Based on various researches at Oak Spring University , Xiamen Lutong Travel is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, geopolitical disruptions, wage bills are increasing, there is backlash against globalization,
increasing commodity prices, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Xiamen Lutong Travel
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Xiamen Lutong Travel can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Xiamen Lutong Travel, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Xiamen Lutong Travel 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 Xiamen Lutong Travel can be done for the following purposes –
1. Strategic planning of Xiamen Lutong Travel
2. Improving business portfolio management of Xiamen Lutong Travel
3. Assessing feasibility of the new initiative in United States
4. Making a Communications Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Xiamen Lutong Travel
Strengths of Xiamen Lutong Travel | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Xiamen Lutong Travel are -
Digital Transformation in Communications Services industry
- digital transformation varies from industry to industry. For Xiamen Lutong Travel digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Xiamen Lutong Travel 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.
Training and development
– Xiamen Lutong Travel 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.
Successful track record of launching new products
– Xiamen Lutong Travel has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Xiamen Lutong Travel 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.
Ability to lead change in Communications Services
– Xiamen Lutong Travel is one of the leading players in the Communications Services industry in United States. Over the years it has not only transformed the business landscape in the Communications Services industry in United States but also across the existing markets. The ability to lead change has enabled Xiamen Lutong Travel 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)
– Xiamen Lutong Travel has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Xiamen Lutong Travel staying ahead in the Communications Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Xiamen Lutong Travel 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 Xiamen Lutong Travel is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Xiamen Lutong Travel emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Xiamen Lutong Travel in the Services sector have low bargaining power. Xiamen Lutong Travel has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Xiamen Lutong Travel to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Xiamen Lutong Travel has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Xiamen Lutong Travel to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management in the Communications Services industry
– Xiamen Lutong Travel 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 Xiamen Lutong Travel
– The covid-19 pandemic has put organizational resilience at the centre of everthing Xiamen Lutong Travel does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Xiamen Lutong Travel in Communications Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Xiamen Lutong Travel is present in almost all the verticals within the Communications Services industry. This has provided Xiamen Lutong Travel 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.
Weaknesses of Xiamen Lutong Travel | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Xiamen Lutong Travel are -
Capital Spending Reduction
– Even during the low interest decade, Xiamen Lutong Travel 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 Communications Services industry using digital technology.
High operating costs
– Compare to the competitors, Xiamen Lutong Travel has high operating costs in the Communications Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Xiamen Lutong Travel lucrative customers.
Compensation and incentives
– The revenue per employee of Xiamen Lutong Travel is just above the Communications Services 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.
Workers concerns about automation
– As automation is fast increasing in the Communications Services industry, Xiamen Lutong Travel 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.
Skills based hiring in Communications Services industry
– The stress on hiring functional specialists at Xiamen Lutong Travel 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.
Products dominated business model
– Even though Xiamen Lutong Travel has some of the most successful models in the Communications Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Xiamen Lutong Travel should strive to include more intangible value offerings along with its core products and services.
High dependence on Xiamen Lutong Travel ‘s star products
– The top 2 products and services of Xiamen Lutong Travel still accounts for major business revenue. This dependence on star products in Communications Services industry has resulted into insufficient focus on developing new products, even though Xiamen Lutong Travel has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Xiamen Lutong Travel is one of the leading players in the Communications Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Communications Services industry in last five years.
No frontier risks strategy
– From the 10K / annual statement of Xiamen Lutong Travel, it seems that company is thinking out the frontier risks that can impact Communications Services 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 Xiamen Lutong Travel is dominated by functional specialists. It is not different from other players in the Communications Services industry, but Xiamen Lutong Travel needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Xiamen Lutong Travel to focus more on services in the Communications Services industry rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Xiamen Lutong Travel is slow explore the new channels of communication. These new channels of communication can help Xiamen Lutong Travel to provide better information regarding Communications Services products and services. It can also build an online community to further reach out to potential customers.
Xiamen Lutong Travel Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Xiamen Lutong Travel are -
Buying journey improvements
– Xiamen Lutong Travel can improve the customer journey of consumers in the Communications Services 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.
Developing new processes and practices
– Xiamen Lutong Travel can develop new processes and procedures in Communications Services 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Xiamen Lutong Travel 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 Xiamen Lutong Travel to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Xiamen Lutong Travel to increase its market reach. Xiamen Lutong Travel 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Xiamen Lutong Travel can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Use of Bitcoin and other crypto currencies for transactions in Communications Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Xiamen Lutong Travel in the Communications Services industry. Now Xiamen Lutong Travel can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Xiamen Lutong Travel is facing challenges because of the dominance of functional experts in the organization. Xiamen Lutong Travel can utilize new technology in the field of Communications Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Using analytics as competitive advantage
– Xiamen Lutong Travel has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Communications Services sector. This continuous investment in analytics has enabled Xiamen Lutong Travel to build a competitive advantage using analytics. The analytics driven competitive advantage can help Xiamen Lutong Travel to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Communications Services industry, but it has also influenced the consumer preferences. Xiamen Lutong Travel can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Xiamen Lutong Travel 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.
Creating value in data economy
– The success of analytics program of Xiamen Lutong Travel has opened avenues for new revenue streams for the organization in Communications Services industry. This can help Xiamen Lutong Travel to build a more holistic ecosystem for Xiamen Lutong Travel products in the Communications Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
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 Xiamen Lutong Travel 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Communications Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Xiamen Lutong Travel 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. Xiamen Lutong Travel 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.
Threats Xiamen Lutong Travel External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Xiamen Lutong Travel are -
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 Xiamen Lutong Travel.
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. Xiamen Lutong Travel needs to understand the core reasons impacting the Communications Services industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Xiamen Lutong Travel 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 Communications Services industry.
Easy access to finance
– Easy access to finance in Communications Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Xiamen Lutong Travel 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 Xiamen Lutong Travel 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 Communications Services industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Xiamen Lutong Travel may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Communications Services sector.
Regulatory challenges
– Xiamen Lutong Travel 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 Communications Services industry regulations.
Increasing wage structure of Xiamen Lutong Travel
– 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 Xiamen Lutong Travel.
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. Xiamen Lutong Travel 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.
Shortening product life cycle
– it is one of the major threat that Xiamen Lutong Travel is facing in Communications Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Xiamen Lutong Travel 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 Xiamen Lutong Travel prominent markets.
Environmental challenges
– Xiamen Lutong Travel 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. Xiamen Lutong Travel can take advantage of this fund but it will also bring new competitors in the Communications Services industry.
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 Xiamen Lutong Travel in the Communications Services sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Xiamen Lutong Travel Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Xiamen Lutong Travel 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 Xiamen Lutong Travel 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 Xiamen Lutong Travel 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 Xiamen Lutong Travel 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 Xiamen Lutong Travel needs to make to build a sustainable competitive advantage.
