Cre8 Direct Ningbo (300703) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Cre8 Direct Ningbo (China)

Based on various researches at Oak Spring University , Cre8 Direct Ningbo is operating in a macro-environment that has been destablized by – wage bills are increasing, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, increasing energy prices, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , etc

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Introduction to SWOT Analysis of Cre8 Direct Ningbo

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Cre8 Direct Ningbo can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cre8 Direct Ningbo, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cre8 Direct Ningbo 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 Cre8 Direct Ningbo can be done for the following purposes –
1. Strategic planning of Cre8 Direct Ningbo
2. Improving business portfolio management of Cre8 Direct Ningbo
3. Assessing feasibility of the new initiative in China
4. Making a Office Supplies sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Cre8 Direct Ningbo

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Strengths of Cre8 Direct Ningbo | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Cre8 Direct Ningbo are -

High switching costs

– The high switching costs that Cre8 Direct Ningbo 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.

Superior customer experience

– The customer experience strategy of Cre8 Direct Ningbo in Office Supplies industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Innovation driven organization

– Cre8 Direct Ningbo is one of the most innovative firm in Office Supplies sector.

Analytics focus

– Cre8 Direct Ningbo is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the Office Supplies industry. The technology infrastructure of China is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.

Ability to recruit top talent

– Cre8 Direct Ningbo is one of the leading players in the Office Supplies industry in China. It is in a position to attract the best talent available in China. The firm has a robust talent identification program that helps in identifying the brightest.

Effective Research and Development (R&D)

– Cre8 Direct Ningbo has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Cre8 Direct Ningbo staying ahead in the Office Supplies industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Learning organization

- Cre8 Direct Ningbo 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 Cre8 Direct Ningbo is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Cre8 Direct Ningbo emphasize – knowledge, initiative, and innovation.

Cross disciplinary teams

– Horizontal connected teams at the Cre8 Direct Ningbo 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.

Operational resilience

– The operational resilience strategy of Cre8 Direct Ningbo comprises – understanding the underlying the factors in the Office Supplies industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.

Organizational Resilience of Cre8 Direct Ningbo

– The covid-19 pandemic has put organizational resilience at the centre of everthing Cre8 Direct Ningbo does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Digital Transformation in Office Supplies industry

- digital transformation varies from industry to industry. For Cre8 Direct Ningbo digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cre8 Direct Ningbo 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.

Ability to lead change in Office Supplies

– Cre8 Direct Ningbo is one of the leading players in the Office Supplies industry in China. Over the years it has not only transformed the business landscape in the Office Supplies industry in China but also across the existing markets. The ability to lead change has enabled Cre8 Direct Ningbo in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

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Weaknesses of Cre8 Direct Ningbo | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Cre8 Direct Ningbo are -

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 Cre8 Direct Ningbo supply chain. Even after few cautionary changes, Cre8 Direct Ningbo is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cre8 Direct Ningbo vulnerable to further global disruptions in South East Asia.

No frontier risks strategy

– From the 10K / annual statement of Cre8 Direct Ningbo, it seems that company is thinking out the frontier risks that can impact Office Supplies industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.

High bargaining power of channel partners in Office Supplies industry

– because of the regulatory requirements in China, Cre8 Direct Ningbo 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 Office Supplies industry.

Ability to respond to the competition

– As the decision making is very deliberative at Cre8 Direct Ningbo, in the dynamic environment of Office Supplies industry it has struggled to respond to the nimble upstart competition. Cre8 Direct Ningbo has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Employees’ less understanding of Cre8 Direct Ningbo strategy

– From the outside it seems that the employees of Cre8 Direct Ningbo 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.

Low market penetration in new markets

– Outside its home market of China, Cre8 Direct Ningbo needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Compensation and incentives

– The revenue per employee of Cre8 Direct Ningbo is just above the Office Supplies 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 to strategic competitive environment developments

– As Cre8 Direct Ningbo is one of the leading players in the Office Supplies industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Office Supplies industry in last five years.

High cash cycle compare to competitors

Cre8 Direct Ningbo has a high cash cycle compare to other players in the Office Supplies industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Slow decision making process

– As mentioned earlier in the report, Cre8 Direct Ningbo has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Office Supplies industry over the last five years. Cre8 Direct Ningbo 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.

Skills based hiring in Office Supplies industry

– The stress on hiring functional specialists at Cre8 Direct Ningbo 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.

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Cre8 Direct Ningbo Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Cre8 Direct Ningbo are -

Building a culture of innovation

– managers at Cre8 Direct Ningbo 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 Office Supplies industry.

Using analytics as competitive advantage

– Cre8 Direct Ningbo has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Office Supplies sector. This continuous investment in analytics has enabled Cre8 Direct Ningbo to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cre8 Direct Ningbo to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Office Supplies industry, but it has also influenced the consumer preferences. Cre8 Direct Ningbo can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Office Supplies industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Cre8 Direct Ningbo can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Cre8 Direct Ningbo can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.

Low interest rates

– Even though inflation is raising its head in most developed economies, Cre8 Direct Ningbo 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.

Leveraging digital technologies

– Cre8 Direct Ningbo 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Cre8 Direct Ningbo can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Loyalty marketing

– Cre8 Direct Ningbo 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.

Better consumer reach

– The expansion of the 5G network will help Cre8 Direct Ningbo to increase its market reach. Cre8 Direct Ningbo 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Cre8 Direct Ningbo is facing challenges because of the dominance of functional experts in the organization. Cre8 Direct Ningbo can utilize new technology in the field of Office Supplies industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Use of Bitcoin and other crypto currencies for transactions in Office Supplies industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Cre8 Direct Ningbo in the Office Supplies industry. Now Cre8 Direct Ningbo 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, Cre8 Direct Ningbo can use these opportunities to build new business models that can help the communities that Cre8 Direct Ningbo operates in. Secondly it can use opportunities from government spending in Office Supplies sector.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Cre8 Direct Ningbo in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Office Supplies industry, and it will provide faster access to the consumers.

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Threats Cre8 Direct Ningbo External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Cre8 Direct Ningbo are -

Regulatory challenges

– Cre8 Direct Ningbo needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Office Supplies industry regulations.

Increasing wage structure of Cre8 Direct Ningbo

– 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 Cre8 Direct Ningbo.

Consumer confidence and its impact on Cre8 Direct Ningbo demand

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

Shortening product life cycle

– it is one of the major threat that Cre8 Direct Ningbo is facing in Office Supplies sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Office Supplies industry are lowering. It can presents Cre8 Direct Ningbo with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Office Supplies sector.

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 Cre8 Direct Ningbo in the Office Supplies sector and impact the bottomline of the organization.

Stagnating economy with rate increase

– Cre8 Direct Ningbo can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the Office Supplies industry.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Cre8 Direct Ningbo 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 Cre8 Direct Ningbo prominent markets.

Easy access to finance

– Easy access to finance in Office Supplies industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Cre8 Direct Ningbo can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Technology acceleration in Forth Industrial Revolution

– Cre8 Direct Ningbo has witnessed rapid integration of technology during Covid-19 in the Office Supplies industry. As one of the leading players in the industry, Cre8 Direct Ningbo needs to keep up with the evolution of technology in the Office Supplies 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.

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 Cre8 Direct Ningbo business can come under increasing regulations regarding data privacy, data security, 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.

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.

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Weighted SWOT Analysis of Cre8 Direct Ningbo Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Cre8 Direct Ningbo 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 Cre8 Direct Ningbo 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 Cre8 Direct Ningbo 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 Cre8 Direct Ningbo 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 Cre8 Direct Ningbo needs to make to build a sustainable competitive advantage.

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