Shenzhen Sunway Communication (300136) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Shenzhen Sunway Communication (China)

Based on various researches at Oak Spring University , Shenzhen Sunway Communication is operating in a macro-environment that has been destablized by – wage bills are increasing, supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, geopolitical disruptions, there is increasing trade war between United States & China, etc

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Introduction to SWOT Analysis of Shenzhen Sunway Communication

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

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Strengths of Shenzhen Sunway Communication | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Shenzhen Sunway Communication are -

Superior customer experience

– The customer experience strategy of Shenzhen Sunway Communication in Communications Equipment industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Sustainable margins compare to other players in Communications Equipment industry

– Shenzhen Sunway Communication has clearly differentiated products in the market place. This has enabled Shenzhen Sunway Communication to fetch slight price premium compare to the competitors in the Communications Equipment industry. The sustainable margins have also helped Shenzhen Sunway Communication to invest into research and development (R&D) and innovation.

Low bargaining power of suppliers

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

Organizational Resilience of Shenzhen Sunway Communication

– The covid-19 pandemic has put organizational resilience at the centre of everthing Shenzhen Sunway Communication does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Training and development

– Shenzhen Sunway Communication has one of the best training and development program in Technology 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.

High brand equity

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

Digital Transformation in Communications Equipment industry

- digital transformation varies from industry to industry. For Shenzhen Sunway Communication digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shenzhen Sunway Communication 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 Communications Equipment industry

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

Effective Research and Development (R&D)

– Shenzhen Sunway Communication has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Shenzhen Sunway Communication staying ahead in the Communications Equipment industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Cross disciplinary teams

– Horizontal connected teams at the Shenzhen Sunway Communication 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.

Successful track record of launching new products

– Shenzhen Sunway Communication has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Shenzhen Sunway Communication 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.

Learning organization

- Shenzhen Sunway Communication 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 Shenzhen Sunway Communication is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Shenzhen Sunway Communication emphasize – knowledge, initiative, and innovation.

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Weaknesses of Shenzhen Sunway Communication | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Shenzhen Sunway Communication are -

High dependence on Shenzhen Sunway Communication ‘s star products

– The top 2 products and services of Shenzhen Sunway Communication still accounts for major business revenue. This dependence on star products in Communications Equipment industry has resulted into insufficient focus on developing new products, even though Shenzhen Sunway Communication has relatively successful track record of launching new products.

Interest costs

– Compare to the competition, Shenzhen Sunway Communication 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.

High bargaining power of channel partners in Communications Equipment industry

– because of the regulatory requirements in China, Shenzhen Sunway Communication 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 Communications Equipment industry.

High cash cycle compare to competitors

Shenzhen Sunway Communication has a high cash cycle compare to other players in the Communications Equipment industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Low market penetration in new markets

– Outside its home market of China, Shenzhen Sunway Communication needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Ability to respond to the competition

– As the decision making is very deliberative at Shenzhen Sunway Communication, in the dynamic environment of Communications Equipment industry it has struggled to respond to the nimble upstart competition. Shenzhen Sunway Communication has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Slow decision making process

– As mentioned earlier in the report, Shenzhen Sunway Communication has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Communications Equipment industry over the last five years. Shenzhen Sunway Communication 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.

Skills based hiring in Communications Equipment industry

– The stress on hiring functional specialists at Shenzhen Sunway Communication 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.

Products dominated business model

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

Aligning sales with marketing

– From the outside it seems that Shenzhen Sunway Communication needs to have more collaboration between its sales team and marketing team. Sales professionals in the Communications Equipment industry have deep experience in developing customer relationships. Marketing department at Shenzhen Sunway Communication can leverage the sales team experience to cultivate customer relationships as Shenzhen Sunway Communication is planning to shift buying processes online.

Compensation and incentives

– The revenue per employee of Shenzhen Sunway Communication is just above the Communications Equipment 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.

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Shenzhen Sunway Communication Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Shenzhen Sunway Communication are -

Buying journey improvements

– Shenzhen Sunway Communication can improve the customer journey of consumers in the Communications Equipment 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.

Use of Bitcoin and other crypto currencies for transactions in Communications Equipment industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Shenzhen Sunway Communication in the Communications Equipment industry. Now Shenzhen Sunway Communication can target international markets with far fewer capital restrictions requirements than the existing system.

Better consumer reach

– The expansion of the 5G network will help Shenzhen Sunway Communication to increase its market reach. Shenzhen Sunway Communication 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.

Manufacturing automation

– Shenzhen Sunway Communication can use the latest technology developments to improve its manufacturing and designing process in Communications Equipment 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.

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 Shenzhen Sunway Communication 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.

Finding new ways to collaborate

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

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Communications Equipment industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Shenzhen Sunway Communication 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. Shenzhen Sunway Communication 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.

Using analytics as competitive advantage

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

Loyalty marketing

– Shenzhen Sunway Communication 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.

Building a culture of innovation

– managers at Shenzhen Sunway Communication 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 Communications Equipment industry.

Creating value in data economy

– The success of analytics program of Shenzhen Sunway Communication has opened avenues for new revenue streams for the organization in Communications Equipment industry. This can help Shenzhen Sunway Communication to build a more holistic ecosystem for Shenzhen Sunway Communication products in the Communications Equipment industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Shenzhen Sunway Communication is facing challenges because of the dominance of functional experts in the organization. Shenzhen Sunway Communication can utilize new technology in the field of Communications Equipment industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Shenzhen Sunway Communication in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Communications Equipment industry, and it will provide faster access to the consumers.

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Threats Shenzhen Sunway Communication External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Shenzhen Sunway Communication are -

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Shenzhen Sunway Communication in Communications Equipment industry. The Communications Equipment 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.

High dependence on third party suppliers

– Shenzhen Sunway Communication 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.

Shortening product life cycle

– it is one of the major threat that Shenzhen Sunway Communication is facing in Communications Equipment sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Regulatory challenges

– Shenzhen Sunway Communication 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 Communications Equipment industry regulations.

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.

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 Shenzhen Sunway Communication.

Consumer confidence and its impact on Shenzhen Sunway Communication 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 Communications Equipment industry and other sectors.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Shenzhen Sunway Communication 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 Shenzhen Sunway Communication prominent markets.

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. Shenzhen Sunway Communication 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.

Easy access to finance

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

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 Shenzhen Sunway Communication business can come under increasing regulations regarding data privacy, data security, etc.

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 Shenzhen Sunway Communication in the Communications Equipment sector and impact the bottomline of the organization.

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. Shenzhen Sunway Communication needs to understand the core reasons impacting the Communications Equipment industry. This will help it in building a better workplace.

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Weighted SWOT Analysis of Shenzhen Sunway Communication Template, Example

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

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