Dongfeng Motor Group Co (DNFGY) SWOT Analysis / TOWS Matrix / MBA Resources
Auto & Truck Manufacturers
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Dongfeng Motor Group Co (United States)
Based on various researches at Oak Spring University , Dongfeng Motor Group Co is operating in a macro-environment that has been destablized by – there is backlash against globalization, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google,
geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Dongfeng Motor Group Co
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Dongfeng Motor Group Co can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Dongfeng Motor Group Co, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Dongfeng Motor Group 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 Dongfeng Motor Group Co can be done for the following purposes –
1. Strategic planning of Dongfeng Motor Group Co
2. Improving business portfolio management of Dongfeng Motor Group Co
3. Assessing feasibility of the new initiative in United States
4. Making a Auto & Truck Manufacturers sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Dongfeng Motor Group Co
Strengths of Dongfeng Motor Group Co | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Dongfeng Motor Group Co are -
Cross disciplinary teams
– Horizontal connected teams at the Dongfeng Motor Group 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.
Operational resilience
– The operational resilience strategy of Dongfeng Motor Group Co comprises – understanding the underlying the factors in the Auto & Truck Manufacturers 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.
High switching costs
– The high switching costs that Dongfeng Motor Group 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.
Training and development
– Dongfeng Motor Group Co has one of the best training and development program in Consumer 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.
Ability to lead change in Auto & Truck Manufacturers
– Dongfeng Motor Group Co is one of the leading players in the Auto & Truck Manufacturers industry in United States. Over the years it has not only transformed the business landscape in the Auto & Truck Manufacturers industry in United States but also across the existing markets. The ability to lead change has enabled Dongfeng Motor Group 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
– Dongfeng Motor Group Co is one of the leading players in the Auto & Truck Manufacturers 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.
Sustainable margins compare to other players in Auto & Truck Manufacturers industry
– Dongfeng Motor Group Co has clearly differentiated products in the market place. This has enabled Dongfeng Motor Group Co to fetch slight price premium compare to the competitors in the Auto & Truck Manufacturers industry. The sustainable margins have also helped Dongfeng Motor Group Co to invest into research and development (R&D) and innovation.
Innovation driven organization
– Dongfeng Motor Group Co is one of the most innovative firm in Auto & Truck Manufacturers sector.
Learning organization
- Dongfeng Motor Group Co 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 Dongfeng Motor Group Co is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Dongfeng Motor Group Co emphasize – knowledge, initiative, and innovation.
Strong track record of project management in the Auto & Truck Manufacturers industry
– Dongfeng Motor Group 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.
Superior customer experience
– The customer experience strategy of Dongfeng Motor Group Co in Auto & Truck Manufacturers industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Auto & Truck Manufacturers industry
- digital transformation varies from industry to industry. For Dongfeng Motor Group Co digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Dongfeng Motor Group Co 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.
Weaknesses of Dongfeng Motor Group Co | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Dongfeng Motor Group Co are -
Increasing silos among functional specialists
– The organizational structure of Dongfeng Motor Group Co is dominated by functional specialists. It is not different from other players in the Auto & Truck Manufacturers industry, but Dongfeng Motor Group Co needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Dongfeng Motor Group Co to focus more on services in the Auto & Truck Manufacturers industry rather than just following the product oriented approach.
Products dominated business model
– Even though Dongfeng Motor Group Co has some of the most successful models in the Auto & Truck Manufacturers industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Dongfeng Motor Group Co should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Dongfeng Motor Group Co products
– To increase the profitability and margins on the products, Dongfeng Motor Group Co needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative at Dongfeng Motor Group Co, in the dynamic environment of Auto & Truck Manufacturers industry it has struggled to respond to the nimble upstart competition. Dongfeng Motor Group Co has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, Dongfeng Motor Group Co has high operating costs in the Auto & Truck Manufacturers industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Dongfeng Motor Group Co lucrative customers.
Compensation and incentives
– The revenue per employee of Dongfeng Motor Group Co is just above the Auto & Truck Manufacturers 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.
Employees’ less understanding of Dongfeng Motor Group Co strategy
– From the outside it seems that the employees of Dongfeng Motor Group Co 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.
High cash cycle compare to competitors
Dongfeng Motor Group Co has a high cash cycle compare to other players in the Auto & Truck Manufacturers 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 bargaining power of channel partners in Auto & Truck Manufacturers industry
– because of the regulatory requirements in United States, Dongfeng Motor Group 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 Auto & Truck Manufacturers industry.
Need for greater diversity
– Dongfeng Motor Group 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.
Workers concerns about automation
– As automation is fast increasing in the Auto & Truck Manufacturers industry, Dongfeng Motor Group 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.
Dongfeng Motor Group Co Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Dongfeng Motor Group Co are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Dongfeng Motor Group Co can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Auto & Truck Manufacturers industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Dongfeng Motor Group Co 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. Dongfeng Motor Group Co 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Dongfeng Motor Group 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Dongfeng Motor Group 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 Auto & Truck Manufacturers industry, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Dongfeng Motor Group Co has opened avenues for new revenue streams for the organization in Auto & Truck Manufacturers industry. This can help Dongfeng Motor Group Co to build a more holistic ecosystem for Dongfeng Motor Group Co products in the Auto & Truck Manufacturers industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Dongfeng Motor Group 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 Dongfeng Motor Group Co to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Dongfeng Motor Group Co has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Auto & Truck Manufacturers sector. This continuous investment in analytics has enabled Dongfeng Motor Group Co to build a competitive advantage using analytics. The analytics driven competitive advantage can help Dongfeng Motor Group Co to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Dongfeng Motor Group Co 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.
Building a culture of innovation
– managers at Dongfeng Motor Group 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 Auto & Truck Manufacturers industry.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Dongfeng Motor Group Co is facing challenges because of the dominance of functional experts in the organization. Dongfeng Motor Group Co can utilize new technology in the field of Auto & Truck Manufacturers industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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. Dongfeng Motor Group Co can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Dongfeng Motor Group Co to increase its market reach. Dongfeng Motor Group Co 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 Auto & Truck Manufacturers industry, but it has also influenced the consumer preferences. Dongfeng Motor Group Co can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Dongfeng Motor Group Co External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Dongfeng Motor Group Co are -
Shortening product life cycle
– it is one of the major threat that Dongfeng Motor Group Co is facing in Auto & Truck Manufacturers sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Auto & Truck Manufacturers industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Dongfeng Motor Group Co 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 Dongfeng Motor Group 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 Auto & Truck Manufacturers industry and other sectors.
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 Dongfeng Motor Group 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 Dongfeng Motor Group Co in the Auto & Truck Manufacturers sector and impact the bottomline of the organization.
Environmental challenges
– Dongfeng Motor Group 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. Dongfeng Motor Group Co can take advantage of this fund but it will also bring new competitors in the Auto & Truck Manufacturers industry.
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. Dongfeng Motor Group Co needs to understand the core reasons impacting the Auto & Truck Manufacturers industry. This will help it in building a better workplace.
Increasing wage structure of Dongfeng Motor Group 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 Dongfeng Motor Group Co.
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. Dongfeng Motor Group 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.
Technology acceleration in Forth Industrial Revolution
– Dongfeng Motor Group Co has witnessed rapid integration of technology during Covid-19 in the Auto & Truck Manufacturers industry. As one of the leading players in the industry, Dongfeng Motor Group Co needs to keep up with the evolution of technology in the Auto & Truck Manufacturers 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.
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 Dongfeng Motor Group Co business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Dongfeng Motor Group Co 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 Auto & Truck Manufacturers industry regulations.
High dependence on third party suppliers
– Dongfeng Motor Group 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.
Weighted SWOT Analysis of Dongfeng Motor Group Co Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Dongfeng Motor Group 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 Dongfeng Motor Group 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 Dongfeng Motor Group 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 Dongfeng Motor Group 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 Dongfeng Motor Group Co needs to make to build a sustainable competitive advantage.
