SWOT Analysis / TOWS Matrix for FuJian YanJing HuiQuan (China)
Based on various researches at Oak Spring University , FuJian YanJing HuiQuan is operating in a macro-environment that has been destablized by – wage bills are increasing, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, increasing commodity prices, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google,
increasing transportation and logistics costs, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of FuJian YanJing HuiQuan
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that FuJian YanJing HuiQuan can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the FuJian YanJing HuiQuan, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which FuJian YanJing HuiQuan 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 FuJian YanJing HuiQuan can be done for the following purposes –
1. Strategic planning of FuJian YanJing HuiQuan
2. Improving business portfolio management of FuJian YanJing HuiQuan
3. Assessing feasibility of the new initiative in China
4. Making a Beverages (Alcoholic) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of FuJian YanJing HuiQuan
Strengths of FuJian YanJing HuiQuan | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of FuJian YanJing HuiQuan are -
Analytics focus
– FuJian YanJing HuiQuan 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 Beverages (Alcoholic) 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
– FuJian YanJing HuiQuan is one of the leading players in the Beverages (Alcoholic) 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.
Diverse revenue streams
– FuJian YanJing HuiQuan is present in almost all the verticals within the Beverages (Alcoholic) industry. This has provided FuJian YanJing HuiQuan 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.
Cross disciplinary teams
– Horizontal connected teams at the FuJian YanJing HuiQuan 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 FuJian YanJing HuiQuan in Beverages (Alcoholic) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of FuJian YanJing HuiQuan in the Consumer/Non-Cyclical sector have low bargaining power. FuJian YanJing HuiQuan has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps FuJian YanJing HuiQuan to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of FuJian YanJing HuiQuan
– The covid-19 pandemic has put organizational resilience at the centre of everthing FuJian YanJing HuiQuan 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
– FuJian YanJing HuiQuan has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. FuJian YanJing HuiQuan 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.
High brand equity
– FuJian YanJing HuiQuan has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled FuJian YanJing HuiQuan to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Beverages (Alcoholic) industry
- digital transformation varies from industry to industry. For FuJian YanJing HuiQuan digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. FuJian YanJing HuiQuan 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 Beverages (Alcoholic)
– FuJian YanJing HuiQuan is one of the leading players in the Beverages (Alcoholic) industry in China. Over the years it has not only transformed the business landscape in the Beverages (Alcoholic) industry in China but also across the existing markets. The ability to lead change has enabled FuJian YanJing HuiQuan in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- FuJian YanJing HuiQuan 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 FuJian YanJing HuiQuan is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at FuJian YanJing HuiQuan emphasize – knowledge, initiative, and innovation.
Weaknesses of FuJian YanJing HuiQuan | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of FuJian YanJing HuiQuan are -
Interest costs
– Compare to the competition, FuJian YanJing HuiQuan 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.
Increasing silos among functional specialists
– The organizational structure of FuJian YanJing HuiQuan is dominated by functional specialists. It is not different from other players in the Beverages (Alcoholic) industry, but FuJian YanJing HuiQuan needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help FuJian YanJing HuiQuan to focus more on services in the Beverages (Alcoholic) industry rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, FuJian YanJing HuiQuan has high operating costs in the Beverages (Alcoholic) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract FuJian YanJing HuiQuan lucrative customers.
No frontier risks strategy
– From the 10K / annual statement of FuJian YanJing HuiQuan, it seems that company is thinking out the frontier risks that can impact Beverages (Alcoholic) 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.
Slow decision making process
– As mentioned earlier in the report, FuJian YanJing HuiQuan has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Beverages (Alcoholic) industry over the last five years. FuJian YanJing HuiQuan 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.
Ability to respond to the competition
– As the decision making is very deliberative at FuJian YanJing HuiQuan, in the dynamic environment of Beverages (Alcoholic) industry it has struggled to respond to the nimble upstart competition. FuJian YanJing HuiQuan has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, FuJian YanJing HuiQuan 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 (Alcoholic) industry using digital technology.
Products dominated business model
– Even though FuJian YanJing HuiQuan has some of the most successful models in the Beverages (Alcoholic) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. FuJian YanJing HuiQuan should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As FuJian YanJing HuiQuan is one of the leading players in the Beverages (Alcoholic) industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Beverages (Alcoholic) industry in last five years.
Workers concerns about automation
– As automation is fast increasing in the Beverages (Alcoholic) industry, FuJian YanJing HuiQuan 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.
Lack of clear differentiation of FuJian YanJing HuiQuan products
– To increase the profitability and margins on the products, FuJian YanJing HuiQuan needs to provide more differentiated products than what it is currently offering in the marketplace.
FuJian YanJing HuiQuan Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of FuJian YanJing HuiQuan are -
Buying journey improvements
– FuJian YanJing HuiQuan can improve the customer journey of consumers in the Beverages (Alcoholic) 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.
Building a culture of innovation
– managers at FuJian YanJing HuiQuan 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 Beverages (Alcoholic) 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, FuJian YanJing HuiQuan can use these opportunities to build new business models that can help the communities that FuJian YanJing HuiQuan operates in. Secondly it can use opportunities from government spending in Beverages (Alcoholic) 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 FuJian YanJing HuiQuan 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.
Manufacturing automation
– FuJian YanJing HuiQuan can use the latest technology developments to improve its manufacturing and designing process in Beverages (Alcoholic) 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Beverages (Alcoholic) industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. FuJian YanJing HuiQuan 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. FuJian YanJing HuiQuan 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.
Creating value in data economy
– The success of analytics program of FuJian YanJing HuiQuan has opened avenues for new revenue streams for the organization in Beverages (Alcoholic) industry. This can help FuJian YanJing HuiQuan to build a more holistic ecosystem for FuJian YanJing HuiQuan products in the Beverages (Alcoholic) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– FuJian YanJing HuiQuan 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for FuJian YanJing HuiQuan 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 (Alcoholic) industry, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, FuJian YanJing HuiQuan 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for FuJian YanJing HuiQuan 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 FuJian YanJing HuiQuan to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– FuJian YanJing HuiQuan has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Beverages (Alcoholic) sector. This continuous investment in analytics has enabled FuJian YanJing HuiQuan to build a competitive advantage using analytics. The analytics driven competitive advantage can help FuJian YanJing HuiQuan to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for FuJian YanJing HuiQuan 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.
Threats FuJian YanJing HuiQuan External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of FuJian YanJing HuiQuan are -
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 FuJian YanJing HuiQuan in the Beverages (Alcoholic) sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Beverages (Alcoholic) industry are lowering. It can presents FuJian YanJing HuiQuan with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Beverages (Alcoholic) sector.
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.
Shortening product life cycle
– it is one of the major threat that FuJian YanJing HuiQuan is facing in Beverages (Alcoholic) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– FuJian YanJing HuiQuan 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for FuJian YanJing HuiQuan in Beverages (Alcoholic) industry. The Beverages (Alcoholic) 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.
Stagnating economy with rate increase
– FuJian YanJing HuiQuan 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 (Alcoholic) industry.
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. FuJian YanJing HuiQuan 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 Beverages (Alcoholic) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. FuJian YanJing HuiQuan can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of FuJian YanJing HuiQuan
– 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 FuJian YanJing HuiQuan.
Regulatory challenges
– FuJian YanJing HuiQuan 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 (Alcoholic) industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, FuJian YanJing HuiQuan 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 FuJian YanJing HuiQuan prominent markets.
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. FuJian YanJing HuiQuan needs to understand the core reasons impacting the Beverages (Alcoholic) industry. This will help it in building a better workplace.
Weighted SWOT Analysis of FuJian YanJing HuiQuan Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at FuJian YanJing HuiQuan 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 FuJian YanJing HuiQuan 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 FuJian YanJing HuiQuan 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 FuJian YanJing HuiQuan 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 FuJian YanJing HuiQuan needs to make to build a sustainable competitive advantage.