SWOT Analysis / TOWS Matrix for Beijing Sanfo Outdoor (China)
Based on various researches at Oak Spring University , Beijing Sanfo Outdoor is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, wage bills are increasing, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices,
talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Beijing Sanfo Outdoor
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Beijing Sanfo Outdoor can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Beijing Sanfo Outdoor, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Beijing Sanfo Outdoor 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 Beijing Sanfo Outdoor can be done for the following purposes –
1. Strategic planning of Beijing Sanfo Outdoor
2. Improving business portfolio management of Beijing Sanfo Outdoor
3. Assessing feasibility of the new initiative in China
4. Making a Retail (Specialty) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Beijing Sanfo Outdoor
Strengths of Beijing Sanfo Outdoor | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Beijing Sanfo Outdoor are -
Digital Transformation in Retail (Specialty) industry
- digital transformation varies from industry to industry. For Beijing Sanfo Outdoor digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Beijing Sanfo Outdoor 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 recruit top talent
– Beijing Sanfo Outdoor is one of the leading players in the Retail (Specialty) 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
– Beijing Sanfo Outdoor is present in almost all the verticals within the Retail (Specialty) industry. This has provided Beijing Sanfo Outdoor 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.
Learning organization
- Beijing Sanfo Outdoor 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 Beijing Sanfo Outdoor is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Beijing Sanfo Outdoor emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Beijing Sanfo Outdoor in Retail (Specialty) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Beijing Sanfo Outdoor
– The covid-19 pandemic has put organizational resilience at the centre of everthing Beijing Sanfo Outdoor does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Beijing Sanfo Outdoor 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.
Effective Research and Development (R&D)
– Beijing Sanfo Outdoor has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Beijing Sanfo Outdoor staying ahead in the Retail (Specialty) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Retail (Specialty)
– Beijing Sanfo Outdoor is one of the leading players in the Retail (Specialty) industry in China. Over the years it has not only transformed the business landscape in the Retail (Specialty) industry in China but also across the existing markets. The ability to lead change has enabled Beijing Sanfo Outdoor in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Beijing Sanfo Outdoor 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 Retail (Specialty) 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.
Successful track record of launching new products
– Beijing Sanfo Outdoor has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Beijing Sanfo Outdoor 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.
Innovation driven organization
– Beijing Sanfo Outdoor is one of the most innovative firm in Retail (Specialty) sector.
Weaknesses of Beijing Sanfo Outdoor | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Beijing Sanfo Outdoor are -
Employees’ less understanding of Beijing Sanfo Outdoor strategy
– From the outside it seems that the employees of Beijing Sanfo Outdoor 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.
Products dominated business model
– Even though Beijing Sanfo Outdoor has some of the most successful models in the Retail (Specialty) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Beijing Sanfo Outdoor should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Beijing Sanfo Outdoor 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 Retail (Specialty) industry using digital technology.
Slow to strategic competitive environment developments
– As Beijing Sanfo Outdoor is one of the leading players in the Retail (Specialty) industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Retail (Specialty) industry in last five years.
Skills based hiring in Retail (Specialty) industry
– The stress on hiring functional specialists at Beijing Sanfo Outdoor 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.
Ability to respond to the competition
– As the decision making is very deliberative at Beijing Sanfo Outdoor, in the dynamic environment of Retail (Specialty) industry it has struggled to respond to the nimble upstart competition. Beijing Sanfo Outdoor has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Beijing Sanfo Outdoor has a high cash cycle compare to other players in the Retail (Specialty) industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Interest costs
– Compare to the competition, Beijing Sanfo Outdoor 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.
High dependence on Beijing Sanfo Outdoor ‘s star products
– The top 2 products and services of Beijing Sanfo Outdoor still accounts for major business revenue. This dependence on star products in Retail (Specialty) industry has resulted into insufficient focus on developing new products, even though Beijing Sanfo Outdoor has relatively successful track record of launching new products.
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 Beijing Sanfo Outdoor supply chain. Even after few cautionary changes, Beijing Sanfo Outdoor is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Beijing Sanfo Outdoor vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Beijing Sanfo Outdoor products
– To increase the profitability and margins on the products, Beijing Sanfo Outdoor needs to provide more differentiated products than what it is currently offering in the marketplace.
Beijing Sanfo Outdoor Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Beijing Sanfo Outdoor are -
Manufacturing automation
– Beijing Sanfo Outdoor can use the latest technology developments to improve its manufacturing and designing process in Retail (Specialty) 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.
Creating value in data economy
– The success of analytics program of Beijing Sanfo Outdoor has opened avenues for new revenue streams for the organization in Retail (Specialty) industry. This can help Beijing Sanfo Outdoor to build a more holistic ecosystem for Beijing Sanfo Outdoor products in the Retail (Specialty) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Beijing Sanfo Outdoor 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.
Use of Bitcoin and other crypto currencies for transactions in Retail (Specialty) industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Beijing Sanfo Outdoor in the Retail (Specialty) industry. Now Beijing Sanfo Outdoor can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Beijing Sanfo Outdoor to increase its market reach. Beijing Sanfo Outdoor 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.
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 Beijing Sanfo Outdoor 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.
Developing new processes and practices
– Beijing Sanfo Outdoor can develop new processes and procedures in Retail (Specialty) industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Retail (Specialty) industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Beijing Sanfo Outdoor 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. Beijing Sanfo Outdoor 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Beijing Sanfo Outdoor is facing challenges because of the dominance of functional experts in the organization. Beijing Sanfo Outdoor can utilize new technology in the field of Retail (Specialty) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Beijing Sanfo Outdoor can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Beijing Sanfo Outdoor has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Retail (Specialty) sector. This continuous investment in analytics has enabled Beijing Sanfo Outdoor to build a competitive advantage using analytics. The analytics driven competitive advantage can help Beijing Sanfo Outdoor 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 Retail (Specialty) industry, but it has also influenced the consumer preferences. Beijing Sanfo Outdoor can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Beijing Sanfo Outdoor can use these opportunities to build new business models that can help the communities that Beijing Sanfo Outdoor operates in. Secondly it can use opportunities from government spending in Retail (Specialty) sector.
Threats Beijing Sanfo Outdoor External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Beijing Sanfo Outdoor are -
Shortening product life cycle
– it is one of the major threat that Beijing Sanfo Outdoor is facing in Retail (Specialty) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Beijing Sanfo Outdoor 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 Retail (Specialty) industry and other sectors.
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.
Increasing wage structure of Beijing Sanfo Outdoor
– 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 Beijing Sanfo Outdoor.
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 Beijing Sanfo Outdoor in the Retail (Specialty) sector and impact the bottomline of the organization.
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. Beijing Sanfo Outdoor 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.
Regulatory challenges
– Beijing Sanfo Outdoor needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Retail (Specialty) industry regulations.
High dependence on third party suppliers
– Beijing Sanfo Outdoor 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.
Environmental challenges
– Beijing Sanfo Outdoor 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. Beijing Sanfo Outdoor can take advantage of this fund but it will also bring new competitors in the Retail (Specialty) industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Beijing Sanfo Outdoor 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 Beijing Sanfo Outdoor prominent markets.
Technology acceleration in Forth Industrial Revolution
– Beijing Sanfo Outdoor has witnessed rapid integration of technology during Covid-19 in the Retail (Specialty) industry. As one of the leading players in the industry, Beijing Sanfo Outdoor needs to keep up with the evolution of technology in the Retail (Specialty) 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.
Stagnating economy with rate increase
– Beijing Sanfo Outdoor can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the Retail (Specialty) industry.
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 Beijing Sanfo Outdoor business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Beijing Sanfo Outdoor Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Beijing Sanfo Outdoor 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 Beijing Sanfo Outdoor 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 Beijing Sanfo Outdoor 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 Beijing Sanfo Outdoor 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 Beijing Sanfo Outdoor needs to make to build a sustainable competitive advantage.