Lay Hong (LAYH) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Lay Hong (Malaysia)

Based on various researches at Oak Spring University , Lay Hong is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, supply chains are disrupted by pandemic , increasing household debt because of falling income levels, wage bills are increasing, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, etc

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Introduction to SWOT Analysis of Lay Hong

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Lay Hong can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Lay Hong, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Lay Hong 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Lay Hong can be done for the following purposes –
1. Strategic planning of Lay Hong
2. Improving business portfolio management of Lay Hong
3. Assessing feasibility of the new initiative in Malaysia
4. Making a Fish/Livestock sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Lay Hong

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Strengths of Lay Hong | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Lay Hong are -

High brand equity

– Lay Hong has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Lay Hong to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Training and development

– Lay Hong has one of the best training and development program in Consumer/Non-Cyclical 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.

Superior customer experience

– The customer experience strategy of Lay Hong in Fish/Livestock industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Strong track record of project management in the Fish/Livestock industry

– Lay Hong is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Highly skilled collaborators

– Lay Hong has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Fish/Livestock industry. Secondly the value chain collaborators of Lay Hong have helped the firm to develop new products and bring them quickly to the marketplace.

Analytics focus

– Lay Hong 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 Fish/Livestock industry. The technology infrastructure of Malaysia 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.

Ability to lead change in Fish/Livestock

– Lay Hong is one of the leading players in the Fish/Livestock industry in Malaysia. Over the years it has not only transformed the business landscape in the Fish/Livestock industry in Malaysia but also across the existing markets. The ability to lead change has enabled Lay Hong in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Digital Transformation in Fish/Livestock industry

- digital transformation varies from industry to industry. For Lay Hong digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Lay Hong 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.

Learning organization

- Lay Hong 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 Lay Hong is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Lay Hong emphasize – knowledge, initiative, and innovation.

Ability to recruit top talent

– Lay Hong is one of the leading players in the Fish/Livestock industry in Malaysia. It is in a position to attract the best talent available in Malaysia. The firm has a robust talent identification program that helps in identifying the brightest.

High switching costs

– The high switching costs that Lay Hong 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.

Cross disciplinary teams

– Horizontal connected teams at the Lay Hong 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.

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Weaknesses of Lay Hong | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Lay Hong are -

High operating costs

– Compare to the competitors, Lay Hong has high operating costs in the Fish/Livestock industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Lay Hong lucrative customers.

High bargaining power of channel partners in Fish/Livestock industry

– because of the regulatory requirements in Malaysia, Lay Hong 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 Fish/Livestock industry.

Slow decision making process

– As mentioned earlier in the report, Lay Hong has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Fish/Livestock industry over the last five years. Lay Hong 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.

Compensation and incentives

– The revenue per employee of Lay Hong is just above the Fish/Livestock industry average. It 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.

Increasing silos among functional specialists

– The organizational structure of Lay Hong is dominated by functional specialists. It is not different from other players in the Fish/Livestock industry, but Lay Hong needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Lay Hong to focus more on services in the Fish/Livestock industry rather than just following the product oriented approach.

Products dominated business model

– Even though Lay Hong has some of the most successful models in the Fish/Livestock industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Lay Hong 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 Lay Hong needs to have more collaboration between its sales team and marketing team. Sales professionals in the Fish/Livestock industry have deep experience in developing customer relationships. Marketing department at Lay Hong can leverage the sales team experience to cultivate customer relationships as Lay Hong is planning to shift buying processes online.

No frontier risks strategy

– From the 10K / annual statement of Lay Hong, it seems that company is thinking out the frontier risks that can impact Fish/Livestock industry. 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.

High dependence on existing supply chain

– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Lay Hong supply chain. Even after few cautionary changes, Lay Hong is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Lay Hong vulnerable to further global disruptions in South East Asia.

Lack of clear differentiation of Lay Hong products

– To increase the profitability and margins on the products, Lay Hong needs to provide more differentiated products than what it is currently offering in the marketplace.

Workers concerns about automation

– As automation is fast increasing in the Fish/Livestock industry, Lay Hong 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.

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Lay Hong Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Lay Hong are -

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Lay Hong 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 Lay Hong to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Lay Hong is facing challenges because of the dominance of functional experts in the organization. Lay Hong can utilize new technology in the field of Fish/Livestock industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Fish/Livestock industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Lay Hong 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. Lay Hong 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 Lay Hong in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Fish/Livestock industry, and it will provide faster access to the consumers.

Manufacturing automation

– Lay Hong can use the latest technology developments to improve its manufacturing and designing process in Fish/Livestock sector. 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 in Fish/Livestock industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Lay Hong in the Fish/Livestock industry. Now Lay Hong can target international markets with far fewer capital restrictions requirements than the existing system.

Learning at scale

– Online learning technologies has now opened space for Lay Hong 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.

Developing new processes and practices

– Lay Hong can develop new processes and procedures in Fish/Livestock 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.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Fish/Livestock industry, but it has also influenced the consumer preferences. Lay Hong can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

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 Lay Hong 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.

Loyalty marketing

– Lay Hong 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 Lay Hong 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 Fish/Livestock industry.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Lay Hong can use these opportunities to build new business models that can help the communities that Lay Hong operates in. Secondly it can use opportunities from government spending in Fish/Livestock sector.

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Threats Lay Hong External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Lay Hong are -

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 Lay Hong business can come under increasing regulations regarding data privacy, data security, etc.

Shortening product life cycle

– it is one of the major threat that Lay Hong is facing in Fish/Livestock sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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 Lay Hong.

High dependence on third party suppliers

– Lay Hong 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.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Lay Hong 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 Lay Hong prominent markets.

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. Lay Hong 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.

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.

Stagnating economy with rate increase

– Lay Hong can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the Fish/Livestock industry.

Easy access to finance

– Easy access to finance in Fish/Livestock industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Lay Hong can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Lay Hong in Fish/Livestock industry. The Fish/Livestock industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.

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 Lay Hong in the Fish/Livestock sector and impact the bottomline of the organization.

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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Lay Hong may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Fish/Livestock sector.

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Weighted SWOT Analysis of Lay Hong Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Lay Hong 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 Lay Hong 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 Lay Hong 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 Lay Hong 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 Lay Hong needs to make to build a sustainable competitive advantage.

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