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 – talent flight as more people leaving formal jobs, increasing energy prices, cloud computing is disrupting traditional business models, technology disruption, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, 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 -

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.

Low bargaining power of suppliers

– Suppliers of Cre8 Direct Ningbo in the Consumer/Non-Cyclical sector have low bargaining power. Cre8 Direct Ningbo has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cre8 Direct Ningbo to manage not only supply disruptions but also source products at highly competitive prices.

Successful track record of launching new products

– Cre8 Direct Ningbo has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cre8 Direct Ningbo 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.

Strong track record of project management in the Office Supplies industry

– Cre8 Direct Ningbo is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

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.

Innovation driven organization

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

High brand equity

– Cre8 Direct Ningbo has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cre8 Direct Ningbo to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Highly skilled collaborators

– Cre8 Direct Ningbo has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Office Supplies industry. Secondly the value chain collaborators of Cre8 Direct Ningbo have helped the firm to develop new products and bring them quickly to the marketplace.

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.

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.

Training and development

– Cre8 Direct Ningbo 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.

Diverse revenue streams

– Cre8 Direct Ningbo is present in almost all the verticals within the Office Supplies industry. This has provided Cre8 Direct Ningbo 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.

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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 -

Lack of clear differentiation of Cre8 Direct Ningbo products

– To increase the profitability and margins on the products, Cre8 Direct Ningbo needs to provide more differentiated products than what it is currently offering in the marketplace.

Workers concerns about automation

– As automation is fast increasing in the Office Supplies industry, Cre8 Direct Ningbo 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.

Aligning sales with marketing

– From the outside it seems that Cre8 Direct Ningbo needs to have more collaboration between its sales team and marketing team. Sales professionals in the Office Supplies industry have deep experience in developing customer relationships. Marketing department at Cre8 Direct Ningbo can leverage the sales team experience to cultivate customer relationships as Cre8 Direct Ningbo is planning to shift buying processes online.

High dependence on Cre8 Direct Ningbo ‘s star products

– The top 2 products and services of Cre8 Direct Ningbo still accounts for major business revenue. This dependence on star products in Office Supplies industry has resulted into insufficient focus on developing new products, even though Cre8 Direct Ningbo has relatively successful track record of launching new products.

High operating costs

– Compare to the competitors, Cre8 Direct Ningbo has high operating costs in the Office Supplies industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Cre8 Direct Ningbo lucrative customers.

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.

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 to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cre8 Direct Ningbo is slow explore the new channels of communication. These new channels of communication can help Cre8 Direct Ningbo to provide better information regarding Office Supplies products and services. It can also build an online community to further reach out to potential customers.

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.

Need for greater diversity

– Cre8 Direct Ningbo 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.

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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 -

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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Cre8 Direct Ningbo to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Cre8 Direct Ningbo to hire the very best people irrespective of their geographical location.

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 Cre8 Direct Ningbo 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.

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.

Manufacturing automation

– Cre8 Direct Ningbo can use the latest technology developments to improve its manufacturing and designing process in Office Supplies 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.

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.

Learning at scale

– Online learning technologies has now opened space for Cre8 Direct Ningbo 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.

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.

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.

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.

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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Cre8 Direct Ningbo 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 Cre8 Direct Ningbo to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

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.

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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 -

High dependence on third party suppliers

– Cre8 Direct Ningbo 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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Cre8 Direct Ningbo may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of 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.

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 Cre8 Direct Ningbo.

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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Cre8 Direct Ningbo in Office Supplies industry. The Office Supplies 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.

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. Cre8 Direct Ningbo 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.

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 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.

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.

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 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.

Environmental challenges

– Cre8 Direct Ningbo 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. Cre8 Direct Ningbo can take advantage of this fund but it will also bring new competitors in the Office Supplies industry.

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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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