New Silkroad Cultura (472) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for New Silkroad Cultura (Hong Kong)

Based on various researches at Oak Spring University , New Silkroad Cultura is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, technology disruption, cloud computing is disrupting traditional business models, increasing energy prices, increasing government debt because of Covid-19 spendings, wage bills are increasing, etc

---

---

---

---

Introduction to SWOT Analysis of New Silkroad Cultura

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

---

Strengths of New Silkroad Cultura | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of New Silkroad Cultura are -

Diverse revenue streams

– New Silkroad Cultura is present in almost all the verticals within the Beverages (Alcoholic) industry. This has provided New Silkroad Cultura 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.

Low bargaining power of suppliers

– Suppliers of New Silkroad Cultura in the Consumer/Non-Cyclical sector have low bargaining power. New Silkroad Cultura has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps New Silkroad Cultura to manage not only supply disruptions but also source products at highly competitive prices.

Analytics focus

– New Silkroad Cultura is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the Beverages (Alcoholic) industry. The technology infrastructure of Hong Kong 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.

Digital Transformation in Beverages (Alcoholic) industry

- digital transformation varies from industry to industry. For New Silkroad Cultura digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. New Silkroad Cultura 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 New Silkroad Cultura

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

Cross disciplinary teams

– Horizontal connected teams at the New Silkroad Cultura 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.

Successful track record of launching new products

– New Silkroad Cultura has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. New Silkroad Cultura 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.

Strong track record of project management in the Beverages (Alcoholic) industry

– New Silkroad Cultura is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

High brand equity

– New Silkroad Cultura has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled New Silkroad Cultura to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Sustainable margins compare to other players in Beverages (Alcoholic) industry

– New Silkroad Cultura has clearly differentiated products in the market place. This has enabled New Silkroad Cultura to fetch slight price premium compare to the competitors in the Beverages (Alcoholic) industry. The sustainable margins have also helped New Silkroad Cultura to invest into research and development (R&D) and innovation.

Learning organization

- New Silkroad Cultura 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 Silkroad Cultura is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at New Silkroad Cultura emphasize – knowledge, initiative, and innovation.

Effective Research and Development (R&D)

– New Silkroad Cultura has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – New Silkroad Cultura staying ahead in the Beverages (Alcoholic) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

---

---

Weaknesses of New Silkroad Cultura | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of New Silkroad Cultura are -

High cash cycle compare to competitors

New Silkroad Cultura has a high cash cycle compare to other players in the Beverages (Alcoholic) 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 to strategic competitive environment developments

– As New Silkroad Cultura is one of the leading players in the Beverages (Alcoholic) industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Beverages (Alcoholic) industry in last five years.

Increasing silos among functional specialists

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

Slow to harness new channels of communication

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

Lack of clear differentiation of New Silkroad Cultura products

– To increase the profitability and margins on the products, New Silkroad Cultura needs to provide more differentiated products than what it is currently offering in the marketplace.

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 Silkroad Cultura supply chain. Even after few cautionary changes, New Silkroad Cultura is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left New Silkroad Cultura vulnerable to further global disruptions in South East Asia.

Slow decision making process

– As mentioned earlier in the report, New Silkroad Cultura has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Beverages (Alcoholic) industry over the last five years. New Silkroad Cultura 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.

Compensation and incentives

– The revenue per employee of New Silkroad Cultura is just above the Beverages (Alcoholic) industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.

Ability to respond to the competition

– As the decision making is very deliberative at New Silkroad Cultura, in the dynamic environment of Beverages (Alcoholic) industry it has struggled to respond to the nimble upstart competition. New Silkroad Cultura has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Skills based hiring in Beverages (Alcoholic) industry

– The stress on hiring functional specialists at New Silkroad Cultura 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 Silkroad Cultura needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

---

New Silkroad Cultura Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of New Silkroad Cultura are -

Creating value in data economy

– The success of analytics program of New Silkroad Cultura has opened avenues for new revenue streams for the organization in Beverages (Alcoholic) industry. This can help New Silkroad Cultura to build a more holistic ecosystem for New Silkroad Cultura products in the Beverages (Alcoholic) industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Building a culture of innovation

– managers at New Silkroad Cultura 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 Beverages (Alcoholic) industry.

Better consumer reach

– The expansion of the 5G network will help New Silkroad Cultura to increase its market reach. New Silkroad Cultura 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.

Reforming the budgeting process

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

Finding new ways to collaborate

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

Low interest rates

– Even though inflation is raising its head in most developed economies, New Silkroad Cultura 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.

Leveraging digital technologies

– New Silkroad Cultura 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.

Learning at scale

– Online learning technologies has now opened space for New Silkroad Cultura 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.

Buying journey improvements

– New Silkroad Cultura can improve the customer journey of consumers in the Beverages (Alcoholic) industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.

Use of Bitcoin and other crypto currencies for transactions in Beverages (Alcoholic) industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for New Silkroad Cultura in the Beverages (Alcoholic) industry. Now New Silkroad Cultura can target international markets with far fewer capital restrictions requirements than the existing system.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for New Silkroad Cultura 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 Silkroad Cultura to hire the very best people irrespective of their geographical location.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Beverages (Alcoholic) industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. New Silkroad Cultura 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. New Silkroad Cultura 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.

Loyalty marketing

– New Silkroad Cultura has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.

---

Threats New Silkroad Cultura External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of New Silkroad Cultura are -

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for New Silkroad Cultura in Beverages (Alcoholic) industry. The Beverages (Alcoholic) 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.

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. New Silkroad Cultura 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.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Beverages (Alcoholic) industry are lowering. It can presents New Silkroad Cultura with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Beverages (Alcoholic) sector.

Shortening product life cycle

– it is one of the major threat that New Silkroad Cultura is facing in Beverages (Alcoholic) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Environmental challenges

– New Silkroad Cultura 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. New Silkroad Cultura can take advantage of this fund but it will also bring new competitors in the Beverages (Alcoholic) industry.

Easy access to finance

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

Consumer confidence and its impact on New Silkroad Cultura demand

– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in Beverages (Alcoholic) industry and other sectors.

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 Silkroad Cultura in the Beverages (Alcoholic) sector and impact the bottomline of the organization.

Technology acceleration in Forth Industrial Revolution

– New Silkroad Cultura has witnessed rapid integration of technology during Covid-19 in the Beverages (Alcoholic) industry. As one of the leading players in the industry, New Silkroad Cultura needs to keep up with the evolution of technology in the Beverages (Alcoholic) sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.

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 Silkroad Cultura 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 New Silkroad Cultura.

Increasing wage structure of New Silkroad Cultura

– 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 Silkroad Cultura.

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.

---

Weighted SWOT Analysis of New Silkroad Cultura Template, Example

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

--- ---