China Northern Rare Earth Hi-Tech (600111) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for China Northern Rare Earth Hi-Tech (China)

Based on various researches at Oak Spring University , China Northern Rare Earth Hi-Tech is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, technology disruption, increasing commodity prices, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, etc

---

---

---

---

Introduction to SWOT Analysis of China Northern Rare Earth Hi-Tech

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that China Northern Rare Earth Hi-Tech can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the China Northern Rare Earth Hi-Tech, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which China Northern Rare Earth Hi-Tech 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 Northern Rare Earth Hi-Tech can be done for the following purposes –
1. Strategic planning of China Northern Rare Earth Hi-Tech
2. Improving business portfolio management of China Northern Rare Earth Hi-Tech
3. Assessing feasibility of the new initiative in China
4. Making a Metal Mining sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of China Northern Rare Earth Hi-Tech

---

Strengths of China Northern Rare Earth Hi-Tech | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of China Northern Rare Earth Hi-Tech are -

Strong track record of project management in the Metal Mining industry

– China Northern Rare Earth Hi-Tech 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

– China Northern Rare Earth Hi-Tech is one of the most innovative firm in Metal Mining sector.

Digital Transformation in Metal Mining industry

- digital transformation varies from industry to industry. For China Northern Rare Earth Hi-Tech digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. China Northern Rare Earth Hi-Tech 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 China Northern Rare Earth Hi-Tech 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.

High brand equity

– China Northern Rare Earth Hi-Tech has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled China Northern Rare Earth Hi-Tech to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Successful track record of launching new products

– China Northern Rare Earth Hi-Tech has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. China Northern Rare Earth Hi-Tech 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 recruit top talent

– China Northern Rare Earth Hi-Tech is one of the leading players in the Metal Mining 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.

Cross disciplinary teams

– Horizontal connected teams at the China Northern Rare Earth Hi-Tech 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.

Low bargaining power of suppliers

– Suppliers of China Northern Rare Earth Hi-Tech in the Basic Materials sector have low bargaining power. China Northern Rare Earth Hi-Tech has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps China Northern Rare Earth Hi-Tech to manage not only supply disruptions but also source products at highly competitive prices.

Training and development

– China Northern Rare Earth Hi-Tech has one of the best training and development program in Basic Materials industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.

Highly skilled collaborators

– China Northern Rare Earth Hi-Tech has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Metal Mining industry. Secondly the value chain collaborators of China Northern Rare Earth Hi-Tech have helped the firm to develop new products and bring them quickly to the marketplace.

Effective Research and Development (R&D)

– China Northern Rare Earth Hi-Tech has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – China Northern Rare Earth Hi-Tech staying ahead in the Metal Mining industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

---

---

Weaknesses of China Northern Rare Earth Hi-Tech | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of China Northern Rare Earth Hi-Tech are -

Employees’ less understanding of China Northern Rare Earth Hi-Tech strategy

– From the outside it seems that the employees of China Northern Rare Earth Hi-Tech 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 cash cycle compare to competitors

China Northern Rare Earth Hi-Tech has a high cash cycle compare to other players in the Metal Mining industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Slow decision making process

– As mentioned earlier in the report, China Northern Rare Earth Hi-Tech has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Metal Mining industry over the last five years. China Northern Rare Earth Hi-Tech 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.

Compensation and incentives

– The revenue per employee of China Northern Rare Earth Hi-Tech is just above the Metal Mining 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.

Products dominated business model

– Even though China Northern Rare Earth Hi-Tech has some of the most successful models in the Metal Mining industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. China Northern Rare Earth Hi-Tech should strive to include more intangible value offerings along with its core products and services.

Need for greater diversity

– China Northern Rare Earth Hi-Tech has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.

Slow to strategic competitive environment developments

– As China Northern Rare Earth Hi-Tech is one of the leading players in the Metal Mining industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Metal Mining industry in last five years.

High dependence on China Northern Rare Earth Hi-Tech ‘s star products

– The top 2 products and services of China Northern Rare Earth Hi-Tech still accounts for major business revenue. This dependence on star products in Metal Mining industry has resulted into insufficient focus on developing new products, even though China Northern Rare Earth Hi-Tech has relatively successful track record of launching new products.

Increasing silos among functional specialists

– The organizational structure of China Northern Rare Earth Hi-Tech is dominated by functional specialists. It is not different from other players in the Metal Mining industry, but China Northern Rare Earth Hi-Tech needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help China Northern Rare Earth Hi-Tech to focus more on services in the Metal Mining industry rather than just following the product oriented approach.

Workers concerns about automation

– As automation is fast increasing in the Metal Mining industry, China Northern Rare Earth Hi-Tech 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.

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 Northern Rare Earth Hi-Tech supply chain. Even after few cautionary changes, China Northern Rare Earth Hi-Tech is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left China Northern Rare Earth Hi-Tech vulnerable to further global disruptions in South East Asia.

---

China Northern Rare Earth Hi-Tech Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of China Northern Rare Earth Hi-Tech are -

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, China Northern Rare Earth Hi-Tech can use these opportunities to build new business models that can help the communities that China Northern Rare Earth Hi-Tech operates in. Secondly it can use opportunities from government spending in Metal Mining sector.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, China Northern Rare Earth Hi-Tech 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 Northern Rare Earth Hi-Tech to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects China Northern Rare Earth Hi-Tech can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

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 Northern Rare Earth Hi-Tech 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.

Manufacturing automation

– China Northern Rare Earth Hi-Tech can use the latest technology developments to improve its manufacturing and designing process in Metal Mining sector. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.

Using analytics as competitive advantage

– China Northern Rare Earth Hi-Tech has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Metal Mining sector. This continuous investment in analytics has enabled China Northern Rare Earth Hi-Tech to build a competitive advantage using analytics. The analytics driven competitive advantage can help China Northern Rare Earth Hi-Tech to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Lowering marketing communication costs

– 5G expansion will open new opportunities for China Northern Rare Earth Hi-Tech in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Metal Mining industry, and it will provide faster access to the consumers.

Loyalty marketing

– China Northern Rare Earth Hi-Tech 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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Metal Mining industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. China Northern Rare Earth Hi-Tech 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 Northern Rare Earth Hi-Tech 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.

Learning at scale

– Online learning technologies has now opened space for China Northern Rare Earth Hi-Tech 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.

Better consumer reach

– The expansion of the 5G network will help China Northern Rare Earth Hi-Tech to increase its market reach. China Northern Rare Earth Hi-Tech 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.

Building a culture of innovation

– managers at China Northern Rare Earth Hi-Tech 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 Metal Mining industry.

Use of Bitcoin and other crypto currencies for transactions in Metal Mining industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for China Northern Rare Earth Hi-Tech in the Metal Mining industry. Now China Northern Rare Earth Hi-Tech can target international markets with far fewer capital restrictions requirements than the existing system.

---

Threats China Northern Rare Earth Hi-Tech External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of China Northern Rare Earth Hi-Tech are -

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for China Northern Rare Earth Hi-Tech in Metal Mining industry. The Metal Mining 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 Metal Mining industry are lowering. It can presents China Northern Rare Earth Hi-Tech with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Metal Mining sector.

Technology acceleration in Forth Industrial Revolution

– China Northern Rare Earth Hi-Tech has witnessed rapid integration of technology during Covid-19 in the Metal Mining industry. As one of the leading players in the industry, China Northern Rare Earth Hi-Tech needs to keep up with the evolution of technology in the Metal Mining 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.

High dependence on third party suppliers

– China Northern Rare Earth Hi-Tech 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 China Northern Rare Earth Hi-Tech business can come under increasing regulations regarding data privacy, data security, etc.

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.

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.

Consumer confidence and its impact on China Northern Rare Earth Hi-Tech 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 Metal Mining industry and other sectors.

Shortening product life cycle

– it is one of the major threat that China Northern Rare Earth Hi-Tech is facing in Metal Mining sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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 Northern Rare Earth Hi-Tech needs to understand the core reasons impacting the Metal Mining industry. This will help it in building a better workplace.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, China Northern Rare Earth Hi-Tech may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Metal Mining sector.

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 Northern Rare Earth Hi-Tech.

Stagnating economy with rate increase

– China Northern Rare Earth Hi-Tech 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 Metal Mining industry.

---

Weighted SWOT Analysis of China Northern Rare Earth Hi-Tech Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at China Northern Rare Earth Hi-Tech 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 Northern Rare Earth Hi-Tech 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 Northern Rare Earth Hi-Tech 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 Northern Rare Earth Hi-Tech 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 Northern Rare Earth Hi-Tech needs to make to build a sustainable competitive advantage.

--- ---