SWOT Analysis / TOWS Matrix for Tonghua Dongbao Pharm (China)
Based on various researches at Oak Spring University , Tonghua Dongbao Pharm is operating in a macro-environment that has been destablized by – challanges to central banks by blockchain based private currencies, there is backlash against globalization, increasing commodity prices, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels,
there is increasing trade war between United States & China, increasing energy prices, etc
Introduction to SWOT Analysis of Tonghua Dongbao Pharm
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Tonghua Dongbao Pharm can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tonghua Dongbao Pharm, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tonghua Dongbao Pharm 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 Tonghua Dongbao Pharm can be done for the following purposes –
1. Strategic planning of Tonghua Dongbao Pharm
2. Improving business portfolio management of Tonghua Dongbao Pharm
3. Assessing feasibility of the new initiative in China
4. Making a Biotechnology & Drugs sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Tonghua Dongbao Pharm
Strengths of Tonghua Dongbao Pharm | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tonghua Dongbao Pharm are -
Diverse revenue streams
– Tonghua Dongbao Pharm is present in almost all the verticals within the Biotechnology & Drugs industry. This has provided Tonghua Dongbao Pharm 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.
Analytics focus
– Tonghua Dongbao Pharm 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 Biotechnology & Drugs 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.
Effective Research and Development (R&D)
– Tonghua Dongbao Pharm has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Tonghua Dongbao Pharm staying ahead in the Biotechnology & Drugs industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy of Tonghua Dongbao Pharm comprises – understanding the underlying the factors in the Biotechnology & Drugs 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.
Innovation driven organization
– Tonghua Dongbao Pharm is one of the most innovative firm in Biotechnology & Drugs sector.
Ability to recruit top talent
– Tonghua Dongbao Pharm is one of the leading players in the Biotechnology & Drugs 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.
High switching costs
– The high switching costs that Tonghua Dongbao Pharm 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.
Training and development
– Tonghua Dongbao Pharm has one of the best training and development program in Healthcare 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.
Ability to lead change in Biotechnology & Drugs
– Tonghua Dongbao Pharm is one of the leading players in the Biotechnology & Drugs industry in China. Over the years it has not only transformed the business landscape in the Biotechnology & Drugs industry in China but also across the existing markets. The ability to lead change has enabled Tonghua Dongbao Pharm in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Biotechnology & Drugs industry
- digital transformation varies from industry to industry. For Tonghua Dongbao Pharm digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Tonghua Dongbao Pharm 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.
Learning organization
- Tonghua Dongbao Pharm 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 Tonghua Dongbao Pharm is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Tonghua Dongbao Pharm emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Tonghua Dongbao Pharm in Biotechnology & Drugs industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses of Tonghua Dongbao Pharm | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Tonghua Dongbao Pharm are -
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 Tonghua Dongbao Pharm supply chain. Even after few cautionary changes, Tonghua Dongbao Pharm is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Tonghua Dongbao Pharm vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– From the outside it seems that Tonghua Dongbao Pharm needs to have more collaboration between its sales team and marketing team. Sales professionals in the Biotechnology & Drugs industry have deep experience in developing customer relationships. Marketing department at Tonghua Dongbao Pharm can leverage the sales team experience to cultivate customer relationships as Tonghua Dongbao Pharm is planning to shift buying processes online.
High operating costs
– Compare to the competitors, Tonghua Dongbao Pharm has high operating costs in the Biotechnology & Drugs industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Tonghua Dongbao Pharm lucrative customers.
Slow to strategic competitive environment developments
– As Tonghua Dongbao Pharm is one of the leading players in the Biotechnology & Drugs industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Biotechnology & Drugs industry in last five years.
Compensation and incentives
– The revenue per employee of Tonghua Dongbao Pharm is just above the Biotechnology & Drugs 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.
Low market penetration in new markets
– Outside its home market of China, Tonghua Dongbao Pharm needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Tonghua Dongbao Pharm 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 Biotechnology & Drugs industry using digital technology.
Need for greater diversity
– Tonghua Dongbao Pharm 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 decision making process
– As mentioned earlier in the report, Tonghua Dongbao Pharm has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Biotechnology & Drugs industry over the last five years. Tonghua Dongbao Pharm 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.
Ability to respond to the competition
– As the decision making is very deliberative at Tonghua Dongbao Pharm, in the dynamic environment of Biotechnology & Drugs industry it has struggled to respond to the nimble upstart competition. Tonghua Dongbao Pharm has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– From the 10K / annual statement of Tonghua Dongbao Pharm, it seems that company is thinking out the frontier risks that can impact Biotechnology & Drugs 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.
Tonghua Dongbao Pharm Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Tonghua Dongbao Pharm are -
Creating value in data economy
– The success of analytics program of Tonghua Dongbao Pharm has opened avenues for new revenue streams for the organization in Biotechnology & Drugs industry. This can help Tonghua Dongbao Pharm to build a more holistic ecosystem for Tonghua Dongbao Pharm products in the Biotechnology & Drugs industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Tonghua Dongbao Pharm to increase its market reach. Tonghua Dongbao Pharm 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 Biotechnology & Drugs industry, but it has also influenced the consumer preferences. Tonghua Dongbao Pharm can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Tonghua Dongbao Pharm 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.
Building a culture of innovation
– managers at Tonghua Dongbao Pharm 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 Biotechnology & Drugs industry.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Tonghua Dongbao Pharm in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Biotechnology & Drugs industry, and it will provide faster access to the consumers.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Tonghua Dongbao Pharm is facing challenges because of the dominance of functional experts in the organization. Tonghua Dongbao Pharm can utilize new technology in the field of Biotechnology & Drugs industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Tonghua Dongbao Pharm 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 Tonghua Dongbao Pharm to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Tonghua Dongbao Pharm can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, 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 Tonghua Dongbao Pharm 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Tonghua Dongbao Pharm 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 Tonghua Dongbao Pharm 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 Tonghua Dongbao Pharm can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Tonghua Dongbao Pharm 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 Tonghua Dongbao Pharm External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Tonghua Dongbao Pharm are -
High dependence on third party suppliers
– Tonghua Dongbao Pharm 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.
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 Tonghua Dongbao Pharm in the Biotechnology & Drugs sector and impact the bottomline of the organization.
Environmental challenges
– Tonghua Dongbao Pharm 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. Tonghua Dongbao Pharm can take advantage of this fund but it will also bring new competitors in the Biotechnology & Drugs industry.
Regulatory challenges
– Tonghua Dongbao Pharm 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 Biotechnology & Drugs industry regulations.
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.
Technology acceleration in Forth Industrial Revolution
– Tonghua Dongbao Pharm has witnessed rapid integration of technology during Covid-19 in the Biotechnology & Drugs industry. As one of the leading players in the industry, Tonghua Dongbao Pharm needs to keep up with the evolution of technology in the Biotechnology & Drugs 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 Tonghua Dongbao Pharm 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 Biotechnology & Drugs industry and other sectors.
Increasing wage structure of Tonghua Dongbao Pharm
– 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 Tonghua Dongbao Pharm.
Stagnating economy with rate increase
– Tonghua Dongbao Pharm 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 Biotechnology & Drugs industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Tonghua Dongbao Pharm may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Biotechnology & Drugs sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Tonghua Dongbao Pharm 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 Tonghua Dongbao Pharm prominent markets.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Biotechnology & Drugs industry are lowering. It can presents Tonghua Dongbao Pharm with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Biotechnology & Drugs sector.
Weighted SWOT Analysis of Tonghua Dongbao Pharm Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Tonghua Dongbao Pharm 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 Tonghua Dongbao Pharm 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 Tonghua Dongbao Pharm 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 Tonghua Dongbao Pharm 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 Tonghua Dongbao Pharm needs to make to build a sustainable competitive advantage.
