Kingold (KGJI) SWOT Analysis / TOWS Matrix / MBA Resources
Misc. Fabricated Products
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Kingold (United States)
Based on various researches at Oak Spring University , Kingold is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , technology disruption, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Kingold can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kingold, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kingold 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 Kingold can be done for the following purposes –
1. Strategic planning of Kingold
2. Improving business portfolio management of Kingold
3. Assessing feasibility of the new initiative in United States
4. Making a Misc. Fabricated Products sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Kingold
Strengths of Kingold | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kingold are -
Training and development
– Kingold has one of the best training and development program in Basic Materials 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.
Digital Transformation in Misc. Fabricated Products industry
- digital transformation varies from industry to industry. For Kingold digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Kingold 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.
Low bargaining power of suppliers
– Suppliers of Kingold in the Basic Materials sector have low bargaining power. Kingold has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Kingold to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Kingold 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.
Strong track record of project management in the Misc. Fabricated Products industry
– Kingold is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Kingold 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.
Sustainable margins compare to other players in Misc. Fabricated Products industry
– Kingold has clearly differentiated products in the market place. This has enabled Kingold to fetch slight price premium compare to the competitors in the Misc. Fabricated Products industry. The sustainable margins have also helped Kingold to invest into research and development (R&D) and innovation.
Ability to lead change in Misc. Fabricated Products
– Kingold is one of the leading players in the Misc. Fabricated Products industry in United States. Over the years it has not only transformed the business landscape in the Misc. Fabricated Products industry in United States but also across the existing markets. The ability to lead change has enabled Kingold 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)
– Kingold has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Kingold staying ahead in the Misc. Fabricated Products industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Kingold has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Kingold has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Analytics focus
– Kingold 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 Misc. Fabricated Products 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.
Innovation driven organization
– Kingold is one of the most innovative firm in Misc. Fabricated Products sector.
Weaknesses of Kingold | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kingold are -
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 Kingold supply chain. Even after few cautionary changes, Kingold is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Kingold vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners in Misc. Fabricated Products industry
– because of the regulatory requirements in United States, Kingold 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 Misc. Fabricated Products industry.
Skills based hiring in Misc. Fabricated Products industry
– The stress on hiring functional specialists at Kingold 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.
Low market penetration in new markets
– Outside its home market of United States, Kingold needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– From the outside it seems that Kingold needs to have more collaboration between its sales team and marketing team. Sales professionals in the Misc. Fabricated Products industry have deep experience in developing customer relationships. Marketing department at Kingold can leverage the sales team experience to cultivate customer relationships as Kingold is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Kingold 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 Misc. Fabricated Products industry using digital technology.
High cash cycle compare to competitors
Kingold has a high cash cycle compare to other players in the Misc. Fabricated Products industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow to strategic competitive environment developments
– As Kingold is one of the leading players in the Misc. Fabricated Products industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Misc. Fabricated Products industry in last five years.
No frontier risks strategy
– From the 10K / annual statement of Kingold, it seems that company is thinking out the frontier risks that can impact Misc. Fabricated Products 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.
Increasing silos among functional specialists
– The organizational structure of Kingold is dominated by functional specialists. It is not different from other players in the Misc. Fabricated Products industry, but Kingold needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Kingold to focus more on services in the Misc. Fabricated Products industry rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Kingold has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Misc. Fabricated Products industry over the last five years. Kingold 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.
Kingold Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Kingold are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Kingold can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Kingold to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Manufacturing automation
– Kingold can use the latest technology developments to improve its manufacturing and designing process in Misc. Fabricated Products 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.
Using analytics as competitive advantage
– Kingold has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Misc. Fabricated Products sector. This continuous investment in analytics has enabled Kingold to build a competitive advantage using analytics. The analytics driven competitive advantage can help Kingold to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Kingold can use these opportunities to build new business models that can help the communities that Kingold operates in. Secondly it can use opportunities from government spending in Misc. Fabricated Products sector.
Loyalty marketing
– Kingold 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.
Buying journey improvements
– Kingold can improve the customer journey of consumers in the Misc. Fabricated Products 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Kingold in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Misc. Fabricated Products industry, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Kingold has opened avenues for new revenue streams for the organization in Misc. Fabricated Products industry. This can help Kingold to build a more holistic ecosystem for Kingold products in the Misc. Fabricated Products industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Kingold is facing challenges because of the dominance of functional experts in the organization. Kingold can utilize new technology in the field of Misc. Fabricated Products 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. Kingold can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Misc. Fabricated Products industry, but it has also influenced the consumer preferences. Kingold can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Kingold 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.
Threats Kingold External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Kingold are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Kingold in Misc. Fabricated Products industry. The Misc. Fabricated Products 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.
Stagnating economy with rate increase
– Kingold 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 Misc. Fabricated Products industry.
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 Kingold.
Regulatory challenges
– Kingold 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 Misc. Fabricated Products industry regulations.
Technology acceleration in Forth Industrial Revolution
– Kingold has witnessed rapid integration of technology during Covid-19 in the Misc. Fabricated Products industry. As one of the leading players in the industry, Kingold needs to keep up with the evolution of technology in the Misc. Fabricated Products 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 Kingold is facing in Misc. Fabricated Products sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Kingold 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 Misc. Fabricated Products industry and other sectors.
Increasing wage structure of Kingold
– 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 Kingold.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Misc. Fabricated Products industry are lowering. It can presents Kingold with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Misc. Fabricated Products sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kingold 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 Kingold prominent markets.
Environmental challenges
– Kingold 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. Kingold can take advantage of this fund but it will also bring new competitors in the Misc. Fabricated Products industry.
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 Kingold business can come under increasing regulations regarding data privacy, data security, etc.
Easy access to finance
– Easy access to finance in Misc. Fabricated Products industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Kingold can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Kingold Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Kingold 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 Kingold 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 Kingold 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 Kingold 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 Kingold needs to make to build a sustainable competitive advantage.