SWOT Analysis / TOWS Matrix for Shanghai No1 Pharm (China)
Based on various researches at Oak Spring University , Shanghai No1 Pharm is operating in a macro-environment that has been destablized by – technology disruption, increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, increasing commodity prices, increasing energy prices, wage bills are increasing, supply chains are disrupted by pandemic ,
talent flight as more people leaving formal jobs, there is backlash against globalization, etc
Introduction to SWOT Analysis of Shanghai No1 Pharm
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Shanghai No1 Pharm can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shanghai No1 Pharm, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shanghai No1 Pharm 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 Shanghai No1 Pharm can be done for the following purposes –
1. Strategic planning of Shanghai No1 Pharm
2. Improving business portfolio management of Shanghai No1 Pharm
3. Assessing feasibility of the new initiative in China
4. Making a Retail (Drugs) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Shanghai No1 Pharm
Strengths of Shanghai No1 Pharm | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shanghai No1 Pharm are -
Ability to recruit top talent
– Shanghai No1 Pharm is one of the leading players in the Retail (Drugs) 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.
Learning organization
- Shanghai No1 Pharm 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 Shanghai No1 Pharm is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Shanghai No1 Pharm emphasize – knowledge, initiative, and innovation.
Training and development
– Shanghai No1 Pharm has one of the best training and development program in Services industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Highly skilled collaborators
– Shanghai No1 Pharm has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Retail (Drugs) industry. Secondly the value chain collaborators of Shanghai No1 Pharm have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Shanghai No1 Pharm
– The covid-19 pandemic has put organizational resilience at the centre of everthing Shanghai No1 Pharm does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Shanghai No1 Pharm has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Shanghai No1 Pharm 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.
Low bargaining power of suppliers
– Suppliers of Shanghai No1 Pharm in the Services sector have low bargaining power. Shanghai No1 Pharm has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shanghai No1 Pharm to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Shanghai No1 Pharm is one of the most innovative firm in Retail (Drugs) sector.
Digital Transformation in Retail (Drugs) industry
- digital transformation varies from industry to industry. For Shanghai No1 Pharm digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shanghai No1 Pharm 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.
Cross disciplinary teams
– Horizontal connected teams at the Shanghai No1 Pharm 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.
Superior customer experience
– The customer experience strategy of Shanghai No1 Pharm in Retail (Drugs) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy of Shanghai No1 Pharm comprises – understanding the underlying the factors in the Retail (Drugs) 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.
Weaknesses of Shanghai No1 Pharm | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shanghai No1 Pharm are -
Increasing silos among functional specialists
– The organizational structure of Shanghai No1 Pharm is dominated by functional specialists. It is not different from other players in the Retail (Drugs) industry, but Shanghai No1 Pharm needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Shanghai No1 Pharm to focus more on services in the Retail (Drugs) industry rather than just following the product oriented approach.
Employees’ less understanding of Shanghai No1 Pharm strategy
– From the outside it seems that the employees of Shanghai No1 Pharm 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.
Aligning sales with marketing
– From the outside it seems that Shanghai No1 Pharm needs to have more collaboration between its sales team and marketing team. Sales professionals in the Retail (Drugs) industry have deep experience in developing customer relationships. Marketing department at Shanghai No1 Pharm can leverage the sales team experience to cultivate customer relationships as Shanghai No1 Pharm is planning to shift buying processes online.
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 Shanghai No1 Pharm supply chain. Even after few cautionary changes, Shanghai No1 Pharm is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Shanghai No1 Pharm vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the Retail (Drugs) industry, Shanghai No1 Pharm 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.
High cash cycle compare to competitors
Shanghai No1 Pharm has a high cash cycle compare to other players in the Retail (Drugs) industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Compensation and incentives
– The revenue per employee of Shanghai No1 Pharm is just above the Retail (Drugs) 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.
Slow decision making process
– As mentioned earlier in the report, Shanghai No1 Pharm has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Retail (Drugs) industry over the last five years. Shanghai No1 Pharm 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Shanghai No1 Pharm is slow explore the new channels of communication. These new channels of communication can help Shanghai No1 Pharm to provide better information regarding Retail (Drugs) products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, Shanghai No1 Pharm has high operating costs in the Retail (Drugs) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Shanghai No1 Pharm lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative at Shanghai No1 Pharm, in the dynamic environment of Retail (Drugs) industry it has struggled to respond to the nimble upstart competition. Shanghai No1 Pharm has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Shanghai No1 Pharm Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Shanghai No1 Pharm are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Shanghai No1 Pharm 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 Shanghai No1 Pharm to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Shanghai No1 Pharm has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Retail (Drugs) sector. This continuous investment in analytics has enabled Shanghai No1 Pharm to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shanghai No1 Pharm to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Shanghai No1 Pharm can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Shanghai No1 Pharm can use the latest technology developments to improve its manufacturing and designing process in Retail (Drugs) 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.
Better consumer reach
– The expansion of the 5G network will help Shanghai No1 Pharm to increase its market reach. Shanghai No1 Pharm 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.
Learning at scale
– Online learning technologies has now opened space for Shanghai No1 Pharm 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.
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 Shanghai No1 Pharm 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.
Creating value in data economy
– The success of analytics program of Shanghai No1 Pharm has opened avenues for new revenue streams for the organization in Retail (Drugs) industry. This can help Shanghai No1 Pharm to build a more holistic ecosystem for Shanghai No1 Pharm products in the Retail (Drugs) 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 Shanghai No1 Pharm in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Retail (Drugs) industry, and it will provide faster access to the consumers.
Developing new processes and practices
– Shanghai No1 Pharm can develop new processes and procedures in Retail (Drugs) 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Shanghai No1 Pharm can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Shanghai No1 Pharm 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 (Drugs) industry.
Loyalty marketing
– Shanghai No1 Pharm 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.
Threats Shanghai No1 Pharm External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Shanghai No1 Pharm are -
Stagnating economy with rate increase
– Shanghai No1 Pharm 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 (Drugs) industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Retail (Drugs) industry are lowering. It can presents Shanghai No1 Pharm with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Retail (Drugs) sector.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Shanghai No1 Pharm business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Shanghai No1 Pharm in Retail (Drugs) industry. The Retail (Drugs) 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
– Shanghai No1 Pharm 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. Shanghai No1 Pharm can take advantage of this fund but it will also bring new competitors in the Retail (Drugs) industry.
Increasing wage structure of Shanghai No1 Pharm
– 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 Shanghai No1 Pharm.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
High dependence on third party suppliers
– Shanghai No1 Pharm 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.
Shortening product life cycle
– it is one of the major threat that Shanghai No1 Pharm is facing in Retail (Drugs) 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.
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. Shanghai No1 Pharm needs to understand the core reasons impacting the Retail (Drugs) industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Shanghai No1 Pharm has witnessed rapid integration of technology during Covid-19 in the Retail (Drugs) industry. As one of the leading players in the industry, Shanghai No1 Pharm needs to keep up with the evolution of technology in the Retail (Drugs) 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.
Regulatory challenges
– Shanghai No1 Pharm 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 (Drugs) industry regulations.
Weighted SWOT Analysis of Shanghai No1 Pharm Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Shanghai No1 Pharm 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 Shanghai No1 Pharm 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 Shanghai No1 Pharm 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 Shanghai No1 Pharm 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 Shanghai No1 Pharm needs to make to build a sustainable competitive advantage.