SDIC Zhonglu Fruit Juice (600962) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for SDIC Zhonglu Fruit Juice (China)

Based on various researches at Oak Spring University , SDIC Zhonglu Fruit Juice is operating in a macro-environment that has been destablized by – cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, etc

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Introduction to SWOT Analysis of SDIC Zhonglu Fruit Juice

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that SDIC Zhonglu Fruit Juice can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the SDIC Zhonglu Fruit Juice, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which SDIC Zhonglu Fruit Juice 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 SDIC Zhonglu Fruit Juice can be done for the following purposes –
1. Strategic planning of SDIC Zhonglu Fruit Juice
2. Improving business portfolio management of SDIC Zhonglu Fruit Juice
3. Assessing feasibility of the new initiative in China
4. Making a Beverages (Nonalcoholic) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of SDIC Zhonglu Fruit Juice

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Strengths of SDIC Zhonglu Fruit Juice | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of SDIC Zhonglu Fruit Juice are -

Training and development

– SDIC Zhonglu Fruit Juice has one of the best training and development program in Consumer/Non-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.

High brand equity

– SDIC Zhonglu Fruit Juice has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled SDIC Zhonglu Fruit Juice to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Sustainable margins compare to other players in Beverages (Nonalcoholic) industry

– SDIC Zhonglu Fruit Juice has clearly differentiated products in the market place. This has enabled SDIC Zhonglu Fruit Juice to fetch slight price premium compare to the competitors in the Beverages (Nonalcoholic) industry. The sustainable margins have also helped SDIC Zhonglu Fruit Juice to invest into research and development (R&D) and innovation.

Operational resilience

– The operational resilience strategy of SDIC Zhonglu Fruit Juice comprises – understanding the underlying the factors in the Beverages (Nonalcoholic) 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

– SDIC Zhonglu Fruit Juice is one of the leading players in the Beverages (Nonalcoholic) 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.

Successful track record of launching new products

– SDIC Zhonglu Fruit Juice has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. SDIC Zhonglu Fruit Juice 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.

Ability to lead change in Beverages (Nonalcoholic)

– SDIC Zhonglu Fruit Juice is one of the leading players in the Beverages (Nonalcoholic) industry in China. Over the years it has not only transformed the business landscape in the Beverages (Nonalcoholic) industry in China but also across the existing markets. The ability to lead change has enabled SDIC Zhonglu Fruit Juice in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Diverse revenue streams

– SDIC Zhonglu Fruit Juice is present in almost all the verticals within the Beverages (Nonalcoholic) industry. This has provided SDIC Zhonglu Fruit Juice 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.

Innovation driven organization

– SDIC Zhonglu Fruit Juice is one of the most innovative firm in Beverages (Nonalcoholic) sector.

Learning organization

- SDIC Zhonglu Fruit Juice 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 SDIC Zhonglu Fruit Juice is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at SDIC Zhonglu Fruit Juice emphasize – knowledge, initiative, and innovation.

High switching costs

– The high switching costs that SDIC Zhonglu Fruit Juice 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.

Digital Transformation in Beverages (Nonalcoholic) industry

- digital transformation varies from industry to industry. For SDIC Zhonglu Fruit Juice digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. SDIC Zhonglu Fruit Juice 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.

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Weaknesses of SDIC Zhonglu Fruit Juice | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of SDIC Zhonglu Fruit Juice are -

Compensation and incentives

– The revenue per employee of SDIC Zhonglu Fruit Juice is just above the Beverages (Nonalcoholic) 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.

Interest costs

– Compare to the competition, SDIC Zhonglu Fruit Juice 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 bargaining power of channel partners in Beverages (Nonalcoholic) industry

– because of the regulatory requirements in China, SDIC Zhonglu Fruit Juice 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 Beverages (Nonalcoholic) industry.

Capital Spending Reduction

– Even during the low interest decade, SDIC Zhonglu Fruit Juice 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 Beverages (Nonalcoholic) industry using digital technology.

Employees’ less understanding of SDIC Zhonglu Fruit Juice strategy

– From the outside it seems that the employees of SDIC Zhonglu Fruit Juice 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.

Workers concerns about automation

– As automation is fast increasing in the Beverages (Nonalcoholic) industry, SDIC Zhonglu Fruit Juice 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.

No frontier risks strategy

– From the 10K / annual statement of SDIC Zhonglu Fruit Juice, it seems that company is thinking out the frontier risks that can impact Beverages (Nonalcoholic) 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.

Low market penetration in new markets

– Outside its home market of China, SDIC Zhonglu Fruit Juice needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

High cash cycle compare to competitors

SDIC Zhonglu Fruit Juice has a high cash cycle compare to other players in the Beverages (Nonalcoholic) 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 SDIC Zhonglu Fruit Juice ‘s star products

– The top 2 products and services of SDIC Zhonglu Fruit Juice still accounts for major business revenue. This dependence on star products in Beverages (Nonalcoholic) industry has resulted into insufficient focus on developing new products, even though SDIC Zhonglu Fruit Juice has relatively successful track record of launching new products.

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 SDIC Zhonglu Fruit Juice supply chain. Even after few cautionary changes, SDIC Zhonglu Fruit Juice is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left SDIC Zhonglu Fruit Juice vulnerable to further global disruptions in South East Asia.

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SDIC Zhonglu Fruit Juice Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of SDIC Zhonglu Fruit Juice are -

Creating value in data economy

– The success of analytics program of SDIC Zhonglu Fruit Juice has opened avenues for new revenue streams for the organization in Beverages (Nonalcoholic) industry. This can help SDIC Zhonglu Fruit Juice to build a more holistic ecosystem for SDIC Zhonglu Fruit Juice products in the Beverages (Nonalcoholic) industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Lowering marketing communication costs

– 5G expansion will open new opportunities for SDIC Zhonglu Fruit Juice in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Beverages (Nonalcoholic) industry, and it will provide faster access to the consumers.

Use of Bitcoin and other crypto currencies for transactions in Beverages (Nonalcoholic) industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for SDIC Zhonglu Fruit Juice in the Beverages (Nonalcoholic) industry. Now SDIC Zhonglu Fruit Juice can target international markets with far fewer capital restrictions requirements than the existing system.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, SDIC Zhonglu Fruit Juice can use these opportunities to build new business models that can help the communities that SDIC Zhonglu Fruit Juice operates in. Secondly it can use opportunities from government spending in Beverages (Nonalcoholic) sector.

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 SDIC Zhonglu Fruit Juice 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.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Beverages (Nonalcoholic) industry, but it has also influenced the consumer preferences. SDIC Zhonglu Fruit Juice can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, SDIC Zhonglu Fruit Juice 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 SDIC Zhonglu Fruit Juice to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Redefining models of collaboration and team work

– As explained in the weaknesses section, SDIC Zhonglu Fruit Juice is facing challenges because of the dominance of functional experts in the organization. SDIC Zhonglu Fruit Juice can utilize new technology in the field of Beverages (Nonalcoholic) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Buying journey improvements

– SDIC Zhonglu Fruit Juice can improve the customer journey of consumers in the Beverages (Nonalcoholic) 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.

Loyalty marketing

– SDIC Zhonglu Fruit Juice 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.

Manufacturing automation

– SDIC Zhonglu Fruit Juice can use the latest technology developments to improve its manufacturing and designing process in Beverages (Nonalcoholic) 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, SDIC Zhonglu Fruit Juice 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.

Learning at scale

– Online learning technologies has now opened space for SDIC Zhonglu Fruit Juice 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.

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Threats SDIC Zhonglu Fruit Juice External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of SDIC Zhonglu Fruit Juice are -

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 SDIC Zhonglu Fruit Juice business can come under increasing regulations regarding data privacy, data security, etc.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, SDIC Zhonglu Fruit Juice may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Beverages (Nonalcoholic) sector.

Stagnating economy with rate increase

– SDIC Zhonglu Fruit Juice 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 Beverages (Nonalcoholic) industry.

High dependence on third party suppliers

– SDIC Zhonglu Fruit Juice 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.

Technology acceleration in Forth Industrial Revolution

– SDIC Zhonglu Fruit Juice has witnessed rapid integration of technology during Covid-19 in the Beverages (Nonalcoholic) industry. As one of the leading players in the industry, SDIC Zhonglu Fruit Juice needs to keep up with the evolution of technology in the Beverages (Nonalcoholic) 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.

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 SDIC Zhonglu Fruit Juice in the Beverages (Nonalcoholic) sector and impact the bottomline of the organization.

Regulatory challenges

– SDIC Zhonglu Fruit Juice 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 Beverages (Nonalcoholic) industry regulations.

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. SDIC Zhonglu Fruit Juice needs to understand the core reasons impacting the Beverages (Nonalcoholic) industry. This will help it in building a better workplace.

Increasing wage structure of SDIC Zhonglu Fruit Juice

– 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 SDIC Zhonglu Fruit Juice.

Consumer confidence and its impact on SDIC Zhonglu Fruit Juice 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 Beverages (Nonalcoholic) industry and other sectors.

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. SDIC Zhonglu Fruit Juice 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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for SDIC Zhonglu Fruit Juice in Beverages (Nonalcoholic) industry. The Beverages (Nonalcoholic) 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.

Environmental challenges

– SDIC Zhonglu Fruit Juice 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. SDIC Zhonglu Fruit Juice can take advantage of this fund but it will also bring new competitors in the Beverages (Nonalcoholic) industry.

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Weighted SWOT Analysis of SDIC Zhonglu Fruit Juice Template, Example

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

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