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 - – supply chains are disrupted by pandemic , there is increasing trade war between United States & China, increasing commodity prices, there is backlash against globalization, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs,
geopolitical disruptions, talent flight as more people leaving formal jobs, 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 -
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.
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.
Sustainable margins compare to other players in Strategy & Execution industry
– Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version firm has clearly differentiated products in the market place. This has enabled Zpmc Zhenhua to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Zpmc Zhenhua to invest into research and development (R&D) and innovation.
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.
Highly skilled collaborators
– Zpmc Zhenhua has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Zpmc Zhenhua has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Zpmc Zhenhua 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.
Organizational Resilience of Zpmc Zhenhua
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Zpmc Zhenhua does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
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.
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.
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 -
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.
Skills based hiring
– The stress on hiring functional specialists at Zpmc Zhenhua 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.
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.
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.
Slow decision making process
– As mentioned earlier in the report, Zpmc Zhenhua has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Zpmc Zhenhua 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.
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.
Aligning sales with marketing
– It come across in the case study Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version can leverage the sales team experience to cultivate customer relationships as Zpmc Zhenhua is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, Olaf Ploetner, Peter Utzig, Xuyi Wang, Qing Zhang suggests that, Zpmc Zhenhua 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 industry.
Lack of clear differentiation of Zpmc Zhenhua products
– To increase the profitability and margins on the products, Zpmc Zhenhua needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Zpmc Zhenhua is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
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 -
Using analytics as competitive advantage
– Zpmc Zhenhua has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Zpmc Zhenhua to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Zpmc Zhenhua 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. Zpmc Zhenhua 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Zpmc Zhenhua 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, as suggested in case study, Shanghai Zhenhua Heavy Industries Co., Ltd (ZPMC), Chinese Version, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Zpmc Zhenhua can develop new processes and procedures in Strategy & Execution 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.
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 Zpmc Zhenhua 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.
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.
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.
Building a culture of innovation
– managers at Zpmc Zhenhua 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 Strategy & Execution segment.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Zpmc Zhenhua can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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.
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.
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.
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 -
High dependence on third party suppliers
– Zpmc Zhenhua 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, 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 .
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.
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.
Shortening product life cycle
– it is one of the major threat that Zpmc Zhenhua is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
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.
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.
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 Zpmc Zhenhua in the Strategy & Execution sector and impact the bottomline of the organization.
Environmental challenges
– Zpmc Zhenhua 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. Zpmc Zhenhua can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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.
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.
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.
