Wuxi Little Swan (200418) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Wuxi Little Swan (China)

Based on various researches at Oak Spring University , Wuxi Little Swan is operating in a macro-environment that has been destablized by – challanges to central banks by blockchain based private currencies, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , technology disruption, increasing household debt because of falling income levels, etc

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Introduction to SWOT Analysis of Wuxi Little Swan

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Wuxi Little Swan can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Wuxi Little Swan, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Wuxi Little Swan 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Wuxi Little Swan can be done for the following purposes –
1. Strategic planning of Wuxi Little Swan
2. Improving business portfolio management of Wuxi Little Swan
3. Assessing feasibility of the new initiative in China
4. Making a Appliance & Tool sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Wuxi Little Swan

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Strengths of Wuxi Little Swan | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Wuxi Little Swan are -

Analytics focus

– Wuxi Little Swan 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 Appliance & Tool 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.

Successful track record of launching new products

– Wuxi Little Swan has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Wuxi Little Swan has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.

Highly skilled collaborators

– Wuxi Little Swan has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Appliance & Tool industry. Secondly the value chain collaborators of Wuxi Little Swan have helped the firm to develop new products and bring them quickly to the marketplace.

Low bargaining power of suppliers

– Suppliers of Wuxi Little Swan in the Consumer Cyclical sector have low bargaining power. Wuxi Little Swan has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Wuxi Little Swan to manage not only supply disruptions but also source products at highly competitive prices.

Ability to lead change in Appliance & Tool

– Wuxi Little Swan is one of the leading players in the Appliance & Tool industry in China. Over the years it has not only transformed the business landscape in the Appliance & Tool industry in China but also across the existing markets. The ability to lead change has enabled Wuxi Little Swan in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Innovation driven organization

– Wuxi Little Swan is one of the most innovative firm in Appliance & Tool sector.

Digital Transformation in Appliance & Tool industry

- digital transformation varies from industry to industry. For Wuxi Little Swan digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Wuxi Little Swan 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.

Strong track record of project management in the Appliance & Tool industry

– Wuxi Little Swan is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Cross disciplinary teams

– Horizontal connected teams at the Wuxi Little Swan 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.

Sustainable margins compare to other players in Appliance & Tool industry

– Wuxi Little Swan has clearly differentiated products in the market place. This has enabled Wuxi Little Swan to fetch slight price premium compare to the competitors in the Appliance & Tool industry. The sustainable margins have also helped Wuxi Little Swan to invest into research and development (R&D) and innovation.

High brand equity

– Wuxi Little Swan has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Wuxi Little Swan to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Effective Research and Development (R&D)

– Wuxi Little Swan has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Wuxi Little Swan staying ahead in the Appliance & Tool industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

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Weaknesses of Wuxi Little Swan | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Wuxi Little Swan are -

No frontier risks strategy

– From the 10K / annual statement of Wuxi Little Swan, it seems that company is thinking out the frontier risks that can impact Appliance & Tool 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.

Products dominated business model

– Even though Wuxi Little Swan has some of the most successful models in the Appliance & Tool industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Wuxi Little Swan should strive to include more intangible value offerings along with its core products and services.

Increasing silos among functional specialists

– The organizational structure of Wuxi Little Swan is dominated by functional specialists. It is not different from other players in the Appliance & Tool industry, but Wuxi Little Swan needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Wuxi Little Swan to focus more on services in the Appliance & Tool industry rather than just following the product oriented approach.

Ability to respond to the competition

– As the decision making is very deliberative at Wuxi Little Swan, in the dynamic environment of Appliance & Tool industry it has struggled to respond to the nimble upstart competition. Wuxi Little Swan has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Skills based hiring in Appliance & Tool industry

– The stress on hiring functional specialists at Wuxi Little Swan 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.

Employees’ less understanding of Wuxi Little Swan strategy

– From the outside it seems that the employees of Wuxi Little Swan 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

Wuxi Little Swan has a high cash cycle compare to other players in the Appliance & Tool industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

High dependence on Wuxi Little Swan ‘s star products

– The top 2 products and services of Wuxi Little Swan still accounts for major business revenue. This dependence on star products in Appliance & Tool industry has resulted into insufficient focus on developing new products, even though Wuxi Little Swan has relatively successful track record of launching new products.

High bargaining power of channel partners in Appliance & Tool industry

– because of the regulatory requirements in China, Wuxi Little Swan 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 Appliance & Tool industry.

Lack of clear differentiation of Wuxi Little Swan products

– To increase the profitability and margins on the products, Wuxi Little Swan needs to provide more differentiated products than what it is currently offering in the marketplace.

Interest costs

– Compare to the competition, Wuxi Little Swan has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.

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Wuxi Little Swan Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Wuxi Little Swan are -

Building a culture of innovation

– managers at Wuxi Little Swan 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 Appliance & Tool industry.

Reforming the budgeting process

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

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Wuxi Little Swan can use these opportunities to build new business models that can help the communities that Wuxi Little Swan operates in. Secondly it can use opportunities from government spending in Appliance & Tool sector.

Using analytics as competitive advantage

– Wuxi Little Swan has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Appliance & Tool sector. This continuous investment in analytics has enabled Wuxi Little Swan to build a competitive advantage using analytics. The analytics driven competitive advantage can help Wuxi Little Swan to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Loyalty marketing

– Wuxi Little Swan 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Wuxi Little Swan 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.

Use of Bitcoin and other crypto currencies for transactions in Appliance & Tool industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Wuxi Little Swan in the Appliance & Tool industry. Now Wuxi Little Swan can target international markets with far fewer capital restrictions requirements than the existing system.

Learning at scale

– Online learning technologies has now opened space for Wuxi Little Swan 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.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Appliance & Tool industry, but it has also influenced the consumer preferences. Wuxi Little Swan can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Better consumer reach

– The expansion of the 5G network will help Wuxi Little Swan to increase its market reach. Wuxi Little Swan 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Wuxi Little Swan is facing challenges because of the dominance of functional experts in the organization. Wuxi Little Swan can utilize new technology in the field of Appliance & Tool industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Developing new processes and practices

– Wuxi Little Swan can develop new processes and procedures in Appliance & Tool 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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Appliance & Tool industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Wuxi Little Swan 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. Wuxi Little Swan 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.

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Threats Wuxi Little Swan External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Wuxi Little Swan are -

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.

Consumer confidence and its impact on Wuxi Little Swan 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 Appliance & Tool industry and other sectors.

Technology acceleration in Forth Industrial Revolution

– Wuxi Little Swan has witnessed rapid integration of technology during Covid-19 in the Appliance & Tool industry. As one of the leading players in the industry, Wuxi Little Swan needs to keep up with the evolution of technology in the Appliance & Tool 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.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Appliance & Tool industry are lowering. It can presents Wuxi Little Swan with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Appliance & Tool sector.

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. Wuxi Little Swan needs to understand the core reasons impacting the Appliance & Tool industry. This will help it in building a better workplace.

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.

Environmental challenges

– Wuxi Little Swan 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. Wuxi Little Swan can take advantage of this fund but it will also bring new competitors in the Appliance & Tool industry.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Wuxi Little Swan 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 Wuxi Little Swan prominent markets.

Stagnating economy with rate increase

– Wuxi Little Swan 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 Appliance & Tool industry.

Regulatory challenges

– Wuxi Little Swan 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 Appliance & Tool industry regulations.

Increasing wage structure of Wuxi Little Swan

– 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 Wuxi Little Swan.

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 Wuxi Little Swan business can come under increasing regulations regarding data privacy, data security, etc.

Easy access to finance

– Easy access to finance in Appliance & Tool industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Wuxi Little Swan can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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Weighted SWOT Analysis of Wuxi Little Swan Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Wuxi Little Swan 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 Wuxi Little Swan 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 Wuxi Little Swan 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 Wuxi Little Swan 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 Wuxi Little Swan needs to make to build a sustainable competitive advantage.

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