Xin Hwa Holdings Bhd (XINW) SWOT Analysis / TOWS Matrix / MBA Resources
Trucking
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Xin Hwa Holdings Bhd (Malaysia)
Based on various researches at Oak Spring University , Xin Hwa Holdings Bhd is operating in a macro-environment that has been destablized by – increasing commodity prices, cloud computing is disrupting traditional business models, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies,
increasing transportation and logistics costs, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Xin Hwa Holdings Bhd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Xin Hwa Holdings Bhd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Xin Hwa Holdings Bhd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Xin Hwa Holdings Bhd 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 Xin Hwa Holdings Bhd can be done for the following purposes –
1. Strategic planning of Xin Hwa Holdings Bhd
2. Improving business portfolio management of Xin Hwa Holdings Bhd
3. Assessing feasibility of the new initiative in Malaysia
4. Making a Trucking sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Xin Hwa Holdings Bhd
Strengths of Xin Hwa Holdings Bhd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Xin Hwa Holdings Bhd are -
Ability to lead change in Trucking
– Xin Hwa Holdings Bhd is one of the leading players in the Trucking industry in Malaysia. Over the years it has not only transformed the business landscape in the Trucking industry in Malaysia but also across the existing markets. The ability to lead change has enabled Xin Hwa Holdings Bhd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Xin Hwa Holdings Bhd 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.
Highly skilled collaborators
– Xin Hwa Holdings Bhd has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Trucking industry. Secondly the value chain collaborators of Xin Hwa Holdings Bhd have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Xin Hwa Holdings Bhd 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.
Learning organization
- Xin Hwa Holdings Bhd 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 Xin Hwa Holdings Bhd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Xin Hwa Holdings Bhd emphasize – knowledge, initiative, and innovation.
Analytics focus
– Xin Hwa Holdings Bhd 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 Trucking 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.
Organizational Resilience of Xin Hwa Holdings Bhd
– The covid-19 pandemic has put organizational resilience at the centre of everthing Xin Hwa Holdings Bhd does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Xin Hwa Holdings Bhd in Trucking industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Xin Hwa Holdings Bhd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Xin Hwa Holdings Bhd staying ahead in the Trucking industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Xin Hwa Holdings Bhd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Xin Hwa Holdings Bhd 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.
Innovation driven organization
– Xin Hwa Holdings Bhd is one of the most innovative firm in Trucking sector.
Ability to recruit top talent
– Xin Hwa Holdings Bhd is one of the leading players in the Trucking 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.
Weaknesses of Xin Hwa Holdings Bhd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Xin Hwa Holdings Bhd are -
High operating costs
– Compare to the competitors, Xin Hwa Holdings Bhd has high operating costs in the Trucking industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Xin Hwa Holdings Bhd lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Xin Hwa Holdings Bhd is dominated by functional specialists. It is not different from other players in the Trucking industry, but Xin Hwa Holdings Bhd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Xin Hwa Holdings Bhd to focus more on services in the Trucking industry rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Xin Hwa Holdings Bhd 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.
High cash cycle compare to competitors
Xin Hwa Holdings Bhd has a high cash cycle compare to other players in the Trucking industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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 Xin Hwa Holdings Bhd supply chain. Even after few cautionary changes, Xin Hwa Holdings Bhd is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Xin Hwa Holdings Bhd vulnerable to further global disruptions in South East Asia.
Employees’ less understanding of Xin Hwa Holdings Bhd strategy
– From the outside it seems that the employees of Xin Hwa Holdings Bhd 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.
No frontier risks strategy
– From the 10K / annual statement of Xin Hwa Holdings Bhd, it seems that company is thinking out the frontier risks that can impact Trucking 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.
Compensation and incentives
– The revenue per employee of Xin Hwa Holdings Bhd is just above the Trucking 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.
Need for greater diversity
– Xin Hwa Holdings Bhd 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.
High bargaining power of channel partners in Trucking industry
– because of the regulatory requirements in Malaysia, Xin Hwa Holdings Bhd 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 Trucking industry.
Skills based hiring in Trucking industry
– The stress on hiring functional specialists at Xin Hwa Holdings Bhd 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.
Xin Hwa Holdings Bhd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Xin Hwa Holdings Bhd are -
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 Xin Hwa Holdings Bhd 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.
Use of Bitcoin and other crypto currencies for transactions in Trucking industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Xin Hwa Holdings Bhd in the Trucking industry. Now Xin Hwa Holdings Bhd can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Xin Hwa Holdings Bhd is facing challenges because of the dominance of functional experts in the organization. Xin Hwa Holdings Bhd can utilize new technology in the field of Trucking industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Developing new processes and practices
– Xin Hwa Holdings Bhd can develop new processes and procedures in Trucking 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.
Creating value in data economy
– The success of analytics program of Xin Hwa Holdings Bhd has opened avenues for new revenue streams for the organization in Trucking industry. This can help Xin Hwa Holdings Bhd to build a more holistic ecosystem for Xin Hwa Holdings Bhd products in the Trucking industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Xin Hwa Holdings Bhd 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Xin Hwa Holdings Bhd can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Xin Hwa Holdings Bhd 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, Xin Hwa Holdings Bhd 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.
Buying journey improvements
– Xin Hwa Holdings Bhd can improve the customer journey of consumers in the Trucking 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Trucking industry, but it has also influenced the consumer preferences. Xin Hwa Holdings Bhd can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Xin Hwa Holdings Bhd 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 Xin Hwa Holdings Bhd to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Xin Hwa Holdings Bhd can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Xin Hwa Holdings Bhd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Xin Hwa Holdings Bhd are -
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 Xin Hwa Holdings Bhd in the Trucking sector and impact the bottomline of the organization.
Environmental challenges
– Xin Hwa Holdings Bhd 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. Xin Hwa Holdings Bhd can take advantage of this fund but it will also bring new competitors in the Trucking industry.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Xin Hwa Holdings Bhd 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 Xin Hwa Holdings Bhd prominent markets.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Xin Hwa Holdings Bhd may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Trucking sector.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Trucking industry are lowering. It can presents Xin Hwa Holdings Bhd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Trucking sector.
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
– Xin Hwa Holdings Bhd 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 Trucking industry regulations.
High dependence on third party suppliers
– Xin Hwa Holdings Bhd 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.
Technology acceleration in Forth Industrial Revolution
– Xin Hwa Holdings Bhd has witnessed rapid integration of technology during Covid-19 in the Trucking industry. As one of the leading players in the industry, Xin Hwa Holdings Bhd needs to keep up with the evolution of technology in the Trucking 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.
Stagnating economy with rate increase
– Xin Hwa Holdings Bhd 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 Trucking industry.
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. Xin Hwa Holdings Bhd 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.
Increasing wage structure of Xin Hwa Holdings Bhd
– 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 Xin Hwa Holdings Bhd.
Weighted SWOT Analysis of Xin Hwa Holdings Bhd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Xin Hwa Holdings Bhd 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 Xin Hwa Holdings Bhd 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 Xin Hwa Holdings Bhd 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 Xin Hwa Holdings Bhd 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 Xin Hwa Holdings Bhd needs to make to build a sustainable competitive advantage.