SWOT Analysis / TOWS Matrix for Ningxia Zhongyin Cashmere (China)
Based on various researches at Oak Spring University , Ningxia Zhongyin Cashmere is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, there is backlash against globalization, wage bills are increasing, geopolitical disruptions, technology disruption, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Ningxia Zhongyin Cashmere
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Ningxia Zhongyin Cashmere can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ningxia Zhongyin Cashmere, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ningxia Zhongyin Cashmere 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 Ningxia Zhongyin Cashmere can be done for the following purposes –
1. Strategic planning of Ningxia Zhongyin Cashmere
2. Improving business portfolio management of Ningxia Zhongyin Cashmere
3. Assessing feasibility of the new initiative in China
4. Making a Apparel/Accessories sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ningxia Zhongyin Cashmere
Strengths of Ningxia Zhongyin Cashmere | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ningxia Zhongyin Cashmere are -
High brand equity
– Ningxia Zhongyin Cashmere has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ningxia Zhongyin Cashmere to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Ningxia Zhongyin Cashmere 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 Ningxia Zhongyin Cashmere is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Ningxia Zhongyin Cashmere emphasize – knowledge, initiative, and innovation.
Ability to lead change in Apparel/Accessories
– Ningxia Zhongyin Cashmere is one of the leading players in the Apparel/Accessories industry in China. Over the years it has not only transformed the business landscape in the Apparel/Accessories industry in China but also across the existing markets. The ability to lead change has enabled Ningxia Zhongyin Cashmere in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Apparel/Accessories industry
- digital transformation varies from industry to industry. For Ningxia Zhongyin Cashmere digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ningxia Zhongyin Cashmere 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.
High switching costs
– The high switching costs that Ningxia Zhongyin Cashmere 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.
Operational resilience
– The operational resilience strategy of Ningxia Zhongyin Cashmere comprises – understanding the underlying the factors in the Apparel/Accessories 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.
Innovation driven organization
– Ningxia Zhongyin Cashmere is one of the most innovative firm in Apparel/Accessories sector.
Cross disciplinary teams
– Horizontal connected teams at the Ningxia Zhongyin Cashmere 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.
Successful track record of launching new products
– Ningxia Zhongyin Cashmere has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ningxia Zhongyin Cashmere 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.
Diverse revenue streams
– Ningxia Zhongyin Cashmere is present in almost all the verticals within the Apparel/Accessories industry. This has provided Ningxia Zhongyin Cashmere 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.
Effective Research and Development (R&D)
– Ningxia Zhongyin Cashmere has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Ningxia Zhongyin Cashmere staying ahead in the Apparel/Accessories industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Ningxia Zhongyin Cashmere in Apparel/Accessories industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses of Ningxia Zhongyin Cashmere | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ningxia Zhongyin Cashmere are -
Ability to respond to the competition
– As the decision making is very deliberative at Ningxia Zhongyin Cashmere, in the dynamic environment of Apparel/Accessories industry it has struggled to respond to the nimble upstart competition. Ningxia Zhongyin Cashmere has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, Ningxia Zhongyin Cashmere has high operating costs in the Apparel/Accessories industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Ningxia Zhongyin Cashmere lucrative customers.
Lack of clear differentiation of Ningxia Zhongyin Cashmere products
– To increase the profitability and margins on the products, Ningxia Zhongyin Cashmere needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Ningxia Zhongyin Cashmere supply chain. Even after few cautionary changes, Ningxia Zhongyin Cashmere is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ningxia Zhongyin Cashmere vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Ningxia Zhongyin Cashmere is one of the leading players in the Apparel/Accessories industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Apparel/Accessories industry in last five years.
Interest costs
– Compare to the competition, Ningxia Zhongyin Cashmere 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.
Products dominated business model
– Even though Ningxia Zhongyin Cashmere has some of the most successful models in the Apparel/Accessories industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Ningxia Zhongyin Cashmere should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners in Apparel/Accessories industry
– because of the regulatory requirements in China, Ningxia Zhongyin Cashmere 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 Apparel/Accessories industry.
Low market penetration in new markets
– Outside its home market of China, Ningxia Zhongyin Cashmere needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Ningxia Zhongyin Cashmere is dominated by functional specialists. It is not different from other players in the Apparel/Accessories industry, but Ningxia Zhongyin Cashmere needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ningxia Zhongyin Cashmere to focus more on services in the Apparel/Accessories industry rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Ningxia Zhongyin Cashmere has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Apparel/Accessories industry using digital technology.
Ningxia Zhongyin Cashmere Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Ningxia Zhongyin Cashmere are -
Use of Bitcoin and other crypto currencies for transactions in Apparel/Accessories industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Ningxia Zhongyin Cashmere in the Apparel/Accessories industry. Now Ningxia Zhongyin Cashmere can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Ningxia Zhongyin Cashmere can improve the customer journey of consumers in the Apparel/Accessories 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ningxia Zhongyin Cashmere can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Ningxia Zhongyin Cashmere has opened avenues for new revenue streams for the organization in Apparel/Accessories industry. This can help Ningxia Zhongyin Cashmere to build a more holistic ecosystem for Ningxia Zhongyin Cashmere products in the Apparel/Accessories industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Ningxia Zhongyin Cashmere can use the latest technology developments to improve its manufacturing and designing process in Apparel/Accessories 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, Ningxia Zhongyin Cashmere 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 Ningxia Zhongyin Cashmere to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Apparel/Accessories industry, but it has also influenced the consumer preferences. Ningxia Zhongyin Cashmere can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Ningxia Zhongyin Cashmere has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Apparel/Accessories sector. This continuous investment in analytics has enabled Ningxia Zhongyin Cashmere to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ningxia Zhongyin Cashmere to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Ningxia Zhongyin Cashmere to increase its market reach. Ningxia Zhongyin Cashmere 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ningxia Zhongyin Cashmere in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Apparel/Accessories industry, and it will provide faster access to the consumers.
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 Ningxia Zhongyin Cashmere 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.
Loyalty marketing
– Ningxia Zhongyin Cashmere 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 Ningxia Zhongyin Cashmere 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 Apparel/Accessories industry.
Threats Ningxia Zhongyin Cashmere External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Ningxia Zhongyin Cashmere are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Ningxia Zhongyin Cashmere may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Apparel/Accessories sector.
Increasing wage structure of Ningxia Zhongyin Cashmere
– 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 Ningxia Zhongyin Cashmere.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ningxia Zhongyin Cashmere 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 Ningxia Zhongyin Cashmere 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. Ningxia Zhongyin Cashmere needs to understand the core reasons impacting the Apparel/Accessories industry. This will help it in building a better workplace.
Consumer confidence and its impact on Ningxia Zhongyin Cashmere 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 Apparel/Accessories industry and other sectors.
Shortening product life cycle
– it is one of the major threat that Ningxia Zhongyin Cashmere is facing in Apparel/Accessories sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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
– Ningxia Zhongyin Cashmere 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. Ningxia Zhongyin Cashmere can take advantage of this fund but it will also bring new competitors in the Apparel/Accessories industry.
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 Ningxia Zhongyin Cashmere.
Technology acceleration in Forth Industrial Revolution
– Ningxia Zhongyin Cashmere has witnessed rapid integration of technology during Covid-19 in the Apparel/Accessories industry. As one of the leading players in the industry, Ningxia Zhongyin Cashmere needs to keep up with the evolution of technology in the Apparel/Accessories 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Apparel/Accessories industry are lowering. It can presents Ningxia Zhongyin Cashmere with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Apparel/Accessories sector.
Stagnating economy with rate increase
– Ningxia Zhongyin Cashmere 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 Apparel/Accessories 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. Ningxia Zhongyin Cashmere 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 Ningxia Zhongyin Cashmere Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Ningxia Zhongyin Cashmere 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 Ningxia Zhongyin Cashmere 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 Ningxia Zhongyin Cashmere 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 Ningxia Zhongyin Cashmere 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 Ningxia Zhongyin Cashmere needs to make to build a sustainable competitive advantage.