SWOT Analysis / TOWS Matrix for Guangshen Railway (United States)
Based on various researches at Oak Spring University , Guangshen Railway is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, wage bills are increasing, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices,
banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, etc
Introduction to SWOT Analysis of Guangshen Railway
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Guangshen Railway can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Guangshen Railway, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Guangshen Railway 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 Guangshen Railway can be done for the following purposes –
1. Strategic planning of Guangshen Railway
2. Improving business portfolio management of Guangshen Railway
3. Assessing feasibility of the new initiative in United States
4. Making a Railroads sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Guangshen Railway
Strengths of Guangshen Railway | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Guangshen Railway are -
Digital Transformation in Railroads industry
- digital transformation varies from industry to industry. For Guangshen Railway digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Guangshen Railway 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.
High brand equity
– Guangshen Railway has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Guangshen Railway to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Railroads industry
– Guangshen Railway has clearly differentiated products in the market place. This has enabled Guangshen Railway to fetch slight price premium compare to the competitors in the Railroads industry. The sustainable margins have also helped Guangshen Railway to invest into research and development (R&D) and innovation.
Learning organization
- Guangshen Railway 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 Guangshen Railway is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Guangshen Railway emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Guangshen Railway is one of the leading players in the Railroads 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.
Ability to lead change in Railroads
– Guangshen Railway is one of the leading players in the Railroads industry in United States. Over the years it has not only transformed the business landscape in the Railroads industry in United States but also across the existing markets. The ability to lead change has enabled Guangshen Railway in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Guangshen Railway in the Transportation sector have low bargaining power. Guangshen Railway has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Guangshen Railway to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Guangshen Railway is one of the most innovative firm in Railroads sector.
Diverse revenue streams
– Guangshen Railway is present in almost all the verticals within the Railroads industry. This has provided Guangshen Railway 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.
Cross disciplinary teams
– Horizontal connected teams at the Guangshen Railway 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.
High switching costs
– The high switching costs that Guangshen Railway 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.
Analytics focus
– Guangshen Railway 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 Railroads 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.
Weaknesses of Guangshen Railway | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Guangshen Railway are -
Ability to respond to the competition
– As the decision making is very deliberative at Guangshen Railway, in the dynamic environment of Railroads industry it has struggled to respond to the nimble upstart competition. Guangshen Railway 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, Guangshen Railway has high operating costs in the Railroads industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Guangshen Railway lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the Railroads industry, Guangshen Railway 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.
Increasing silos among functional specialists
– The organizational structure of Guangshen Railway is dominated by functional specialists. It is not different from other players in the Railroads industry, but Guangshen Railway needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Guangshen Railway to focus more on services in the Railroads industry rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Guangshen Railway has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Railroads industry over the last five years. Guangshen Railway 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.
No frontier risks strategy
– From the 10K / annual statement of Guangshen Railway, it seems that company is thinking out the frontier risks that can impact Railroads 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.
Lack of clear differentiation of Guangshen Railway products
– To increase the profitability and margins on the products, Guangshen Railway needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on Guangshen Railway ‘s star products
– The top 2 products and services of Guangshen Railway still accounts for major business revenue. This dependence on star products in Railroads industry has resulted into insufficient focus on developing new products, even though Guangshen Railway has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Guangshen Railway 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.
Skills based hiring in Railroads industry
– The stress on hiring functional specialists at Guangshen Railway 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.
Aligning sales with marketing
– From the outside it seems that Guangshen Railway needs to have more collaboration between its sales team and marketing team. Sales professionals in the Railroads industry have deep experience in developing customer relationships. Marketing department at Guangshen Railway can leverage the sales team experience to cultivate customer relationships as Guangshen Railway is planning to shift buying processes online.
Guangshen Railway Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Guangshen Railway are -
Developing new processes and practices
– Guangshen Railway can develop new processes and procedures in Railroads 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Guangshen Railway can use these opportunities to build new business models that can help the communities that Guangshen Railway operates in. Secondly it can use opportunities from government spending in Railroads sector.
Loyalty marketing
– Guangshen Railway 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Guangshen Railway 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 Guangshen Railway to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Guangshen Railway has opened avenues for new revenue streams for the organization in Railroads industry. This can help Guangshen Railway to build a more holistic ecosystem for Guangshen Railway products in the Railroads industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Guangshen Railway can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Guangshen Railway is facing challenges because of the dominance of functional experts in the organization. Guangshen Railway can utilize new technology in the field of Railroads industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Railroads industry, but it has also influenced the consumer preferences. Guangshen Railway can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Guangshen Railway can improve the customer journey of consumers in the Railroads 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 Guangshen Railway 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 Guangshen Railway to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Guangshen Railway 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, Guangshen Railway 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 Guangshen Railway in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Railroads industry, and it will provide faster access to the consumers.
Threats Guangshen Railway External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Guangshen Railway are -
Environmental challenges
– Guangshen Railway 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. Guangshen Railway can take advantage of this fund but it will also bring new competitors in the Railroads industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Railroads industry are lowering. It can presents Guangshen Railway with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Railroads sector.
Stagnating economy with rate increase
– Guangshen Railway 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 Railroads industry.
Technology acceleration in Forth Industrial Revolution
– Guangshen Railway has witnessed rapid integration of technology during Covid-19 in the Railroads industry. As one of the leading players in the industry, Guangshen Railway needs to keep up with the evolution of technology in the Railroads 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.
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 Guangshen Railway in the Railroads sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Guangshen Railway in Railroads industry. The Railroads 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.
Increasing wage structure of Guangshen Railway
– 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 Guangshen Railway.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Guangshen Railway 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 Guangshen Railway prominent markets.
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 Guangshen Railway business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Guangshen Railway 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 Railroads industry and other sectors.
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. Guangshen Railway 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Guangshen Railway may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Railroads sector.
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.
Weighted SWOT Analysis of Guangshen Railway Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Guangshen Railway 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 Guangshen Railway 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 Guangshen Railway 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 Guangshen Railway 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 Guangshen Railway needs to make to build a sustainable competitive advantage.
