Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version
The case study shows the development of Chinese technology company ZPMC, which entered the container crane market in 1992 and, in the space of 15 years, achieved a global market share of over 70 percent. The case gives particular insights into the strategic decisions that led to ZPMC's competitors being pushed aside in a market previously dominated by Western providers. It also clearly illustrates the risks and limitations facing companies that are strongly focused on growth.
Authors :: Olaf Ploetner, Peter Utzig, Xuyi Wang, Qing Zhang
Swot Analysis of "Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version" written by Olaf Ploetner, Peter Utzig, Xuyi Wang, Qing Zhang includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Zpmc Zhenhua facing as an external strategic factors. Some of the topics covered in Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version case study are - Strategic Management Strategies, Marketing and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version casestudy better are - – cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, increasing energy prices, increasing commodity prices, talent flight as more people leaving formal jobs, there is backlash against globalization, supply chains are disrupted by pandemic ,
technology disruption, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Zpmc Zhenhua, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Zpmc Zhenhua 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 Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version can be done for the following purposes –
1. Strategic planning using facts provided in Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version case study
2. Improving business portfolio management of Zpmc Zhenhua
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Zpmc Zhenhua
Strengths Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Zpmc Zhenhua in Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Zpmc Zhenhua in the sector have low bargaining power. Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Zpmc Zhenhua to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Zpmc Zhenhua is one of the most innovative firm in sector. Manager in Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Zpmc Zhenhua digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Zpmc Zhenhua 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
– Zpmc Zhenhua has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
High switching costs
– The high switching costs that Zpmc Zhenhua 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
– Zpmc Zhenhua is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Strategy & Execution field
– Zpmc Zhenhua is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Zpmc Zhenhua in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Zpmc Zhenhua in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Zpmc Zhenhua is present in almost all the verticals within the industry. This has provided firm in Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version case study 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.
Effective Research and Development (R&D)
– Zpmc Zhenhua has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Zpmc Zhenhua is one of the leading recruiters in the industry. Managers in the Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version Harvard Business Review case study comprises – understanding the underlying the factors in the 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.
Weaknesses Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version are -
Increasing silos among functional specialists
– The organizational structure of Zpmc Zhenhua is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Zpmc Zhenhua needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Zpmc Zhenhua to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version, in the dynamic environment Zpmc Zhenhua has struggled to respond to the nimble upstart competition. Zpmc Zhenhua has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version, is just above the industry average. Zpmc Zhenhua 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.
Interest costs
– Compare to the competition, Zpmc Zhenhua has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Need for greater diversity
– Zpmc Zhenhua has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Low market penetration in new markets
– Outside its home market of Zpmc Zhenhua, firm in the HBR case study Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Zpmc Zhenhua has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Zpmc Zhenhua 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 industry using digital technology.
No frontier risks strategy
– After analyzing the HBR case study Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow to strategic competitive environment developments
– As Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version HBR case study mentions - Zpmc Zhenhua takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High cash cycle compare to competitors
Zpmc Zhenhua has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Opportunities Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version are -
Manufacturing automation
– Zpmc Zhenhua can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Zpmc Zhenhua in the consumer business. Now Zpmc Zhenhua 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 Zpmc Zhenhua has opened avenues for new revenue streams for the organization in the industry. This can help Zpmc Zhenhua to build a more holistic ecosystem as suggested in the Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version case study. Zpmc Zhenhua can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Zpmc Zhenhua can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Zpmc Zhenhua can use these opportunities to build new business models that can help the communities that Zpmc Zhenhua operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Learning at scale
– Online learning technologies has now opened space for Zpmc Zhenhua 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Zpmc Zhenhua is facing challenges because of the dominance of functional experts in the organization. Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Zpmc Zhenhua 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 Zpmc Zhenhua to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Zpmc Zhenhua to increase its market reach. Zpmc Zhenhua 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.
Buying journey improvements
– Zpmc Zhenhua can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version suggest that firm 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Zpmc Zhenhua in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Loyalty marketing
– Zpmc Zhenhua 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Zpmc Zhenhua 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.
Threats Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version are -
Increasing wage structure of Zpmc Zhenhua
– 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 Zpmc Zhenhua.
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 Zpmc Zhenhua business can come under increasing regulations regarding data privacy, data security, etc.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Zpmc Zhenhua can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Zpmc Zhenhua 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 Strategy & Execution industry regulations.
Technology acceleration in Forth Industrial Revolution
– Zpmc Zhenhua has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Zpmc Zhenhua needs to keep up with the evolution of technology in the Strategy & Execution 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.
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. Zpmc Zhenhua 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.
Consumer confidence and its impact on Zpmc Zhenhua 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 the industry and other sectors.
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 Zpmc Zhenhua.
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.
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. Zpmc Zhenhua needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Zpmc Zhenhua 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 prominent markets illustrated in HBR case study Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version, Zpmc Zhenhua may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Zpmc Zhenhua with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version 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 the case study Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version 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 the Harvard case study Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version 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 Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version is 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 Zpmc Zhenhua needs to make to build a sustainable competitive advantage.