SWOT Analysis / TOWS Matrix for Hengyang Petrochemical (Singapore)
Based on various researches at Oak Spring University , Hengyang Petrochemical is operating in a macro-environment that has been destablized by – cloud computing is disrupting traditional business models, wage bills are increasing, central banks are concerned over increasing inflation, technology disruption, talent flight as more people leaving formal jobs, increasing energy prices, digital marketing is dominated by two big players Facebook and Google,
increasing household debt because of falling income levels, increasing commodity prices, etc
Introduction to SWOT Analysis of Hengyang Petrochemical
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Hengyang Petrochemical can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hengyang Petrochemical, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hengyang Petrochemical 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 Hengyang Petrochemical can be done for the following purposes –
1. Strategic planning of Hengyang Petrochemical
2. Improving business portfolio management of Hengyang Petrochemical
3. Assessing feasibility of the new initiative in Singapore
4. Making a Oil Well Services & Equipment sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hengyang Petrochemical
Strengths of Hengyang Petrochemical | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hengyang Petrochemical are -
Training and development
– Hengyang Petrochemical has one of the best training and development program in Energy 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 Hengyang Petrochemical in the Energy sector have low bargaining power. Hengyang Petrochemical has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hengyang Petrochemical to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Oil Well Services & Equipment
– Hengyang Petrochemical is one of the leading players in the Oil Well Services & Equipment industry in Singapore. Over the years it has not only transformed the business landscape in the Oil Well Services & Equipment industry in Singapore but also across the existing markets. The ability to lead change has enabled Hengyang Petrochemical in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Hengyang Petrochemical has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Oil Well Services & Equipment industry. Secondly the value chain collaborators of Hengyang Petrochemical have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management in the Oil Well Services & Equipment industry
– Hengyang Petrochemical is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Hengyang Petrochemical 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 Hengyang Petrochemical is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Hengyang Petrochemical emphasize – knowledge, initiative, and innovation.
Digital Transformation in Oil Well Services & Equipment industry
- digital transformation varies from industry to industry. For Hengyang Petrochemical digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hengyang Petrochemical 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.
Sustainable margins compare to other players in Oil Well Services & Equipment industry
– Hengyang Petrochemical has clearly differentiated products in the market place. This has enabled Hengyang Petrochemical to fetch slight price premium compare to the competitors in the Oil Well Services & Equipment industry. The sustainable margins have also helped Hengyang Petrochemical to invest into research and development (R&D) and innovation.
Innovation driven organization
– Hengyang Petrochemical is one of the most innovative firm in Oil Well Services & Equipment sector.
Effective Research and Development (R&D)
– Hengyang Petrochemical has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Hengyang Petrochemical staying ahead in the Oil Well Services & Equipment industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Hengyang Petrochemical in Oil Well Services & Equipment industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Hengyang Petrochemical is one of the leading players in the Oil Well Services & Equipment industry in Singapore. It is in a position to attract the best talent available in Singapore. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses of Hengyang Petrochemical | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hengyang Petrochemical are -
Increasing silos among functional specialists
– The organizational structure of Hengyang Petrochemical is dominated by functional specialists. It is not different from other players in the Oil Well Services & Equipment industry, but Hengyang Petrochemical needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hengyang Petrochemical to focus more on services in the Oil Well Services & Equipment industry rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, Hengyang Petrochemical has high operating costs in the Oil Well Services & Equipment industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Hengyang Petrochemical lucrative customers.
Slow to strategic competitive environment developments
– As Hengyang Petrochemical is one of the leading players in the Oil Well Services & Equipment industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Oil Well Services & Equipment industry in last five years.
Slow decision making process
– As mentioned earlier in the report, Hengyang Petrochemical has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Oil Well Services & Equipment industry over the last five years. Hengyang Petrochemical 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.
Employees’ less understanding of Hengyang Petrochemical strategy
– From the outside it seems that the employees of Hengyang Petrochemical 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.
Skills based hiring in Oil Well Services & Equipment industry
– The stress on hiring functional specialists at Hengyang Petrochemical has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Need for greater diversity
– Hengyang Petrochemical 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 dependence on Hengyang Petrochemical ‘s star products
– The top 2 products and services of Hengyang Petrochemical still accounts for major business revenue. This dependence on star products in Oil Well Services & Equipment industry has resulted into insufficient focus on developing new products, even though Hengyang Petrochemical has relatively successful track record of launching new products.
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 Hengyang Petrochemical supply chain. Even after few cautionary changes, Hengyang Petrochemical is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hengyang Petrochemical vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Hengyang Petrochemical products
– To increase the profitability and margins on the products, Hengyang Petrochemical needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Hengyang Petrochemical 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.
Hengyang Petrochemical Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Hengyang Petrochemical are -
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. Hengyang Petrochemical can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hengyang Petrochemical is facing challenges because of the dominance of functional experts in the organization. Hengyang Petrochemical can utilize new technology in the field of Oil Well Services & Equipment industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hengyang Petrochemical can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Hengyang Petrochemical 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.
Better consumer reach
– The expansion of the 5G network will help Hengyang Petrochemical to increase its market reach. Hengyang Petrochemical will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Oil Well Services & Equipment industry, but it has also influenced the consumer preferences. Hengyang Petrochemical can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Use of Bitcoin and other crypto currencies for transactions in Oil Well Services & Equipment industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Hengyang Petrochemical in the Oil Well Services & Equipment industry. Now Hengyang Petrochemical can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hengyang Petrochemical 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 Hengyang Petrochemical to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Oil Well Services & Equipment industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Hengyang Petrochemical 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. Hengyang Petrochemical 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.
Building a culture of innovation
– managers at Hengyang Petrochemical 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 Oil Well Services & Equipment industry.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hengyang Petrochemical in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Oil Well Services & Equipment industry, and it will provide faster access to the consumers.
Leveraging digital technologies
– Hengyang Petrochemical 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hengyang Petrochemical 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.
Threats Hengyang Petrochemical External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Hengyang Petrochemical are -
Regulatory challenges
– Hengyang Petrochemical 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 Oil Well Services & Equipment industry regulations.
Environmental challenges
– Hengyang Petrochemical 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. Hengyang Petrochemical can take advantage of this fund but it will also bring new competitors in the Oil Well Services & Equipment industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Oil Well Services & Equipment industry are lowering. It can presents Hengyang Petrochemical with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Oil Well Services & Equipment sector.
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 Hengyang Petrochemical.
Technology acceleration in Forth Industrial Revolution
– Hengyang Petrochemical has witnessed rapid integration of technology during Covid-19 in the Oil Well Services & Equipment industry. As one of the leading players in the industry, Hengyang Petrochemical needs to keep up with the evolution of technology in the Oil Well Services & Equipment 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.
Shortening product life cycle
– it is one of the major threat that Hengyang Petrochemical is facing in Oil Well Services & Equipment sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Hengyang Petrochemical business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Hengyang Petrochemical 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.
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. Hengyang Petrochemical 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.
Consumer confidence and its impact on Hengyang Petrochemical 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 Oil Well Services & Equipment industry and other sectors.
Stagnating economy with rate increase
– Hengyang Petrochemical 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 Oil Well Services & Equipment industry.
Increasing wage structure of Hengyang Petrochemical
– 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 Hengyang Petrochemical.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hengyang Petrochemical in Oil Well Services & Equipment industry. The Oil Well Services & Equipment 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.
Weighted SWOT Analysis of Hengyang Petrochemical Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Hengyang Petrochemical 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 Hengyang Petrochemical 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 Hengyang Petrochemical 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 Hengyang Petrochemical 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 Hengyang Petrochemical needs to make to build a sustainable competitive advantage.
