Based on various researches at Oak Spring University , Wonhe Multimedia Commerce Ltd is operating in a macro-environment that has been destablized by – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, there is backlash against globalization, increasing government debt because of Covid-19 spendings, technology disruption, digital marketing is dominated by two big players Facebook and Google, increasing energy prices,
geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Wonhe Multimedia Commerce Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Wonhe Multimedia Commerce Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Wonhe Multimedia Commerce Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Wonhe Multimedia Commerce Ltd 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 Wonhe Multimedia Commerce Ltd can be done for the following purposes –
1. Strategic planning of Wonhe Multimedia Commerce Ltd
2. Improving business portfolio management of Wonhe Multimedia Commerce Ltd
3. Assessing feasibility of the new initiative in Australia
4. Making a Software & Programming sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Wonhe Multimedia Commerce Ltd
Strengths of Wonhe Multimedia Commerce Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Wonhe Multimedia Commerce Ltd are -
Effective Research and Development (R&D)
– Wonhe Multimedia Commerce Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Wonhe Multimedia Commerce Ltd staying ahead in the Software & Programming industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Wonhe Multimedia Commerce Ltd 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.
Highly skilled collaborators
– Wonhe Multimedia Commerce Ltd has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Software & Programming industry. Secondly the value chain collaborators of Wonhe Multimedia Commerce Ltd have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Wonhe Multimedia Commerce Ltd 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 Wonhe Multimedia Commerce Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Wonhe Multimedia Commerce Ltd emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Wonhe Multimedia Commerce Ltd in Software & Programming industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Software & Programming
– Wonhe Multimedia Commerce Ltd is one of the leading players in the Software & Programming industry in Australia. Over the years it has not only transformed the business landscape in the Software & Programming industry in Australia but also across the existing markets. The ability to lead change has enabled Wonhe Multimedia Commerce Ltd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management in the Software & Programming industry
– Wonhe Multimedia Commerce Ltd is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Wonhe Multimedia Commerce Ltd
– The covid-19 pandemic has put organizational resilience at the centre of everthing Wonhe Multimedia Commerce Ltd does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Wonhe Multimedia Commerce Ltd is present in almost all the verticals within the Software & Programming industry. This has provided Wonhe Multimedia Commerce Ltd 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.
Analytics focus
– Wonhe Multimedia Commerce Ltd is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the Software & Programming industry. The technology infrastructure of Australia is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Training and development
– Wonhe Multimedia Commerce Ltd 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.
Low bargaining power of suppliers
– Suppliers of Wonhe Multimedia Commerce Ltd in the Technology sector have low bargaining power. Wonhe Multimedia Commerce Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Wonhe Multimedia Commerce Ltd to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses of Wonhe Multimedia Commerce Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Wonhe Multimedia Commerce Ltd are -
Skills based hiring in Software & Programming industry
– The stress on hiring functional specialists at Wonhe Multimedia Commerce Ltd 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.
Slow to strategic competitive environment developments
– As Wonhe Multimedia Commerce Ltd is one of the leading players in the Software & Programming industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Software & Programming industry in last five years.
High cash cycle compare to competitors
Wonhe Multimedia Commerce Ltd 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, Wonhe Multimedia Commerce Ltd 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, Wonhe Multimedia Commerce Ltd 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.
Employees’ less understanding of Wonhe Multimedia Commerce Ltd strategy
– From the outside it seems that the employees of Wonhe Multimedia Commerce Ltd 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.
Lack of clear differentiation of Wonhe Multimedia Commerce Ltd products
– To increase the profitability and margins on the products, Wonhe Multimedia Commerce Ltd needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners in Software & Programming industry
– because of the regulatory requirements in Australia, Wonhe Multimedia Commerce Ltd 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 Software & Programming industry.
Increasing silos among functional specialists
– The organizational structure of Wonhe Multimedia Commerce Ltd is dominated by functional specialists. It is not different from other players in the Software & Programming industry, but Wonhe Multimedia Commerce Ltd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Wonhe Multimedia Commerce Ltd to focus more on services in the Software & Programming industry rather than just following the product oriented approach.
Products dominated business model
– Even though Wonhe Multimedia Commerce Ltd 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. Wonhe Multimedia Commerce Ltd should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– From the outside it seems that Wonhe Multimedia Commerce Ltd 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 Wonhe Multimedia Commerce Ltd can leverage the sales team experience to cultivate customer relationships as Wonhe Multimedia Commerce Ltd is planning to shift buying processes online.
Wonhe Multimedia Commerce Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Wonhe Multimedia Commerce Ltd are -
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. Wonhe Multimedia Commerce Ltd 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. Wonhe Multimedia Commerce Ltd 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Wonhe Multimedia Commerce Ltd in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Software & Programming industry, 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 Software & Programming industry, but it has also influenced the consumer preferences. Wonhe Multimedia Commerce Ltd can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Wonhe Multimedia Commerce Ltd 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Wonhe Multimedia Commerce Ltd is facing challenges because of the dominance of functional experts in the organization. Wonhe Multimedia Commerce Ltd can utilize new technology in the field of Software & Programming industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Use of Bitcoin and other crypto currencies for transactions in Software & Programming industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Wonhe Multimedia Commerce Ltd in the Software & Programming industry. Now Wonhe Multimedia Commerce Ltd can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Wonhe Multimedia Commerce Ltd can use these opportunities to build new business models that can help the communities that Wonhe Multimedia Commerce Ltd operates in. Secondly it can use opportunities from government spending in Software & Programming sector.
Learning at scale
– Online learning technologies has now opened space for Wonhe Multimedia Commerce Ltd 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Wonhe Multimedia Commerce Ltd 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.
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 Wonhe Multimedia Commerce Ltd 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
– Wonhe Multimedia Commerce Ltd 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.
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. Wonhe Multimedia Commerce Ltd can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Wonhe Multimedia Commerce Ltd can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Wonhe Multimedia Commerce Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Wonhe Multimedia Commerce Ltd 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 Wonhe Multimedia Commerce Ltd.
Regulatory challenges
– Wonhe Multimedia Commerce Ltd 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.
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. Wonhe Multimedia Commerce Ltd needs to understand the core reasons impacting the Software & Programming industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Wonhe Multimedia Commerce Ltd is facing in Software & Programming sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Wonhe Multimedia Commerce Ltd 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.
Environmental challenges
– Wonhe Multimedia Commerce Ltd 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. Wonhe Multimedia Commerce Ltd 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, Wonhe Multimedia Commerce Ltd 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.
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 Wonhe Multimedia Commerce Ltd in the Software & Programming sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in Software & Programming industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Wonhe Multimedia Commerce Ltd can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Wonhe Multimedia Commerce Ltd has witnessed rapid integration of technology during Covid-19 in the Software & Programming industry. As one of the leading players in the industry, Wonhe Multimedia Commerce Ltd 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Wonhe Multimedia Commerce Ltd 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 Wonhe Multimedia Commerce Ltd prominent markets.
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 Wonhe Multimedia Commerce Ltd business can come under increasing regulations regarding data privacy, data security, etc.
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 Wonhe Multimedia Commerce Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Wonhe Multimedia Commerce Ltd 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 Wonhe Multimedia Commerce Ltd 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 Wonhe Multimedia Commerce Ltd 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 Wonhe Multimedia Commerce Ltd 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 Wonhe Multimedia Commerce Ltd needs to make to build a sustainable competitive advantage.