China Digital Video (8280) SWOT Analysis / TOWS Matrix / MBA Resources
Software & Programming
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for China Digital Video (Hong Kong)
Based on various researches at Oak Spring University , China Digital Video is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, wage bills are increasing, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China,
competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of China Digital Video
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that China Digital Video can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the China Digital Video, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which China Digital Video 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 China Digital Video can be done for the following purposes –
1. Strategic planning of China Digital Video
2. Improving business portfolio management of China Digital Video
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Software & Programming sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of China Digital Video
Strengths of China Digital Video | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of China Digital Video are -
Organizational Resilience of China Digital Video
– The covid-19 pandemic has put organizational resilience at the centre of everthing China Digital Video does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- China Digital Video 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 China Digital Video is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at China Digital Video emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of China Digital Video in the Technology sector have low bargaining power. China Digital Video has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps China Digital Video to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management in the Software & Programming industry
– China Digital Video is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Software & Programming industry
- digital transformation varies from industry to industry. For China Digital Video digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. China Digital Video 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.
Cross disciplinary teams
– Horizontal connected teams at the China Digital Video 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.
Ability to recruit top talent
– China Digital Video is one of the leading players in the Software & Programming 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.
Training and development
– China Digital Video has one of the best training and development program in Technology 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.
High brand equity
– China Digital Video has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled China Digital Video to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– China Digital Video is one of the most innovative firm in Software & Programming sector.
High switching costs
– The high switching costs that China Digital Video 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.
Ability to lead change in Software & Programming
– China Digital Video is one of the leading players in the Software & Programming industry in Hong Kong. Over the years it has not only transformed the business landscape in the Software & Programming industry in Hong Kong but also across the existing markets. The ability to lead change has enabled China Digital Video in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses of China Digital Video | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of China Digital Video are -
Low market penetration in new markets
– Outside its home market of Hong Kong, China Digital Video needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though China Digital Video has some of the most successful models in the Software & Programming industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. China Digital Video should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of China Digital Video is dominated by functional specialists. It is not different from other players in the Software & Programming industry, but China Digital Video needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help China Digital Video to focus more on services in the Software & Programming industry rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, China Digital Video has high operating costs in the Software & Programming industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract China Digital Video lucrative customers.
Aligning sales with marketing
– From the outside it seems that China Digital Video needs to have more collaboration between its sales team and marketing team. Sales professionals in the Software & Programming industry have deep experience in developing customer relationships. Marketing department at China Digital Video can leverage the sales team experience to cultivate customer relationships as China Digital Video is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative at China Digital Video, in the dynamic environment of Software & Programming industry it has struggled to respond to the nimble upstart competition. China Digital Video has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, China Digital Video is slow explore the new channels of communication. These new channels of communication can help China Digital Video to provide better information regarding Software & Programming products and services. It can also build an online community to further reach out to potential customers.
High dependence on China Digital Video ‘s star products
– The top 2 products and services of China Digital Video still accounts for major business revenue. This dependence on star products in Software & Programming industry has resulted into insufficient focus on developing new products, even though China Digital Video has relatively successful track record of launching new products.
High cash cycle compare to competitors
China Digital Video has a high cash cycle compare to other players in the Software & Programming industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Interest costs
– Compare to the competition, China Digital Video 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.
Workers concerns about automation
– As automation is fast increasing in the Software & Programming industry, China Digital Video 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.
China Digital Video Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of China Digital Video are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, China Digital Video 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 China Digital Video to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of China Digital Video has opened avenues for new revenue streams for the organization in Software & Programming industry. This can help China Digital Video to build a more holistic ecosystem for China Digital Video products in the Software & Programming industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– China Digital Video can improve the customer journey of consumers in the Software & Programming 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Software & Programming industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. China Digital Video 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. China Digital Video 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.
Leveraging digital technologies
– China Digital Video can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Using analytics as competitive advantage
– China Digital Video has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Software & Programming sector. This continuous investment in analytics has enabled China Digital Video to build a competitive advantage using analytics. The analytics driven competitive advantage can help China Digital Video to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 China Digital Video 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.
Developing new processes and practices
– China Digital Video can develop new processes and procedures in Software & Programming 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects China Digital Video can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, China Digital Video can use these opportunities to build new business models that can help the communities that China Digital Video operates in. Secondly it can use opportunities from government spending in Software & Programming sector.
Loyalty marketing
– China Digital Video 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 China Digital Video 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 Software & Programming industry.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for China Digital Video 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 China Digital Video to hire the very best people irrespective of their geographical location.
Threats China Digital Video External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of China Digital Video are -
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.
Environmental challenges
– China Digital Video 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. China Digital Video can take advantage of this fund but it will also bring new competitors in the Software & Programming industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, China Digital Video may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Software & Programming sector.
Shortening product life cycle
– it is one of the major threat that China Digital Video is facing in Software & Programming sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– China Digital Video 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 Software & Programming industry regulations.
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 China Digital Video.
Consumer confidence and its impact on China Digital Video 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 Software & Programming industry and other sectors.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Software & Programming industry are lowering. It can presents China Digital Video with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Software & Programming sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, China Digital Video 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 China Digital Video prominent markets.
High dependence on third party suppliers
– China Digital Video 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.
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 China Digital Video business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of China Digital Video
– 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 China Digital Video.
Technology acceleration in Forth Industrial Revolution
– China Digital Video has witnessed rapid integration of technology during Covid-19 in the Software & Programming industry. As one of the leading players in the industry, China Digital Video needs to keep up with the evolution of technology in the Software & Programming 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.
Weighted SWOT Analysis of China Digital Video Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at China Digital Video 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 China Digital Video 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 China Digital Video 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 China Digital Video 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 China Digital Video needs to make to build a sustainable competitive advantage.
