New Silkroad Cultura (472) SWOT Analysis / TOWS Matrix / MBA Resources
Beverages (Alcoholic)
Strategy / 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 – cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, increasing transportation and logistics costs, there is increasing trade war between United States & China,
digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, 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 -
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.
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.
Ability to lead change in Beverages (Alcoholic)
– New Silkroad Cultura is one of the leading players in the Beverages (Alcoholic) industry in Hong Kong. Over the years it has not only transformed the business landscape in the Beverages (Alcoholic) industry in Hong Kong but also across the existing markets. The ability to lead change has enabled New Silkroad Cultura in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– New Silkroad Cultura is one of the leading players in the Beverages (Alcoholic) 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.
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.
High switching costs
– The high switching costs that New Silkroad Cultura 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.
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.
Highly skilled collaborators
– New Silkroad Cultura has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Beverages (Alcoholic) industry. Secondly the value chain collaborators of New Silkroad Cultura have helped the firm to develop new products and bring them quickly to the marketplace.
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.
Training and development
– New Silkroad Cultura has one of the best training and development program in Consumer/Non-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.
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.
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.
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 -
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.
Aligning sales with marketing
– From the outside it seems that New Silkroad Cultura needs to have more collaboration between its sales team and marketing team. Sales professionals in the Beverages (Alcoholic) industry have deep experience in developing customer relationships. Marketing department at New Silkroad Cultura can leverage the sales team experience to cultivate customer relationships as New Silkroad Cultura is planning to shift buying processes online.
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.
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.
Capital Spending Reduction
– Even during the low interest decade, New Silkroad Cultura 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 Beverages (Alcoholic) industry using digital technology.
High bargaining power of channel partners in Beverages (Alcoholic) industry
– because of the regulatory requirements in Hong Kong, New Silkroad Cultura 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 Beverages (Alcoholic) industry.
Workers concerns about automation
– As automation is fast increasing in the Beverages (Alcoholic) industry, New Silkroad Cultura needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Products dominated business model
– Even though New Silkroad Cultura has some of the most successful models in the Beverages (Alcoholic) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. New Silkroad Cultura should strive to include more intangible value offerings along with its core products and services.
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.
High operating costs
– Compare to the competitors, New Silkroad Cultura has high operating costs in the Beverages (Alcoholic) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract New Silkroad Cultura lucrative customers.
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 -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, New Silkroad Cultura 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 Silkroad Cultura to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
Developing new processes and practices
– New Silkroad Cultura can develop new processes and procedures in Beverages (Alcoholic) 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.
Manufacturing automation
– New Silkroad Cultura can use the latest technology developments to improve its manufacturing and designing process in Beverages (Alcoholic) sector. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
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 New Silkroad Cultura 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.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for New Silkroad Cultura in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Beverages (Alcoholic) industry, and it will provide faster access to the consumers.
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.
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 Silkroad Cultura can use these opportunities to build new business models that can help the communities that New Silkroad Cultura operates in. Secondly it can use opportunities from government spending in Beverages (Alcoholic) sector.
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.
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.
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.
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 -
High dependence on third party suppliers
– New Silkroad Cultura 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.
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.
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.
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.
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 Silkroad Cultura needs to understand the core reasons impacting the Beverages (Alcoholic) industry. This will help it in building a better workplace.
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.
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.
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.
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.
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.
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.
Regulatory challenges
– New Silkroad Cultura 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 Beverages (Alcoholic) industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, New Silkroad Cultura 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 New Silkroad Cultura prominent markets.
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.