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A SWOT Analysis
CD-R King: A SWOT Analysis
by: Agir, Kimberly M. & Pingol, Katrina B.
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Recommended by: 281 people
CD-R King was on its peak for the past years, but its performance has gradually declined due to various reasons. CD-R King decides to hire business analysts to suggest what they can do to resolve the issue. What do you think will the business analysts suggest to CD-R King?
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A SWOT ANALYSIS
CASE 1. CD-R KING
CD-R King is a retail business that is known for selling affordable computer parts, gadgets, electronic appliances, and accessories.
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In 1997, CD-R King opened its first store in Quiapo, Manila. Nicholson Santos and Henry Ngo, according to records, created the corporation. When CD-Rs or recordable CDs were the primary means of data storage, the original CD-R King was a small store on Paterno Street.
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After the first location closed, CD-R King started to add areas around schools and universities, a strategic move to be closer to its target market of students and professors.
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The demand for newer technologies prompted CD-R King to expand its product line to include the latest technologies. Most of which were imported from China. The company began selling computer parts, smartphones, audio and video equipment, car accessories, LED lights, and home appliances after CD-Rs and CD-RWs (CD-Rewritable).
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CD-R King rapidly expanded in the early 2000s. During this time, the store's popularity soared. People who'd been eventually becoming aware of consumer tech products began to think of CD-R King as the go-to store for all of their electronics-related needs, according to anecdotal evidence. The dazzling establishments with the bright yellow sign bursting with consumers were typical.
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The business was doing well until the pandemic came or before the pandemic because of its outdated products. The available products of CD-R King cannot engage with the trends in technology today.
Over the last few years, there have been a large number of CD-R King store closings. According to a source from the leasing department of one of the country's largest shopping malls, CD-R King has fewer than 10 locations, down from a peak of 500. According to the source, the CD-R King there is still open, but numerous other locations in the same mall network were closed even before the coronavirus outbreak. The corporation has also changed ownership, according to the source.
SWOT ANALYSIS
Point of View:
Kimberly M. Agir - Business Analyst
Katrina B. Pingol - Business Analyst
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Time Context:
2020-2021 (During the pandemic)
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I. Statement of the Problem
How can CD-R King regain its popularity?
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II. Statement of the Objective
CD-R King can regain its popularity by keeping up with the new marketing strategies, having a competitive advantage, and by improving the quality of its products and services.
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SWOT ANALYSIS: AREAS OF CONSIDERATION
A. The Internal Environment
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CD-R King has undergone a change in ownership. The performance of the business has declined over the years. From around 500 branches before, CD-R King now has less than ten branches left in the Philippines. Currently, CD-R King has its online store in Lazada, but it is inactive.
Though the products offered are cheap and affordable, most consumers are disappointed and question the products’ quality and durability. CD-R King’s issue with its quality control of products led to a waning number of its consumers. Moreover, complaints are also received due to poor customer service, the employee-customer rapport, and their traditional way of selling their goods.
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B. The External Environment
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With the technological advancements and the rising needs in electronic products, different competitors or stores emerged and continued to thrive up until the present.
The COVID-19 pandemic has led to a surge in e-commerce across the country. As lockdowns became a new normal and more restrictions surfaced in the country, businesses and consumers shifted from physical stores to digital marketing or online shopping.
C. The Task Environment
INTERNAL FACTORS
EXTERNAL FACTORS
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Strengths
•Low-cost products
•Offers a wide range of products
•Its name is recognizable among Filipinos.
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Weaknesses
•Low-quality products
•Poor customer service
•Outdated marketing strategy
•Traditional way of service
•Inactive e-commerce
•Slow response to customers’ feedbacks and complaints
Opportunities
•A rise in the e-commerce industry: broaden and improve the business’ reach through e-commerce and advertising.
•Restrictions are gradually being lifted: open physical stores near schools, universities, or inside malls.
•High demand for electronic and digital products.
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Threats
•Increased competitors in the industry especially in the e-commerce industry
•Competitors provide high-quality and in-demand products to customers at a reasonable price.
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SWOT ANALYSIS: ASSUMPTION
Due to the customer complaints about CD-R King’s poor customer service and low-quality products, and based on the current situation the business is facing, CD-R King will continue to decline in the following years. If CD-R King does not resolve its current issues, the business will gradually close its branches and lose its potential customers.
SWOT ANALYSIS: AREAS OF CONSIDERATION & ANALYSIS
Areas of Consideration
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Course of Action 1:
Expand the operation of the business by actively engaging in the e-commerce industry.
Course of Action 2:
Create a unique selling proposition or product
Course of Action 3:
Improve the quality and durability of products.
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Course of Action 1 – Expand the operation of the business by actively engaging in the e-commerce industry.
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Advantages:
•It allows the business to reach a larger market.
•It has a greater potential for market growth.
•It has fewer expenses and it is cost-efficient.
•It has a broader customer base wherein e-commerce makes geographical boundaries insignificant.
•It is accessible anytime and anywhere.
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Disadvantages:
•There is a higher risk of encountering scams, fraud, and security issues.
•There is a higher competitive rivalry in a large pool of competitors.
•Similar complaints with the issues in the quality of the products will still be received.
•It would take a while to gain the customers’ trust because they cannot try and review the products’ quality before buying them, unlike in physical stores.
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Course of Action 2 – Create a unique selling proposition or product.
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Advantages:
•An increase in potential loyal customers
•An increase in loyal customers also means an increase in potential buyers because of the cumulative effect of recommendations from one person to another.
•When a salesperson acknowledges the quality of a product, it is easier for an employee to deliver it authentically- resulting in a smooth transaction.
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Disadvantages:
•There is a risk of the product not piquing interest and attention from customers.
•It narrows the possibility of improving the other products as the business will focus more on creating a solid unique selling proposition.
•It challenges the business to be consistent. If a business fails to give an effective product solution to a specific market segment, the resulting bad impact on the brand's image might spread across all of the company's consumer segments.
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Course of Action 3 – Improve the quality of the products.
Advantages:
•Customer satisfaction
•Increase business reputation
•Less return of deficit products
•Higher return on investment
•It can promote innovation in the workplace, allowing the business to be more creative with their products and marketing methods.
•As there is a change in the environment of the business, retraining employees is essential to learn enough details about the products to share with the consumers, which can partially solve the customer service issues of CD-R King.
•A change in the quality of the products can create a buzz for the previous buyers that it can attract more potential consumers as the deteriorating quality of the products of CD-R King has been an issue ever since.
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Disadvantages:
•It is costly.
•A change in the products may differ from the usual preferences of the consumers.
•The process of improving the products would take a long time and a few adjustments as well.
Analysis
SWOT ANALYSIS: CONCLUSION
The course of action no. 3, which is to improve the quality of the products, seems to be the most logical choice in CD-R King’s current situation. Based on the decision matrix, course of action no. 3 is best in terms of profitability, and comes second in the competitive advantage, cost-efficiency, and regulations/restrictions.
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Complying with the complaints of the consumers is the first step in improving and achieving success. Consumers are the reason a business can keep running, and by having trusted and loyal consumers, it could survive with a great performance in the long run. Additionally, the main issue of CD-R King will be resolved in this course of action, and it can take higher chances of reclaiming its popularity.
Furthermore, having higher profitability among the rest means that the other courses of action and extending its branches once more are possible to be achieved with greater success, although it could take a long period to accomplish them.