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 – there is backlash against globalization, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, geopolitical disruptions,
increasing commodity prices, increasing energy prices, 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 -
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.
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.
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.
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.
Sustainable margins compare to other players in Beverages (Alcoholic) industry
– FuJian YanJing HuiQuan has clearly differentiated products in the market place. This has enabled FuJian YanJing HuiQuan to fetch slight price premium compare to the competitors in the Beverages (Alcoholic) industry. The sustainable margins have also helped FuJian YanJing HuiQuan to invest into research and development (R&D) and innovation.
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.
Strong track record of project management in the Beverages (Alcoholic) industry
– FuJian YanJing HuiQuan 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)
– FuJian YanJing HuiQuan has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – FuJian YanJing HuiQuan staying ahead in the Beverages (Alcoholic) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– FuJian YanJing HuiQuan 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.
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.
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 switching costs
– The high switching costs that FuJian YanJing HuiQuan 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.
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 -
Compensation and incentives
– The revenue per employee of FuJian YanJing HuiQuan is just above the Beverages (Alcoholic) 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.
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 FuJian YanJing HuiQuan supply chain. Even after few cautionary changes, FuJian YanJing HuiQuan is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left FuJian YanJing HuiQuan vulnerable to further global disruptions in South East Asia.
Skills based hiring in Beverages (Alcoholic) industry
– The stress on hiring functional specialists at FuJian YanJing HuiQuan 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.
High dependence on FuJian YanJing HuiQuan ‘s star products
– The top 2 products and services of FuJian YanJing HuiQuan still accounts for major business revenue. This dependence on star products in Beverages (Alcoholic) industry has resulted into insufficient focus on developing new products, even though FuJian YanJing HuiQuan has relatively successful track record of launching new products.
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.
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.
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.
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.
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.
Aligning sales with marketing
– From the outside it seems that FuJian YanJing HuiQuan needs to have more collaboration between its sales team and marketing team. Sales professionals in the Beverages (Alcoholic) industry have deep experience in developing customer relationships. Marketing department at FuJian YanJing HuiQuan can leverage the sales team experience to cultivate customer relationships as FuJian YanJing HuiQuan is planning to shift buying processes online.
High bargaining power of channel partners in Beverages (Alcoholic) industry
– because of the regulatory requirements in China, FuJian YanJing HuiQuan is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Beverages (Alcoholic) industry.
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 -
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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects FuJian YanJing HuiQuan can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Beverages (Alcoholic) industry, but it has also influenced the consumer preferences. FuJian YanJing HuiQuan can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, FuJian YanJing HuiQuan is facing challenges because of the dominance of functional experts in the organization. FuJian YanJing HuiQuan can utilize new technology in the field of Beverages (Alcoholic) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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.
Better consumer reach
– The expansion of the 5G network will help FuJian YanJing HuiQuan to increase its market reach. FuJian YanJing HuiQuan 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.
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.
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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, FuJian YanJing HuiQuan 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 FuJian YanJing HuiQuan to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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 -
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 FuJian YanJing HuiQuan business can come under increasing regulations regarding data privacy, data security, etc.
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 FuJian YanJing HuiQuan.
Consumer confidence and its impact on FuJian YanJing HuiQuan demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in Beverages (Alcoholic) industry and other sectors.
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 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.
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.
Technology acceleration in Forth Industrial Revolution
– FuJian YanJing HuiQuan has witnessed rapid integration of technology during Covid-19 in the Beverages (Alcoholic) industry. As one of the leading players in the industry, FuJian YanJing HuiQuan needs to keep up with the evolution of technology in the Beverages (Alcoholic) 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.
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.
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.
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.
Environmental challenges
– FuJian YanJing HuiQuan 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. FuJian YanJing HuiQuan can take advantage of this fund but it will also bring new competitors in the Beverages (Alcoholic) industry.
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.
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.
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.
