China Shenhua Energy Co (CSUAY) SWOT Analysis / TOWS Matrix / MBA Resources
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for China Shenhua Energy Co (United States)
Based on various researches at Oak Spring University , China Shenhua Energy Co is operating in a macro-environment that has been destablized by – technology disruption, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, increasing transportation and logistics costs, central banks are concerned over increasing inflation,
customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of China Shenhua Energy Co
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that China Shenhua Energy Co can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the China Shenhua Energy Co, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which China Shenhua Energy Co 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 China Shenhua Energy Co can be done for the following purposes –
1. Strategic planning of China Shenhua Energy Co
2. Improving business portfolio management of China Shenhua Energy Co
3. Assessing feasibility of the new initiative in United States
4. Making a sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of China Shenhua Energy Co
Strengths of China Shenhua Energy Co | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of China Shenhua Energy Co are -
Low bargaining power of suppliers
– Suppliers of China Shenhua Energy Co in the sector have low bargaining power. China Shenhua Energy Co has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps China Shenhua Energy Co to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in
– China Shenhua Energy Co is one of the leading players in the industry in United States. Over the years it has not only transformed the business landscape in the industry in United States but also across the existing markets. The ability to lead change has enabled China Shenhua Energy Co in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– China Shenhua Energy Co is one of the leading players in the 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.
High switching costs
– The high switching costs that China Shenhua Energy Co 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.
High brand equity
– China Shenhua Energy Co has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled China Shenhua Energy Co to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management in the industry
– China Shenhua Energy Co 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 China Shenhua Energy Co
– The covid-19 pandemic has put organizational resilience at the centre of everthing China Shenhua Energy Co does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– China Shenhua Energy Co has one of the best training and development program in 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.
Operational resilience
– The operational resilience strategy of China Shenhua Energy Co comprises – understanding the underlying the factors in the 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.
Sustainable margins compare to other players in industry
– China Shenhua Energy Co has clearly differentiated products in the market place. This has enabled China Shenhua Energy Co to fetch slight price premium compare to the competitors in the industry. The sustainable margins have also helped China Shenhua Energy Co to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the China Shenhua Energy Co 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.
Superior customer experience
– The customer experience strategy of China Shenhua Energy Co in industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses of China Shenhua Energy Co | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of China Shenhua Energy Co are -
Need for greater diversity
– China Shenhua Energy Co 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.
Interest costs
– Compare to the competition, China Shenhua Energy Co 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.
Increasing silos among functional specialists
– The organizational structure of China Shenhua Energy Co is dominated by functional specialists. It is not different from other players in the industry, but China Shenhua Energy Co needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help China Shenhua Energy Co to focus more on services in the industry rather than just following the product oriented approach.
High dependence on China Shenhua Energy Co ‘s star products
– The top 2 products and services of China Shenhua Energy Co still accounts for major business revenue. This dependence on star products in industry has resulted into insufficient focus on developing new products, even though China Shenhua Energy Co has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the industry, China Shenhua Energy Co 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.
High operating costs
– Compare to the competitors, China Shenhua Energy Co has high operating costs in the industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract China Shenhua Energy Co lucrative customers.
High bargaining power of channel partners in industry
– because of the regulatory requirements in United States, China Shenhua Energy Co 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 industry.
High cash cycle compare to competitors
China Shenhua Energy Co has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Lack of clear differentiation of China Shenhua Energy Co products
– To increase the profitability and margins on the products, China Shenhua Energy Co needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As China Shenhua Energy Co is one of the leading players in the industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Ability to respond to the competition
– As the decision making is very deliberative at China Shenhua Energy Co, in the dynamic environment of industry it has struggled to respond to the nimble upstart competition. China Shenhua Energy Co has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
China Shenhua Energy Co Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of China Shenhua Energy Co are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects China Shenhua Energy Co can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– China Shenhua Energy Co has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in sector. This continuous investment in analytics has enabled China Shenhua Energy Co to build a competitive advantage using analytics. The analytics driven competitive advantage can help China Shenhua Energy Co to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, China Shenhua Energy Co 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
– China Shenhua Energy Co can improve the customer journey of consumers in the 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for China Shenhua Energy Co 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 China Shenhua Energy Co to hire the very best people irrespective of their geographical location.
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 China Shenhua Energy Co 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, China Shenhua Energy Co 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 China Shenhua Energy Co to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at China Shenhua Energy Co 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 industry.
Creating value in data economy
– The success of analytics program of China Shenhua Energy Co has opened avenues for new revenue streams for the organization in industry. This can help China Shenhua Energy Co to build a more holistic ecosystem for China Shenhua Energy Co products in the industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in industry, but it has also influenced the consumer preferences. China Shenhua Energy Co can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, China Shenhua Energy Co can use these opportunities to build new business models that can help the communities that China Shenhua Energy Co operates in. Secondly it can use opportunities from government spending in sector.
Loyalty marketing
– China Shenhua Energy Co 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for China Shenhua Energy Co in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the industry, and it will provide faster access to the consumers.
Threats China Shenhua Energy Co External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of China Shenhua Energy Co are -
Technology acceleration in Forth Industrial Revolution
– China Shenhua Energy Co has witnessed rapid integration of technology during Covid-19 in the industry. As one of the leading players in the industry, China Shenhua Energy Co needs to keep up with the evolution of technology in the 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 wage structure of China Shenhua Energy Co
– 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 China Shenhua Energy Co.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, China Shenhua Energy Co 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 China Shenhua Energy Co 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. China Shenhua Energy Co 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.
High dependence on third party suppliers
– China Shenhua Energy Co 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.
Stagnating economy with rate increase
– China Shenhua Energy Co 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 industry.
Consumer confidence and its impact on China Shenhua Energy Co 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 industry and other sectors.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to industry are lowering. It can presents China Shenhua Energy Co with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 China Shenhua Energy Co business can come under increasing regulations regarding data privacy, data security, etc.
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. China Shenhua Energy Co needs to understand the core reasons impacting the industry. This will help it in building a better workplace.
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 China Shenhua Energy Co.
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 China Shenhua Energy Co in the sector and impact the bottomline of the organization.
Environmental challenges
– China Shenhua Energy Co 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. China Shenhua Energy Co can take advantage of this fund but it will also bring new competitors in the industry.
Weighted SWOT Analysis of China Shenhua Energy Co Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at China Shenhua Energy Co 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 China Shenhua Energy Co 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 China Shenhua Energy Co 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 China Shenhua Energy Co 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 China Shenhua Energy Co needs to make to build a sustainable competitive advantage.
