SWOT Analysis / TOWS Matrix for Yangtzekiang Garment (Hong Kong)
Based on various researches at Oak Spring University , Yangtzekiang Garment is operating in a macro-environment that has been destablized by – increasing commodity prices, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, wage bills are increasing, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, increasing energy prices,
increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Yangtzekiang Garment
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Yangtzekiang Garment can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Yangtzekiang Garment, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Yangtzekiang Garment 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 Yangtzekiang Garment can be done for the following purposes –
1. Strategic planning of Yangtzekiang Garment
2. Improving business portfolio management of Yangtzekiang Garment
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Apparel/Accessories sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Yangtzekiang Garment
Strengths of Yangtzekiang Garment | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Yangtzekiang Garment are -
High brand equity
– Yangtzekiang Garment has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Yangtzekiang Garment to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy of Yangtzekiang Garment comprises – understanding the underlying the factors in the Apparel/Accessories 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.
Digital Transformation in Apparel/Accessories industry
- digital transformation varies from industry to industry. For Yangtzekiang Garment digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Yangtzekiang Garment 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.
High switching costs
– The high switching costs that Yangtzekiang Garment 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.
Learning organization
- Yangtzekiang Garment 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 Yangtzekiang Garment is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Yangtzekiang Garment emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Yangtzekiang Garment is one of the most innovative firm in Apparel/Accessories sector.
Training and development
– Yangtzekiang Garment 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.
Sustainable margins compare to other players in Apparel/Accessories industry
– Yangtzekiang Garment has clearly differentiated products in the market place. This has enabled Yangtzekiang Garment to fetch slight price premium compare to the competitors in the Apparel/Accessories industry. The sustainable margins have also helped Yangtzekiang Garment to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Yangtzekiang Garment 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.
Highly skilled collaborators
– Yangtzekiang Garment has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Apparel/Accessories industry. Secondly the value chain collaborators of Yangtzekiang Garment have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Yangtzekiang Garment has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Yangtzekiang Garment 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.
Diverse revenue streams
– Yangtzekiang Garment is present in almost all the verticals within the Apparel/Accessories industry. This has provided Yangtzekiang Garment 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.
Weaknesses of Yangtzekiang Garment | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Yangtzekiang Garment are -
Increasing silos among functional specialists
– The organizational structure of Yangtzekiang Garment is dominated by functional specialists. It is not different from other players in the Apparel/Accessories industry, but Yangtzekiang Garment needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Yangtzekiang Garment to focus more on services in the Apparel/Accessories industry rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee of Yangtzekiang Garment is just above the Apparel/Accessories 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.
Capital Spending Reduction
– Even during the low interest decade, Yangtzekiang Garment 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 Apparel/Accessories industry using digital technology.
Skills based hiring in Apparel/Accessories industry
– The stress on hiring functional specialists at Yangtzekiang Garment 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.
High bargaining power of channel partners in Apparel/Accessories industry
– because of the regulatory requirements in Hong Kong, Yangtzekiang Garment 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 Apparel/Accessories industry.
Employees’ less understanding of Yangtzekiang Garment strategy
– From the outside it seems that the employees of Yangtzekiang Garment don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
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 Yangtzekiang Garment supply chain. Even after few cautionary changes, Yangtzekiang Garment is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Yangtzekiang Garment vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Yangtzekiang Garment products
– To increase the profitability and margins on the products, Yangtzekiang Garment needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Yangtzekiang Garment has some of the most successful models in the Apparel/Accessories industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Yangtzekiang Garment should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Yangtzekiang Garment has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Apparel/Accessories industry over the last five years. Yangtzekiang Garment even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Slow to strategic competitive environment developments
– As Yangtzekiang Garment is one of the leading players in the Apparel/Accessories industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Apparel/Accessories industry in last five years.
Yangtzekiang Garment Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Yangtzekiang Garment are -
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Yangtzekiang Garment can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Yangtzekiang Garment can use these opportunities to build new business models that can help the communities that Yangtzekiang Garment operates in. Secondly it can use opportunities from government spending in Apparel/Accessories sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Apparel/Accessories industry, but it has also influenced the consumer preferences. Yangtzekiang Garment can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Yangtzekiang Garment can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Apparel/Accessories industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Yangtzekiang Garment 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. Yangtzekiang Garment 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Yangtzekiang Garment 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 Yangtzekiang Garment to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Yangtzekiang Garment can develop new processes and procedures in Apparel/Accessories 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
– Yangtzekiang Garment can use the latest technology developments to improve its manufacturing and designing process in Apparel/Accessories 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.
Better consumer reach
– The expansion of the 5G network will help Yangtzekiang Garment to increase its market reach. Yangtzekiang Garment 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Yangtzekiang Garment 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 Yangtzekiang Garment to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Yangtzekiang Garment 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.
Use of Bitcoin and other crypto currencies for transactions in Apparel/Accessories industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Yangtzekiang Garment in the Apparel/Accessories industry. Now Yangtzekiang Garment can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Yangtzekiang Garment can improve the customer journey of consumers in the Apparel/Accessories 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.
Threats Yangtzekiang Garment External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Yangtzekiang Garment are -
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 Yangtzekiang Garment.
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. Yangtzekiang Garment needs to understand the core reasons impacting the Apparel/Accessories industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Yangtzekiang Garment is facing in Apparel/Accessories sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Yangtzekiang Garment in Apparel/Accessories industry. The Apparel/Accessories 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.
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 Yangtzekiang Garment business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Yangtzekiang Garment 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 Apparel/Accessories industry regulations.
Consumer confidence and its impact on Yangtzekiang Garment 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 Apparel/Accessories industry and other sectors.
Technology acceleration in Forth Industrial Revolution
– Yangtzekiang Garment has witnessed rapid integration of technology during Covid-19 in the Apparel/Accessories industry. As one of the leading players in the industry, Yangtzekiang Garment needs to keep up with the evolution of technology in the Apparel/Accessories 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
– Yangtzekiang Garment 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. Yangtzekiang Garment can take advantage of this fund but it will also bring new competitors in the Apparel/Accessories industry.
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.
High dependence on third party suppliers
– Yangtzekiang Garment 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Yangtzekiang Garment may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Apparel/Accessories sector.
Easy access to finance
– Easy access to finance in Apparel/Accessories industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Yangtzekiang Garment can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Yangtzekiang Garment Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Yangtzekiang Garment 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 Yangtzekiang Garment 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 Yangtzekiang Garment 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 Yangtzekiang Garment 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 Yangtzekiang Garment needs to make to build a sustainable competitive advantage.