New World Department Store China (825) SWOT Analysis / TOWS Matrix / MBA Resources
Retail (Department & Discount)
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for New World Department Store China (Hong Kong)
Based on various researches at Oak Spring University , New World Department Store China is operating in a macro-environment that has been destablized by – supply chains are disrupted by pandemic , increasing energy prices, central banks are concerned over increasing inflation, technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels,
increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of New World Department Store China
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that New World Department Store China can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the New World Department Store China, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which New World Department Store China 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 New World Department Store China can be done for the following purposes –
1. Strategic planning of New World Department Store China
2. Improving business portfolio management of New World Department Store China
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Retail (Department & Discount) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of New World Department Store China
Strengths of New World Department Store China | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of New World Department Store China are -
Cross disciplinary teams
– Horizontal connected teams at the New World Department Store China 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 New World Department Store China in Retail (Department & Discount) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Retail (Department & Discount)
– New World Department Store China is one of the leading players in the Retail (Department & Discount) industry in Hong Kong. Over the years it has not only transformed the business landscape in the Retail (Department & Discount) industry in Hong Kong but also across the existing markets. The ability to lead change has enabled New World Department Store China in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Retail (Department & Discount) industry
– New World Department Store China has clearly differentiated products in the market place. This has enabled New World Department Store China to fetch slight price premium compare to the competitors in the Retail (Department & Discount) industry. The sustainable margins have also helped New World Department Store China to invest into research and development (R&D) and innovation.
Learning organization
- New World Department Store China 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 New World Department Store China is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at New World Department Store China emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– New World Department Store China has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Retail (Department & Discount) industry. Secondly the value chain collaborators of New World Department Store China have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of New World Department Store China
– The covid-19 pandemic has put organizational resilience at the centre of everthing New World Department Store China does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– New World Department Store China has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – New World Department Store China staying ahead in the Retail (Department & Discount) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– New World Department Store China is one of the most innovative firm in Retail (Department & Discount) sector.
Diverse revenue streams
– New World Department Store China is present in almost all the verticals within the Retail (Department & Discount) industry. This has provided New World Department Store China 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.
High brand equity
– New World Department Store China has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled New World Department Store China to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy of New World Department Store China comprises – understanding the underlying the factors in the Retail (Department & Discount) 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.
Weaknesses of New World Department Store China | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of New World Department Store China are -
Interest costs
– Compare to the competition, New World Department Store China 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.
Aligning sales with marketing
– From the outside it seems that New World Department Store China needs to have more collaboration between its sales team and marketing team. Sales professionals in the Retail (Department & Discount) industry have deep experience in developing customer relationships. Marketing department at New World Department Store China can leverage the sales team experience to cultivate customer relationships as New World Department Store China is planning to shift buying processes online.
Products dominated business model
– Even though New World Department Store China has some of the most successful models in the Retail (Department & Discount) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. New World Department Store China should strive to include more intangible value offerings along with its core products and services.
Skills based hiring in Retail (Department & Discount) industry
– The stress on hiring functional specialists at New World Department Store China 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.
Low market penetration in new markets
– Outside its home market of Hong Kong, New World Department Store China needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, New World Department Store China is slow explore the new channels of communication. These new channels of communication can help New World Department Store China to provide better information regarding Retail (Department & Discount) products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative at New World Department Store China, in the dynamic environment of Retail (Department & Discount) industry it has struggled to respond to the nimble upstart competition. New World Department Store China has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of New World Department Store China products
– To increase the profitability and margins on the products, New World Department Store China needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on New World Department Store China ‘s star products
– The top 2 products and services of New World Department Store China still accounts for major business revenue. This dependence on star products in Retail (Department & Discount) industry has resulted into insufficient focus on developing new products, even though New World Department Store China has relatively successful track record of launching new products.
High bargaining power of channel partners in Retail (Department & Discount) industry
– because of the regulatory requirements in Hong Kong, New World Department Store China 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 Retail (Department & Discount) industry.
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 New World Department Store China supply chain. Even after few cautionary changes, New World Department Store China is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left New World Department Store China vulnerable to further global disruptions in South East Asia.
New World Department Store China Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of New World Department Store China are -
Learning at scale
– Online learning technologies has now opened space for New World Department Store China 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.
Creating value in data economy
– The success of analytics program of New World Department Store China has opened avenues for new revenue streams for the organization in Retail (Department & Discount) industry. This can help New World Department Store China to build a more holistic ecosystem for New World Department Store China products in the Retail (Department & Discount) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at New World Department Store China 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 Retail (Department & Discount) industry.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, New World Department Store China 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 New World Department Store China to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Use of Bitcoin and other crypto currencies for transactions in Retail (Department & Discount) industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for New World Department Store China in the Retail (Department & Discount) industry. Now New World Department Store China 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 New World Department Store China to increase its market reach. New World Department Store China 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, New World Department Store China 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects New World Department Store China can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, New World Department Store China can use these opportunities to build new business models that can help the communities that New World Department Store China operates in. Secondly it can use opportunities from government spending in Retail (Department & Discount) sector.
Loyalty marketing
– New World Department Store China 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for New World Department Store China 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 New World Department Store China to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– New World Department Store China can develop new processes and procedures in Retail (Department & Discount) 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for New World Department Store China 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 (Department & Discount) industry, and it will provide faster access to the consumers.
Threats New World Department Store China External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of New World Department Store China 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 New World Department Store China business can come under increasing regulations regarding data privacy, data security, etc.
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 New World Department Store China in the Retail (Department & Discount) sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in Retail (Department & Discount) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. New World Department Store China can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for New World Department Store China in Retail (Department & Discount) industry. The Retail (Department & Discount) 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.
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.
Stagnating economy with rate increase
– New World Department Store China 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 (Department & Discount) industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Retail (Department & Discount) industry are lowering. It can presents New World Department Store China with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Retail (Department & Discount) sector.
High dependence on third party suppliers
– New World Department Store China 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.
Consumer confidence and its impact on New World Department Store China 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 (Department & Discount) industry and other sectors.
Regulatory challenges
– New World Department Store China 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 (Department & Discount) industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, New World Department Store China 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 (Department & Discount) sector.
Increasing wage structure of New World Department Store China
– 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 New World Department Store China.
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. New World Department Store China needs to understand the core reasons impacting the Retail (Department & Discount) industry. This will help it in building a better workplace.
Weighted SWOT Analysis of New World Department Store China Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at New World Department Store China 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 New World Department Store China 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 New World Department Store China 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 New World Department Store China 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 New World Department Store China needs to make to build a sustainable competitive advantage.