Anhui Andeli Department Store (603031) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Anhui Andeli Department Store (China)

Based on various researches at Oak Spring University , Anhui Andeli Department Store is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, increasing commodity prices, supply chains are disrupted by pandemic , increasing household debt because of falling income levels, geopolitical disruptions, increasing government debt because of Covid-19 spendings, increasing energy prices, etc

---

---

---

---

Introduction to SWOT Analysis of Anhui Andeli Department Store

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

---

Strengths of Anhui Andeli Department Store | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Anhui Andeli Department Store are -

Low bargaining power of suppliers

– Suppliers of Anhui Andeli Department Store in the Services sector have low bargaining power. Anhui Andeli Department Store has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Anhui Andeli Department Store to manage not only supply disruptions but also source products at highly competitive prices.

Highly skilled collaborators

– Anhui Andeli Department Store has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Retail (Grocery) industry. Secondly the value chain collaborators of Anhui Andeli Department Store have helped the firm to develop new products and bring them quickly to the marketplace.

Ability to lead change in Retail (Grocery)

– Anhui Andeli Department Store is one of the leading players in the Retail (Grocery) industry in China. Over the years it has not only transformed the business landscape in the Retail (Grocery) industry in China but also across the existing markets. The ability to lead change has enabled Anhui Andeli Department Store in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Learning organization

- Anhui Andeli Department Store 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 Anhui Andeli Department Store is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Anhui Andeli Department Store emphasize – knowledge, initiative, and innovation.

Operational resilience

– The operational resilience strategy of Anhui Andeli Department Store comprises – understanding the underlying the factors in the Retail (Grocery) industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.

Superior customer experience

– The customer experience strategy of Anhui Andeli Department Store in Retail (Grocery) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Sustainable margins compare to other players in Retail (Grocery) industry

– Anhui Andeli Department Store has clearly differentiated products in the market place. This has enabled Anhui Andeli Department Store to fetch slight price premium compare to the competitors in the Retail (Grocery) industry. The sustainable margins have also helped Anhui Andeli Department Store to invest into research and development (R&D) and innovation.

Digital Transformation in Retail (Grocery) industry

- digital transformation varies from industry to industry. For Anhui Andeli Department Store digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Anhui Andeli Department Store 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.

Organizational Resilience of Anhui Andeli Department Store

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

Diverse revenue streams

– Anhui Andeli Department Store is present in almost all the verticals within the Retail (Grocery) industry. This has provided Anhui Andeli Department Store 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.

Strong track record of project management in the Retail (Grocery) industry

– Anhui Andeli Department Store is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Innovation driven organization

– Anhui Andeli Department Store is one of the most innovative firm in Retail (Grocery) sector.

---

---

Weaknesses of Anhui Andeli Department Store | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Anhui Andeli Department Store are -

Need for greater diversity

– Anhui Andeli Department Store 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.

Low market penetration in new markets

– Outside its home market of China, Anhui Andeli Department Store needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Aligning sales with marketing

– From the outside it seems that Anhui Andeli Department Store needs to have more collaboration between its sales team and marketing team. Sales professionals in the Retail (Grocery) industry have deep experience in developing customer relationships. Marketing department at Anhui Andeli Department Store can leverage the sales team experience to cultivate customer relationships as Anhui Andeli Department Store is planning to shift buying processes online.

High cash cycle compare to competitors

Anhui Andeli Department Store has a high cash cycle compare to other players in the Retail (Grocery) industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Slow decision making process

– As mentioned earlier in the report, Anhui Andeli Department Store has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Retail (Grocery) industry over the last five years. Anhui Andeli Department Store 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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Anhui Andeli Department Store is slow explore the new channels of communication. These new channels of communication can help Anhui Andeli Department Store to provide better information regarding Retail (Grocery) products and services. It can also build an online community to further reach out to potential customers.

Capital Spending Reduction

– Even during the low interest decade, Anhui Andeli Department Store 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 (Grocery) industry using digital technology.

Employees’ less understanding of Anhui Andeli Department Store strategy

– From the outside it seems that the employees of Anhui Andeli Department Store 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 Anhui Andeli Department Store has some of the most successful models in the Retail (Grocery) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Anhui Andeli Department Store should strive to include more intangible value offerings along with its core products and services.

High dependence on Anhui Andeli Department Store ‘s star products

– The top 2 products and services of Anhui Andeli Department Store still accounts for major business revenue. This dependence on star products in Retail (Grocery) industry has resulted into insufficient focus on developing new products, even though Anhui Andeli Department Store has relatively successful track record of launching new products.

Increasing silos among functional specialists

– The organizational structure of Anhui Andeli Department Store is dominated by functional specialists. It is not different from other players in the Retail (Grocery) industry, but Anhui Andeli Department Store needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Anhui Andeli Department Store to focus more on services in the Retail (Grocery) industry rather than just following the product oriented approach.

---

Anhui Andeli Department Store Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Anhui Andeli Department Store are -

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 Anhui Andeli Department Store 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Anhui Andeli Department Store in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Retail (Grocery) industry, and it will provide faster access to the consumers.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Anhui Andeli Department Store is facing challenges because of the dominance of functional experts in the organization. Anhui Andeli Department Store can utilize new technology in the field of Retail (Grocery) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Retail (Grocery) industry, but it has also influenced the consumer preferences. Anhui Andeli Department Store can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Reforming the budgeting process

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

Loyalty marketing

– Anhui Andeli Department Store 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.

Learning at scale

– Online learning technologies has now opened space for Anhui Andeli Department Store 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.

Identify volunteer opportunities

– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Anhui Andeli Department Store can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Use of Bitcoin and other crypto currencies for transactions in Retail (Grocery) industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Anhui Andeli Department Store in the Retail (Grocery) industry. Now Anhui Andeli Department Store can target international markets with far fewer capital restrictions requirements than the existing system.

Developing new processes and practices

– Anhui Andeli Department Store can develop new processes and procedures in Retail (Grocery) 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.

Better consumer reach

– The expansion of the 5G network will help Anhui Andeli Department Store to increase its market reach. Anhui Andeli Department Store 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.

Leveraging digital technologies

– Anhui Andeli Department Store 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.

Harnessing reconfiguration of the global supply chains

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

---

Threats Anhui Andeli Department Store External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Anhui Andeli Department Store are -

Technology acceleration in Forth Industrial Revolution

– Anhui Andeli Department Store has witnessed rapid integration of technology during Covid-19 in the Retail (Grocery) industry. As one of the leading players in the industry, Anhui Andeli Department Store needs to keep up with the evolution of technology in the Retail (Grocery) 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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Anhui Andeli Department Store in Retail (Grocery) industry. The Retail (Grocery) 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.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Anhui Andeli Department Store 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 Anhui Andeli Department Store prominent markets.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Retail (Grocery) industry are lowering. It can presents Anhui Andeli Department Store with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Retail (Grocery) sector.

Environmental challenges

– Anhui Andeli Department Store 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. Anhui Andeli Department Store can take advantage of this fund but it will also bring new competitors in the Retail (Grocery) industry.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Anhui Andeli Department Store may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Retail (Grocery) 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 Anhui Andeli Department Store in the Retail (Grocery) sector and impact the bottomline of the organization.

Stagnating economy with rate increase

– Anhui Andeli Department Store 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 (Grocery) industry.

Consumer confidence and its impact on Anhui Andeli Department Store 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 (Grocery) industry and other sectors.

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 Anhui Andeli Department Store.

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.

Easy access to finance

– Easy access to finance in Retail (Grocery) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Anhui Andeli Department Store can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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 Anhui Andeli Department Store business can come under increasing regulations regarding data privacy, data security, etc.

---

Weighted SWOT Analysis of Anhui Andeli Department Store Template, Example

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

--- ---