Tianqi Lithium A (2466) SWOT Analysis / TOWS Matrix / MBA Resources
Chemical Manufacturing
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Tianqi Lithium A (China)
Based on various researches at Oak Spring University , Tianqi Lithium A is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, wage bills are increasing, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies,
technology disruption, increasing energy prices, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Tianqi Lithium A can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tianqi Lithium A, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tianqi Lithium A 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 Tianqi Lithium A can be done for the following purposes –
1. Strategic planning of Tianqi Lithium A
2. Improving business portfolio management of Tianqi Lithium A
3. Assessing feasibility of the new initiative in China
4. Making a Chemical Manufacturing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Tianqi Lithium A
Strengths of Tianqi Lithium A | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tianqi Lithium A are -
Operational resilience
– The operational resilience strategy of Tianqi Lithium A comprises – understanding the underlying the factors in the Chemical Manufacturing 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.
Diverse revenue streams
– Tianqi Lithium A is present in almost all the verticals within the Chemical Manufacturing industry. This has provided Tianqi Lithium A 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.
Digital Transformation in Chemical Manufacturing industry
- digital transformation varies from industry to industry. For Tianqi Lithium A digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Tianqi Lithium A has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
High switching costs
– The high switching costs that Tianqi Lithium A 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.
Innovation driven organization
– Tianqi Lithium A is one of the most innovative firm in Chemical Manufacturing sector.
Analytics focus
– Tianqi Lithium A 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 Chemical Manufacturing 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.
Highly skilled collaborators
– Tianqi Lithium A has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Chemical Manufacturing industry. Secondly the value chain collaborators of Tianqi Lithium A have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Tianqi Lithium A is one of the leading players in the Chemical Manufacturing industry in China. It is in a position to attract the best talent available in China. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Tianqi Lithium A has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Tianqi Lithium A staying ahead in the Chemical Manufacturing industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Chemical Manufacturing
– Tianqi Lithium A is one of the leading players in the Chemical Manufacturing industry in China. Over the years it has not only transformed the business landscape in the Chemical Manufacturing industry in China but also across the existing markets. The ability to lead change has enabled Tianqi Lithium A in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Tianqi Lithium A in the Basic Materials sector have low bargaining power. Tianqi Lithium A has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tianqi Lithium A to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Tianqi Lithium A has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Tianqi Lithium A 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.
Weaknesses of Tianqi Lithium A | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Tianqi Lithium A are -
Increasing silos among functional specialists
– The organizational structure of Tianqi Lithium A is dominated by functional specialists. It is not different from other players in the Chemical Manufacturing industry, but Tianqi Lithium A needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Tianqi Lithium A to focus more on services in the Chemical Manufacturing industry rather than just following the product oriented approach.
High bargaining power of channel partners in Chemical Manufacturing industry
– because of the regulatory requirements in China, Tianqi Lithium A 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 Chemical Manufacturing industry.
High cash cycle compare to competitors
Tianqi Lithium A has a high cash cycle compare to other players in the Chemical Manufacturing industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Ability to respond to the competition
– As the decision making is very deliberative at Tianqi Lithium A, in the dynamic environment of Chemical Manufacturing industry it has struggled to respond to the nimble upstart competition. Tianqi Lithium A has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of China, Tianqi Lithium A needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Tianqi Lithium A has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Chemical Manufacturing industry over the last five years. Tianqi Lithium A 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.
Aligning sales with marketing
– From the outside it seems that Tianqi Lithium A needs to have more collaboration between its sales team and marketing team. Sales professionals in the Chemical Manufacturing industry have deep experience in developing customer relationships. Marketing department at Tianqi Lithium A can leverage the sales team experience to cultivate customer relationships as Tianqi Lithium A is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As Tianqi Lithium A is one of the leading players in the Chemical Manufacturing industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Chemical Manufacturing industry in last five years.
High dependence on Tianqi Lithium A ‘s star products
– The top 2 products and services of Tianqi Lithium A still accounts for major business revenue. This dependence on star products in Chemical Manufacturing industry has resulted into insufficient focus on developing new products, even though Tianqi Lithium A has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, Tianqi Lithium A has high operating costs in the Chemical Manufacturing industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Tianqi Lithium A lucrative customers.
Compensation and incentives
– The revenue per employee of Tianqi Lithium A is just above the Chemical Manufacturing 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.
Tianqi Lithium A Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Tianqi Lithium A are -
Creating value in data economy
– The success of analytics program of Tianqi Lithium A has opened avenues for new revenue streams for the organization in Chemical Manufacturing industry. This can help Tianqi Lithium A to build a more holistic ecosystem for Tianqi Lithium A products in the Chemical Manufacturing 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 Tianqi Lithium A 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.
Use of Bitcoin and other crypto currencies for transactions in Chemical Manufacturing industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Tianqi Lithium A in the Chemical Manufacturing industry. Now Tianqi Lithium A can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Tianqi Lithium A 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 Tianqi Lithium A to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Tianqi Lithium A 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Tianqi Lithium A can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Tianqi Lithium A can improve the customer journey of consumers in the Chemical Manufacturing 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Chemical Manufacturing industry, but it has also influenced the consumer preferences. Tianqi Lithium A can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Tianqi Lithium A can use the latest technology developments to improve its manufacturing and designing process in Chemical Manufacturing 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Tianqi Lithium A in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Chemical Manufacturing industry, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Tianqi Lithium A has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Chemical Manufacturing sector. This continuous investment in analytics has enabled Tianqi Lithium A to build a competitive advantage using analytics. The analytics driven competitive advantage can help Tianqi Lithium A to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Tianqi Lithium A can develop new processes and procedures in Chemical Manufacturing 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.
Loyalty marketing
– Tianqi Lithium A 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 Tianqi Lithium A External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Tianqi Lithium A are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Tianqi Lithium A may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Chemical Manufacturing sector.
Increasing wage structure of Tianqi Lithium A
– 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 Tianqi Lithium A.
Shortening product life cycle
– it is one of the major threat that Tianqi Lithium A is facing in Chemical Manufacturing 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, Tianqi Lithium A 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 Tianqi Lithium A prominent markets.
Stagnating economy with rate increase
– Tianqi Lithium A 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 Chemical Manufacturing industry.
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. Tianqi Lithium A 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.
High dependence on third party suppliers
– Tianqi Lithium A 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.
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 Tianqi Lithium A business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Tianqi Lithium A 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. Tianqi Lithium A can take advantage of this fund but it will also bring new competitors in the Chemical Manufacturing industry.
Regulatory challenges
– Tianqi Lithium A 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 Chemical Manufacturing industry regulations.
Easy access to finance
– Easy access to finance in Chemical Manufacturing industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Tianqi Lithium A can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Chemical Manufacturing industry are lowering. It can presents Tianqi Lithium A with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Chemical Manufacturing sector.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Weighted SWOT Analysis of Tianqi Lithium A Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Tianqi Lithium A 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 Tianqi Lithium A 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 Tianqi Lithium A 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 Tianqi Lithium A 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 Tianqi Lithium A needs to make to build a sustainable competitive advantage.