China Digital TV (STVVY) SWOT Analysis / TOWS Matrix / MBA Resources
Broadcasting & Cable TV
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for China Digital TV (United States)
Based on various researches at Oak Spring University , China Digital TV is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, supply chains are disrupted by pandemic , wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion,
technology disruption, challanges to central banks by blockchain based private currencies, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that China Digital TV can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the China Digital TV, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which China Digital TV operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of China Digital TV can be done for the following purposes –
1. Strategic planning of China Digital TV
2. Improving business portfolio management of China Digital TV
3. Assessing feasibility of the new initiative in United States
4. Making a Broadcasting & Cable TV sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of China Digital TV
Strengths of China Digital TV | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of China Digital TV are -
Effective Research and Development (R&D)
– China Digital TV has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – China Digital TV staying ahead in the Broadcasting & Cable TV industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– China Digital TV has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled China Digital TV to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of China Digital TV
– The covid-19 pandemic has put organizational resilience at the centre of everthing China Digital TV does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- China Digital TV 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 China Digital TV is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at China Digital TV emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– China Digital TV has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. China Digital TV 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.
Highly skilled collaborators
– China Digital TV has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Broadcasting & Cable TV industry. Secondly the value chain collaborators of China Digital TV have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of China Digital TV in the Services sector have low bargaining power. China Digital TV has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps China Digital TV to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy of China Digital TV comprises – understanding the underlying the factors in the Broadcasting & Cable TV 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.
Digital Transformation in Broadcasting & Cable TV industry
- digital transformation varies from industry to industry. For China Digital TV digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. China Digital TV 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
– China Digital TV 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.
Innovation driven organization
– China Digital TV is one of the most innovative firm in Broadcasting & Cable TV sector.
Superior customer experience
– The customer experience strategy of China Digital TV in Broadcasting & Cable TV industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses of China Digital TV | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of China Digital TV are -
High cash cycle compare to competitors
China Digital TV has a high cash cycle compare to other players in the Broadcasting & Cable TV industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Compensation and incentives
– The revenue per employee of China Digital TV is just above the Broadcasting & Cable TV 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.
High dependence on China Digital TV ‘s star products
– The top 2 products and services of China Digital TV still accounts for major business revenue. This dependence on star products in Broadcasting & Cable TV industry has resulted into insufficient focus on developing new products, even though China Digital TV has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As China Digital TV is one of the leading players in the Broadcasting & Cable TV industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Broadcasting & Cable TV industry in last five years.
High operating costs
– Compare to the competitors, China Digital TV has high operating costs in the Broadcasting & Cable TV industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract China Digital TV lucrative customers.
Interest costs
– Compare to the competition, China Digital TV 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.
Employees’ less understanding of China Digital TV strategy
– From the outside it seems that the employees of China Digital TV 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 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 China Digital TV supply chain. Even after few cautionary changes, China Digital TV is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left China Digital TV vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative at China Digital TV, in the dynamic environment of Broadcasting & Cable TV industry it has struggled to respond to the nimble upstart competition. China Digital TV has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, China Digital TV has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Broadcasting & Cable TV industry over the last five years. China Digital TV 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.
High bargaining power of channel partners in Broadcasting & Cable TV industry
– because of the regulatory requirements in United States, China Digital TV 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 Broadcasting & Cable TV industry.
China Digital TV Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of China Digital TV are -
Creating value in data economy
– The success of analytics program of China Digital TV has opened avenues for new revenue streams for the organization in Broadcasting & Cable TV industry. This can help China Digital TV to build a more holistic ecosystem for China Digital TV products in the Broadcasting & Cable TV industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Broadcasting & Cable TV industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. China Digital TV 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. China Digital TV 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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help China Digital TV 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.
Better consumer reach
– The expansion of the 5G network will help China Digital TV to increase its market reach. China Digital TV 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.
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. China Digital TV can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for China Digital TV 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.
Building a culture of innovation
– managers at China Digital TV 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 Broadcasting & Cable TV industry.
Developing new processes and practices
– China Digital TV can develop new processes and procedures in Broadcasting & Cable TV 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects China Digital TV can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– China Digital TV has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Broadcasting & Cable TV sector. This continuous investment in analytics has enabled China Digital TV to build a competitive advantage using analytics. The analytics driven competitive advantage can help China Digital TV to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, China Digital TV can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Buying journey improvements
– China Digital TV can improve the customer journey of consumers in the Broadcasting & Cable TV 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, China Digital TV can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help China Digital TV to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats China Digital TV External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of China Digital TV are -
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. China Digital TV needs to understand the core reasons impacting the Broadcasting & Cable TV industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– China Digital TV has witnessed rapid integration of technology during Covid-19 in the Broadcasting & Cable TV industry. As one of the leading players in the industry, China Digital TV needs to keep up with the evolution of technology in the Broadcasting & Cable TV 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.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of China Digital TV.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for China Digital TV in Broadcasting & Cable TV industry. The Broadcasting & Cable TV 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Broadcasting & Cable TV industry are lowering. It can presents China Digital TV with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Broadcasting & Cable TV sector.
Stagnating economy with rate increase
– China Digital TV 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 Broadcasting & Cable TV industry.
Regulatory challenges
– China Digital TV 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 Broadcasting & Cable TV industry regulations.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for China Digital TV in the Broadcasting & Cable TV sector and impact the bottomline of the organization.
Increasing wage structure of China Digital TV
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of China Digital TV.
Easy access to finance
– Easy access to finance in Broadcasting & Cable TV industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. China Digital TV can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, China Digital TV can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate China Digital TV prominent markets.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, China Digital TV may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Broadcasting & Cable TV sector.
Weighted SWOT Analysis of China Digital TV Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at China Digital TV needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of China Digital TV is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of China Digital TV is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of China Digital TV to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that China Digital TV needs to make to build a sustainable competitive advantage.