South China (413) SWOT Analysis / TOWS Matrix / MBA Resources
Footwear
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for South China (Hong Kong)
Based on various researches at Oak Spring University , South China is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, geopolitical disruptions, increasing commodity prices, there is backlash against globalization, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies,
supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that South China can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the South China, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which South 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 South China can be done for the following purposes –
1. Strategic planning of South China
2. Improving business portfolio management of South China
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Footwear sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of South China
Strengths of South China | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of South China are -
Operational resilience
– The operational resilience strategy of South China comprises – understanding the underlying the factors in the Footwear 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.
Effective Research and Development (R&D)
– South China has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – South China staying ahead in the Footwear industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- South 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 South China is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at South China emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– South China is present in almost all the verticals within the Footwear industry. This has provided South 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.
Sustainable margins compare to other players in Footwear industry
– South China has clearly differentiated products in the market place. This has enabled South China to fetch slight price premium compare to the competitors in the Footwear industry. The sustainable margins have also helped South China to invest into research and development (R&D) and innovation.
Digital Transformation in Footwear industry
- digital transformation varies from industry to industry. For South China digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. South China 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.
Training and development
– South China has one of the best training and development program in Consumer 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.
Ability to recruit top talent
– South China is one of the leading players in the Footwear industry in Hong Kong. It is in a position to attract the best talent available in Hong Kong. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– South China is one of the most innovative firm in Footwear sector.
Highly skilled collaborators
– South China has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Footwear industry. Secondly the value chain collaborators of South China have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– South China has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled South China to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that South China 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 South China | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of South China are -
Ability to respond to the competition
– As the decision making is very deliberative at South China, in the dynamic environment of Footwear industry it has struggled to respond to the nimble upstart competition. South China has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, South China is slow explore the new channels of communication. These new channels of communication can help South China to provide better information regarding Footwear products and services. It can also build an online community to further reach out to potential customers.
High dependence on South China ‘s star products
– The top 2 products and services of South China still accounts for major business revenue. This dependence on star products in Footwear industry has resulted into insufficient focus on developing new products, even though South China has relatively successful track record of launching new products.
Skills based hiring in Footwear industry
– The stress on hiring functional specialists at South 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.
Capital Spending Reduction
– Even during the low interest decade, South China 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 Footwear industry using digital technology.
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 South China supply chain. Even after few cautionary changes, South China is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left South China vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As South China is one of the leading players in the Footwear industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Footwear industry in last five years.
Increasing silos among functional specialists
– The organizational structure of South China is dominated by functional specialists. It is not different from other players in the Footwear industry, but South China needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help South China to focus more on services in the Footwear industry rather than just following the product oriented approach.
High bargaining power of channel partners in Footwear industry
– because of the regulatory requirements in Hong Kong, South 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 Footwear industry.
Lack of clear differentiation of South China products
– To increase the profitability and margins on the products, South China needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Hong Kong, South China needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
South China Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of South China are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects South China can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, South 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 South 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 Footwear industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for South China in the Footwear industry. Now South China can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of South China has opened avenues for new revenue streams for the organization in Footwear industry. This can help South China to build a more holistic ecosystem for South China products in the Footwear industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, South 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for South 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 Footwear industry, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help South China to increase its market reach. South 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Footwear industry, but it has also influenced the consumer preferences. South China can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– South China 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.
Loyalty marketing
– South 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.
Learning at scale
– Online learning technologies has now opened space for South 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, South China can use these opportunities to build new business models that can help the communities that South China operates in. Secondly it can use opportunities from government spending in Footwear sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, South China is facing challenges because of the dominance of functional experts in the organization. South China can utilize new technology in the field of Footwear industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats South China External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of South China are -
Consumer confidence and its impact on South 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 Footwear industry and other sectors.
Shortening product life cycle
– it is one of the major threat that South China is facing in Footwear sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 South China 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 South China.
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 South China in the Footwear sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– South China has witnessed rapid integration of technology during Covid-19 in the Footwear industry. As one of the leading players in the industry, South China needs to keep up with the evolution of technology in the Footwear 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.
Easy access to finance
– Easy access to finance in Footwear industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. South China can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, South 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 Footwear sector.
High dependence on third party suppliers
– South 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, South China 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 South China prominent markets.
Increasing wage structure of South 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 South 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. South China needs to understand the core reasons impacting the Footwear industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– South 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 Footwear industry.
Weighted SWOT Analysis of South China Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at South 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 South 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 South 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 South 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 South China needs to make to build a sustainable competitive advantage.
