Group A to fetch slight price premium compare to the competitors in the Office Supplies industry. The sustainable margins have also helped Guangbo Group A to invest into research and development (R&D) and innovation.

Low bargaining power of suppliers

– Suppliers of Guangbo Group A in the Consumer/Non-Cyclical sector have low bargaining power. Guangbo Group A has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Guangbo Group A to manage not only supply disruptions but also source products at highly competitive prices.

High brand equity

– Guangbo Group A has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Guangbo Group A to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Highly skilled collaborators

– Guangbo Group A has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Office Supplies industry. Secondly the value chain collaborators of Guangbo Group A have helped the firm to develop new products and bring them quickly to the marketplace.

Analytics focus

– Guangbo Group A 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 Office Supplies 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.

Superior customer experience

– The customer experience strategy of Guangbo Group A in Office Supplies industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Organizational Resilience of Guangbo Group A

– The covid-19 pandemic has put organizational resilience at the centre of everthing Guangbo Group A does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Operational resilience

– The operational resilience strategy of Guangbo Group A comprises – understanding the underlying the factors in the Office Supplies 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 Office Supplies industry

- digital transformation varies from industry to industry. For Guangbo Group A digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Guangbo Group A 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.

Innovation driven organization

– Guangbo Group A is one of the most innovative firm in Office Supplies sector.

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Weaknesses of Guangbo Group A | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Guangbo Group A are -

Slow decision making process

– As mentioned earlier in the report, Guangbo Group A has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Office Supplies industry over the last five years. Guangbo Group A 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.

No frontier risks strategy

– From the 10K / annual statement of Guangbo Group A, it seems that company is thinking out the frontier risks that can impact Office Supplies 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.

Workers concerns about automation

– As automation is fast increasing in the Office Supplies industry, Guangbo Group A 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.

Increasing silos among functional specialists

– The organizational structure of Guangbo Group A is dominated by functional specialists. It is not different from other players in the Office Supplies industry, but Guangbo Group A needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Guangbo Group A to focus more on services in the Office Supplies industry rather than just following the product oriented approach.

High cash cycle compare to competitors

Guangbo Group A has a high cash cycle compare to other players in the Office Supplies industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Interest costs

– Compare to the competition, Guangbo Group A 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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Guangbo Group A is slow explore the new channels of communication. These new channels of communication can help Guangbo Group A to provide better information regarding Office Supplies products and services. It can also build an online community to further reach out to potential customers.

Lack of clear differentiation of Guangbo Group A products

– To increase the profitability and margins on the products, Guangbo Group A needs to provide more differentiated products than what it is currently offering in the marketplace.

Need for greater diversity

– Guangbo Group A 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.

Employees’ less understanding of Guangbo Group A strategy

– From the outside it seems that the employees of Guangbo Group A 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.

Slow to strategic competitive environment developments

– As Guangbo Group A is one of the leading players in the Office Supplies industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Office Supplies industry in last five years.

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Guangbo Group A Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Guangbo Group A are -

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Guangbo Group A can use these opportunities to build new business models that can help the communities that Guangbo Group A operates in. Secondly it can use opportunities from government spending in Office Supplies sector.

Manufacturing automation

– Guangbo Group A can use the latest technology developments to improve its manufacturing and designing process in Office Supplies 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.

Identify volunteer opportunities

– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Guangbo Group A can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Creating value in data economy

– The success of analytics program of Guangbo Group A has opened avenues for new revenue streams for the organization in Office Supplies industry. This can help Guangbo Group A to build a more holistic ecosystem for Guangbo Group A products in the Office Supplies industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Guangbo Group A can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Low interest rates

– Even though inflation is raising its head in most developed economies, Guangbo Group A can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Guangbo Group A 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 Guangbo Group A to hire the very best people irrespective of their geographical location.

Developing new processes and practices

– Guangbo Group A can develop new processes and procedures in Office Supplies 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.

Leveraging digital technologies

– Guangbo Group A 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Guangbo Group A in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Office Supplies industry, and it will provide faster access to the consumers.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Guangbo Group A is facing challenges because of the dominance of functional experts in the organization. Guangbo Group A can utilize new technology in the field of Office Supplies industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Loyalty marketing

– Guangbo Group A 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.

Using analytics as competitive advantage

– Guangbo Group A has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Office Supplies sector. This continuous investment in analytics has enabled Guangbo Group A to build a competitive advantage using analytics. The analytics driven competitive advantage can help Guangbo Group A to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

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Threats Guangbo Group A External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Guangbo Group A are -

Regulatory challenges

– Guangbo Group A 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 Office Supplies industry regulations.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Guangbo Group A 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 Guangbo Group A prominent markets.

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. Guangbo Group A needs to understand the core reasons impacting the Office Supplies industry. This will help it in building a better workplace.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Guangbo Group A in Office Supplies industry. The Office Supplies 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 dependence on third party suppliers

– Guangbo Group A 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.

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. Guangbo Group A 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.

Stagnating economy with rate increase

– Guangbo Group A 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 Office Supplies industry.

Increasing wage structure of Guangbo Group A

– 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 Guangbo Group A.

Consumer confidence and its impact on Guangbo Group A demand

– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in Office Supplies industry and other sectors.

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.

Environmental challenges

– Guangbo Group A 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. Guangbo Group A can take advantage of this fund but it will also bring new competitors in the Office Supplies industry.

Shortening product life cycle

– it is one of the major threat that Guangbo Group A is facing in Office Supplies sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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 Guangbo Group A.

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Weighted SWOT Analysis of Guangbo Group A Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Guangbo Group A 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 Guangbo Group A 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 Guangbo Group A 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 Guangbo Group A 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 Guangbo Group A needs to make to build a sustainable competitive advantage.

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