Based on various researches at Oak Spring University , Beijing Urban Rural Commercial is operating in a macro-environment that has been destablized by – increasing commodity prices, technology disruption, wage bills are increasing, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies,
increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Beijing Urban Rural Commercial
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Beijing Urban Rural Commercial can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Beijing Urban Rural Commercial, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Beijing Urban Rural Commercial 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 Beijing Urban Rural Commercial can be done for the following purposes –
1. Strategic planning of Beijing Urban Rural Commercial
2. Improving business portfolio management of Beijing Urban Rural Commercial
3. Assessing feasibility of the new initiative in China
4. Making a Retail (Grocery) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Beijing Urban Rural Commercial
Strengths of Beijing Urban Rural Commercial | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Beijing Urban Rural Commercial are -
Analytics focus
– Beijing Urban Rural Commercial 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 Retail (Grocery) 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.
High switching costs
– The high switching costs that Beijing Urban Rural Commercial 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.
High brand equity
– Beijing Urban Rural Commercial has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Beijing Urban Rural Commercial to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Beijing Urban Rural Commercial has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Beijing Urban Rural Commercial staying ahead in the Retail (Grocery) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Beijing Urban Rural Commercial in the Services sector have low bargaining power. Beijing Urban Rural Commercial has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Beijing Urban Rural Commercial to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Beijing Urban Rural Commercial has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Beijing Urban Rural Commercial 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.
Organizational Resilience of Beijing Urban Rural Commercial
– The covid-19 pandemic has put organizational resilience at the centre of everthing Beijing Urban Rural Commercial does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Retail (Grocery)
– Beijing Urban Rural Commercial is one of the leading players in the Retail (Grocery) industry in China. Over the years it has not only transformed the business landscape in the Retail (Grocery) industry in China but also across the existing markets. The ability to lead change has enabled Beijing Urban Rural Commercial in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Beijing Urban Rural Commercial is one of the leading players in the Retail (Grocery) 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.
Highly skilled collaborators
– Beijing Urban Rural Commercial has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Retail (Grocery) industry. Secondly the value chain collaborators of Beijing Urban Rural Commercial have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Retail (Grocery) industry
- digital transformation varies from industry to industry. For Beijing Urban Rural Commercial digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Beijing Urban Rural Commercial 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.
Learning organization
- Beijing Urban Rural Commercial 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 Beijing Urban Rural Commercial is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Beijing Urban Rural Commercial emphasize – knowledge, initiative, and innovation.
Weaknesses of Beijing Urban Rural Commercial | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Beijing Urban Rural Commercial are -
Need for greater diversity
– Beijing Urban Rural Commercial 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.
Lack of clear differentiation of Beijing Urban Rural Commercial products
– To increase the profitability and margins on the products, Beijing Urban Rural Commercial needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, Beijing Urban Rural Commercial has high operating costs in the Retail (Grocery) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Beijing Urban Rural Commercial lucrative customers.
No frontier risks strategy
– From the 10K / annual statement of Beijing Urban Rural Commercial, it seems that company is thinking out the frontier risks that can impact Retail (Grocery) 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.
Products dominated business model
– Even though Beijing Urban Rural Commercial has some of the most successful models in the Retail (Grocery) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Beijing Urban Rural Commercial should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee of Beijing Urban Rural Commercial is just above the Retail (Grocery) 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 dependence on Beijing Urban Rural Commercial ‘s star products
– The top 2 products and services of Beijing Urban Rural Commercial still accounts for major business revenue. This dependence on star products in Retail (Grocery) industry has resulted into insufficient focus on developing new products, even though Beijing Urban Rural Commercial has relatively successful track record of launching new products.
High cash cycle compare to competitors
Beijing Urban Rural Commercial has a high cash cycle compare to other players in the Retail (Grocery) industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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 Beijing Urban Rural Commercial supply chain. Even after few cautionary changes, Beijing Urban Rural Commercial is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Beijing Urban Rural Commercial vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Beijing Urban Rural Commercial is one of the leading players in the Retail (Grocery) industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Retail (Grocery) industry in last five years.
Skills based hiring in Retail (Grocery) industry
– The stress on hiring functional specialists at Beijing Urban Rural Commercial 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.
Beijing Urban Rural Commercial Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Beijing Urban Rural Commercial are -
Loyalty marketing
– Beijing Urban Rural Commercial 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Beijing Urban Rural Commercial 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Beijing Urban Rural Commercial is facing challenges because of the dominance of functional experts in the organization. Beijing Urban Rural Commercial can utilize new technology in the field of Retail (Grocery) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Creating value in data economy
– The success of analytics program of Beijing Urban Rural Commercial has opened avenues for new revenue streams for the organization in Retail (Grocery) industry. This can help Beijing Urban Rural Commercial to build a more holistic ecosystem for Beijing Urban Rural Commercial products in the Retail (Grocery) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Beijing Urban Rural Commercial 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.
Using analytics as competitive advantage
– Beijing Urban Rural Commercial has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Retail (Grocery) sector. This continuous investment in analytics has enabled Beijing Urban Rural Commercial to build a competitive advantage using analytics. The analytics driven competitive advantage can help Beijing Urban Rural Commercial to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Beijing Urban Rural Commercial can use these opportunities to build new business models that can help the communities that Beijing Urban Rural Commercial operates in. Secondly it can use opportunities from government spending in Retail (Grocery) sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Beijing Urban Rural Commercial can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Beijing Urban Rural Commercial to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Manufacturing automation
– Beijing Urban Rural Commercial can use the latest technology developments to improve its manufacturing and designing process in Retail (Grocery) 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.
Building a culture of innovation
– managers at Beijing Urban Rural Commercial 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 Retail (Grocery) industry.
Buying journey improvements
– Beijing Urban Rural Commercial can improve the customer journey of consumers in the Retail (Grocery) 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.
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 Beijing Urban Rural Commercial 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.
Threats Beijing Urban Rural Commercial External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Beijing Urban Rural Commercial are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Beijing Urban Rural Commercial 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 Beijing Urban Rural Commercial prominent markets.
Increasing wage structure of Beijing Urban Rural Commercial
– 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 Beijing Urban Rural Commercial.
Environmental challenges
– Beijing Urban Rural Commercial 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. Beijing Urban Rural Commercial can take advantage of this fund but it will also bring new competitors in the Retail (Grocery) industry.
Stagnating economy with rate increase
– Beijing Urban Rural Commercial 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 Retail (Grocery) 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 Beijing Urban Rural Commercial.
Regulatory challenges
– Beijing Urban Rural Commercial 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 Retail (Grocery) industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Beijing Urban Rural Commercial in Retail (Grocery) industry. The Retail (Grocery) 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
– Beijing Urban Rural Commercial 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.
Consumer confidence and its impact on Beijing Urban Rural Commercial 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 Retail (Grocery) industry and other sectors.
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 Beijing Urban Rural Commercial in the Retail (Grocery) sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Retail (Grocery) industry are lowering. It can presents Beijing Urban Rural Commercial with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Retail (Grocery) 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. Beijing Urban Rural Commercial needs to understand the core reasons impacting the Retail (Grocery) industry. This will help it in building a better workplace.
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. Beijing Urban Rural Commercial 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 Beijing Urban Rural Commercial Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Beijing Urban Rural Commercial 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 Beijing Urban Rural Commercial 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 Beijing Urban Rural Commercial 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 Beijing Urban Rural Commercial 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 Beijing Urban Rural Commercial needs to make to build a sustainable competitive advantage.
