SWOT Analysis / TOWS Matrix for Chinanet Online (United States)
Based on various researches at Oak Spring University , Chinanet Online is operating in a macro-environment that has been destablized by – increasing commodity prices, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization,
central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Chinanet Online can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Chinanet Online, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Chinanet Online 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 Chinanet Online can be done for the following purposes –
1. Strategic planning of Chinanet Online
2. Improving business portfolio management of Chinanet Online
3. Assessing feasibility of the new initiative in United States
4. Making a Advertising sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Chinanet Online
Strengths of Chinanet Online | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Chinanet Online are -
Ability to lead change in Advertising
– Chinanet Online is one of the leading players in the Advertising industry in United States. Over the years it has not only transformed the business landscape in the Advertising industry in United States but also across the existing markets. The ability to lead change has enabled Chinanet Online in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Chinanet Online has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Chinanet Online staying ahead in the Advertising industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Chinanet Online is one of the leading players in the Advertising industry in United States. It is in a position to attract the best talent available in United States. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Chinanet Online is present in almost all the verticals within the Advertising industry. This has provided Chinanet Online 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.
Superior customer experience
– The customer experience strategy of Chinanet Online in Advertising industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Chinanet Online has one of the best training and development program in Services industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
High switching costs
– The high switching costs that Chinanet Online 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.
Organizational Resilience of Chinanet Online
– The covid-19 pandemic has put organizational resilience at the centre of everthing Chinanet Online does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy of Chinanet Online comprises – understanding the underlying the factors in the Advertising industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Analytics focus
– Chinanet Online 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 Advertising industry. The technology infrastructure of United States 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.
Sustainable margins compare to other players in Advertising industry
– Chinanet Online has clearly differentiated products in the market place. This has enabled Chinanet Online to fetch slight price premium compare to the competitors in the Advertising industry. The sustainable margins have also helped Chinanet Online to invest into research and development (R&D) and innovation.
High brand equity
– Chinanet Online has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Chinanet Online to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of Chinanet Online | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Chinanet Online are -
High operating costs
– Compare to the competitors, Chinanet Online has high operating costs in the Advertising industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Chinanet Online lucrative customers.
High cash cycle compare to competitors
Chinanet Online has a high cash cycle compare to other players in the Advertising industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Compensation and incentives
– The revenue per employee of Chinanet Online is just above the Advertising 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Chinanet Online is slow explore the new channels of communication. These new channels of communication can help Chinanet Online to provide better information regarding Advertising products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, Chinanet Online has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Advertising industry over the last five years. Chinanet Online 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.
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 Chinanet Online supply chain. Even after few cautionary changes, Chinanet Online is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Chinanet Online vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Chinanet Online has some of the most successful models in the Advertising industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Chinanet Online should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Chinanet Online 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.
Capital Spending Reduction
– Even during the low interest decade, Chinanet Online has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Advertising industry using digital technology.
Lack of clear differentiation of Chinanet Online products
– To increase the profitability and margins on the products, Chinanet Online needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ less understanding of Chinanet Online strategy
– From the outside it seems that the employees of Chinanet Online 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.
Chinanet Online Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Chinanet Online are -
Developing new processes and practices
– Chinanet Online can develop new processes and procedures in Advertising 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.
Use of Bitcoin and other crypto currencies for transactions in Advertising industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Chinanet Online in the Advertising industry. Now Chinanet Online 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 Chinanet Online 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 Chinanet Online to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Chinanet Online can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Chinanet Online can use the latest technology developments to improve its manufacturing and designing process in Advertising 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Chinanet Online can use these opportunities to build new business models that can help the communities that Chinanet Online operates in. Secondly it can use opportunities from government spending in Advertising sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Chinanet Online is facing challenges because of the dominance of functional experts in the organization. Chinanet Online can utilize new technology in the field of Advertising industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Chinanet Online 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.
Better consumer reach
– The expansion of the 5G network will help Chinanet Online to increase its market reach. Chinanet Online 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.
Building a culture of innovation
– managers at Chinanet Online 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 Advertising industry.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Chinanet Online in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Advertising industry, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Chinanet Online has opened avenues for new revenue streams for the organization in Advertising industry. This can help Chinanet Online to build a more holistic ecosystem for Chinanet Online products in the Advertising industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Chinanet Online has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Advertising sector. This continuous investment in analytics has enabled Chinanet Online to build a competitive advantage using analytics. The analytics driven competitive advantage can help Chinanet Online to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Chinanet Online External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Chinanet Online are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Chinanet Online 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 Chinanet Online prominent markets.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Chinanet Online may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Advertising sector.
Easy access to finance
– Easy access to finance in Advertising industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Chinanet Online can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Chinanet Online 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 Advertising industry and other sectors.
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.
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 Chinanet Online.
Technology acceleration in Forth Industrial Revolution
– Chinanet Online has witnessed rapid integration of technology during Covid-19 in the Advertising industry. As one of the leading players in the industry, Chinanet Online needs to keep up with the evolution of technology in the Advertising 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.
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. Chinanet Online needs to understand the core reasons impacting the Advertising industry. This will help it in building a better workplace.
Regulatory challenges
– Chinanet Online 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 Advertising industry regulations.
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 Chinanet Online in the Advertising sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Chinanet Online 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Advertising industry are lowering. It can presents Chinanet Online with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Advertising sector.
Stagnating economy with rate increase
– Chinanet Online 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 Advertising industry.
Weighted SWOT Analysis of Chinanet Online Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Chinanet Online 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 Chinanet Online 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 Chinanet Online 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 Chinanet Online 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 Chinanet Online needs to make to build a sustainable competitive advantage.
