SWOT Analysis / TOWS Matrix for Anhui Conch Cement (China)
Based on various researches at Oak Spring University , Anhui Conch Cement is operating in a macro-environment that has been destablized by – geopolitical disruptions, wage bills are increasing, technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Anhui Conch Cement
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Anhui Conch Cement can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Anhui Conch Cement, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Anhui Conch Cement 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 Anhui Conch Cement can be done for the following purposes –
1. Strategic planning of Anhui Conch Cement
2. Improving business portfolio management of Anhui Conch Cement
3. Assessing feasibility of the new initiative in China
4. Making a Construction - Raw Materials sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Anhui Conch Cement
Strengths of Anhui Conch Cement | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Anhui Conch Cement are -
Diverse revenue streams
– Anhui Conch Cement is present in almost all the verticals within the Construction - Raw Materials industry. This has provided Anhui Conch Cement 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.
Sustainable margins compare to other players in Construction - Raw Materials industry
– Anhui Conch Cement has clearly differentiated products in the market place. This has enabled Anhui Conch Cement to fetch slight price premium compare to the competitors in the Construction - Raw Materials industry. The sustainable margins have also helped Anhui Conch Cement to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Anhui Conch Cement in the Capital Goods sector have low bargaining power. Anhui Conch Cement has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Anhui Conch Cement to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Anhui Conch Cement 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 Construction - Raw Materials industry. The technology infrastructure of China 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.
High switching costs
– The high switching costs that Anhui Conch Cement 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.
Strong track record of project management in the Construction - Raw Materials industry
– Anhui Conch Cement is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Anhui Conch Cement is one of the most innovative firm in Construction - Raw Materials sector.
Superior customer experience
– The customer experience strategy of Anhui Conch Cement in Construction - Raw Materials industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Anhui Conch Cement has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Anhui Conch Cement to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Anhui Conch Cement has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Construction - Raw Materials industry. Secondly the value chain collaborators of Anhui Conch Cement have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Anhui Conch Cement 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.
Organizational Resilience of Anhui Conch Cement
– The covid-19 pandemic has put organizational resilience at the centre of everthing Anhui Conch Cement does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses of Anhui Conch Cement | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Anhui Conch Cement are -
High operating costs
– Compare to the competitors, Anhui Conch Cement has high operating costs in the Construction - Raw Materials industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Anhui Conch Cement lucrative customers.
Skills based hiring in Construction - Raw Materials industry
– The stress on hiring functional specialists at Anhui Conch Cement 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.
High bargaining power of channel partners in Construction - Raw Materials industry
– because of the regulatory requirements in China, Anhui Conch Cement 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 Construction - Raw Materials industry.
No frontier risks strategy
– From the 10K / annual statement of Anhui Conch Cement, it seems that company is thinking out the frontier risks that can impact Construction - Raw Materials 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 Anhui Conch Cement products
– To increase the profitability and margins on the products, Anhui Conch Cement needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on Anhui Conch Cement ‘s star products
– The top 2 products and services of Anhui Conch Cement still accounts for major business revenue. This dependence on star products in Construction - Raw Materials industry has resulted into insufficient focus on developing new products, even though Anhui Conch Cement has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Anhui Conch Cement 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 Construction - Raw Materials industry using digital technology.
Increasing silos among functional specialists
– The organizational structure of Anhui Conch Cement is dominated by functional specialists. It is not different from other players in the Construction - Raw Materials industry, but Anhui Conch Cement needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Anhui Conch Cement to focus more on services in the Construction - Raw Materials industry rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative at Anhui Conch Cement, in the dynamic environment of Construction - Raw Materials industry it has struggled to respond to the nimble upstart competition. Anhui Conch Cement has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Anhui Conch Cement supply chain. Even after few cautionary changes, Anhui Conch Cement is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Anhui Conch Cement vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of China, Anhui Conch Cement needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Anhui Conch Cement Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Anhui Conch Cement are -
Manufacturing automation
– Anhui Conch Cement can use the latest technology developments to improve its manufacturing and designing process in Construction - Raw Materials 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.
Creating value in data economy
– The success of analytics program of Anhui Conch Cement has opened avenues for new revenue streams for the organization in Construction - Raw Materials industry. This can help Anhui Conch Cement to build a more holistic ecosystem for Anhui Conch Cement products in the Construction - Raw Materials industry by providing – data insight services, data privacy related products, data based consulting services, 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. Anhui Conch Cement can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Anhui Conch Cement has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Construction - Raw Materials sector. This continuous investment in analytics has enabled Anhui Conch Cement to build a competitive advantage using analytics. The analytics driven competitive advantage can help Anhui Conch Cement to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Anhui Conch Cement 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 Construction - Raw Materials industry.
Buying journey improvements
– Anhui Conch Cement can improve the customer journey of consumers in the Construction - Raw Materials 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 Anhui Conch Cement in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Construction - Raw Materials industry, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Anhui Conch Cement to increase its market reach. Anhui Conch Cement will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Construction - Raw Materials industry, but it has also influenced the consumer preferences. Anhui Conch Cement can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Anhui Conch Cement can develop new processes and procedures in Construction - Raw Materials 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.
Learning at scale
– Online learning technologies has now opened space for Anhui Conch Cement 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Anhui Conch Cement can use these opportunities to build new business models that can help the communities that Anhui Conch Cement operates in. Secondly it can use opportunities from government spending in Construction - Raw Materials sector.
Loyalty marketing
– Anhui Conch Cement 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.
Threats Anhui Conch Cement External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Anhui Conch Cement 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. Anhui Conch Cement needs to understand the core reasons impacting the Construction - Raw Materials industry. This will help it in building a better workplace.
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 Anhui Conch Cement.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Anhui Conch Cement may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Construction - Raw Materials sector.
Technology acceleration in Forth Industrial Revolution
– Anhui Conch Cement has witnessed rapid integration of technology during Covid-19 in the Construction - Raw Materials industry. As one of the leading players in the industry, Anhui Conch Cement needs to keep up with the evolution of technology in the Construction - Raw Materials 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.
Consumer confidence and its impact on Anhui Conch Cement 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 Construction - Raw Materials industry and other sectors.
Regulatory challenges
– Anhui Conch Cement 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 Construction - Raw Materials industry regulations.
High dependence on third party suppliers
– Anhui Conch Cement high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Construction - Raw Materials industry are lowering. It can presents Anhui Conch Cement with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Construction - Raw Materials sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Anhui Conch Cement 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 Anhui Conch Cement prominent markets.
Stagnating economy with rate increase
– Anhui Conch Cement 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 Construction - Raw Materials industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Anhui Conch Cement in Construction - Raw Materials industry. The Construction - Raw Materials 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.
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.
Increasing wage structure of Anhui Conch Cement
– 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 Anhui Conch Cement.
Weighted SWOT Analysis of Anhui Conch Cement Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Anhui Conch Cement 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 Anhui Conch Cement 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 Anhui Conch Cement 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 Anhui Conch Cement 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 Anhui Conch Cement needs to make to build a sustainable competitive advantage.
