Zhongtai Chem A (2092) SWOT Analysis / TOWS Matrix / MBA Resources
Chemicals - Plastics & Rubber
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Zhongtai Chem A (China)
Based on various researches at Oak Spring University , Zhongtai Chem A is operating in a macro-environment that has been destablized by – technology disruption, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, increasing transportation and logistics costs, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%,
increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Zhongtai Chem A can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Zhongtai Chem A, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Zhongtai Chem A operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Zhongtai Chem A can be done for the following purposes –
1. Strategic planning of Zhongtai Chem A
2. Improving business portfolio management of Zhongtai Chem A
3. Assessing feasibility of the new initiative in China
4. Making a Chemicals - Plastics & Rubber sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Zhongtai Chem A
Strengths of Zhongtai Chem A | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Zhongtai Chem A are -
Sustainable margins compare to other players in Chemicals - Plastics & Rubber industry
– Zhongtai Chem A has clearly differentiated products in the market place. This has enabled Zhongtai Chem A to fetch slight price premium compare to the competitors in the Chemicals - Plastics & Rubber industry. The sustainable margins have also helped Zhongtai Chem A to invest into research and development (R&D) and innovation.
Training and development
– Zhongtai Chem A 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.
Learning organization
- Zhongtai Chem A 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 Zhongtai Chem A is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Zhongtai Chem A emphasize – knowledge, initiative, and innovation.
Ability to lead change in Chemicals - Plastics & Rubber
– Zhongtai Chem A is one of the leading players in the Chemicals - Plastics & Rubber industry in China. Over the years it has not only transformed the business landscape in the Chemicals - Plastics & Rubber industry in China but also across the existing markets. The ability to lead change has enabled Zhongtai Chem A in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Zhongtai Chem A has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Zhongtai Chem A staying ahead in the Chemicals - Plastics & Rubber industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Chemicals - Plastics & Rubber industry
- digital transformation varies from industry to industry. For Zhongtai Chem A digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Zhongtai Chem A has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Ability to recruit top talent
– Zhongtai Chem A is one of the leading players in the Chemicals - Plastics & Rubber 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.
Strong track record of project management in the Chemicals - Plastics & Rubber industry
– Zhongtai Chem A is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy of Zhongtai Chem A comprises – understanding the underlying the factors in the Chemicals - Plastics & Rubber industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Diverse revenue streams
– Zhongtai Chem A is present in almost all the verticals within the Chemicals - Plastics & Rubber industry. This has provided Zhongtai Chem A a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
High brand equity
– Zhongtai Chem A has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Zhongtai Chem A to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Zhongtai Chem A has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Zhongtai Chem A has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Weaknesses of Zhongtai Chem A | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Zhongtai Chem A are -
Lack of clear differentiation of Zhongtai Chem A products
– To increase the profitability and margins on the products, Zhongtai Chem A needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of China, Zhongtai Chem A needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Zhongtai Chem A 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.
Employees’ less understanding of Zhongtai Chem A strategy
– From the outside it seems that the employees of Zhongtai Chem A 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.
Products dominated business model
– Even though Zhongtai Chem A has some of the most successful models in the Chemicals - Plastics & Rubber industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Zhongtai Chem A should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Zhongtai Chem A has a high cash cycle compare to other players in the Chemicals - Plastics & Rubber industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Aligning sales with marketing
– From the outside it seems that Zhongtai Chem A needs to have more collaboration between its sales team and marketing team. Sales professionals in the Chemicals - Plastics & Rubber industry have deep experience in developing customer relationships. Marketing department at Zhongtai Chem A can leverage the sales team experience to cultivate customer relationships as Zhongtai Chem A is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Zhongtai Chem A is dominated by functional specialists. It is not different from other players in the Chemicals - Plastics & Rubber industry, but Zhongtai Chem A needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Zhongtai Chem A to focus more on services in the Chemicals - Plastics & Rubber industry rather than just following the product oriented approach.
High bargaining power of channel partners in Chemicals - Plastics & Rubber industry
– because of the regulatory requirements in China, Zhongtai Chem A is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Chemicals - Plastics & Rubber industry.
Slow decision making process
– As mentioned earlier in the report, Zhongtai Chem A has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Chemicals - Plastics & Rubber industry over the last five years. Zhongtai Chem A even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Ability to respond to the competition
– As the decision making is very deliberative at Zhongtai Chem A, in the dynamic environment of Chemicals - Plastics & Rubber industry it has struggled to respond to the nimble upstart competition. Zhongtai Chem A has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Zhongtai Chem A Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Zhongtai Chem A are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Zhongtai Chem A in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Chemicals - Plastics & Rubber industry, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at Zhongtai Chem A 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 Chemicals - Plastics & Rubber industry.
Manufacturing automation
– Zhongtai Chem A can use the latest technology developments to improve its manufacturing and designing process in Chemicals - Plastics & Rubber 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Zhongtai Chem A to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Zhongtai Chem A to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Zhongtai Chem A 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
– Zhongtai Chem A has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Leveraging digital technologies
– Zhongtai Chem A 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.
Buying journey improvements
– Zhongtai Chem A can improve the customer journey of consumers in the Chemicals - Plastics & Rubber 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.
Learning at scale
– Online learning technologies has now opened space for Zhongtai Chem A 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.
Using analytics as competitive advantage
– Zhongtai Chem A has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Chemicals - Plastics & Rubber sector. This continuous investment in analytics has enabled Zhongtai Chem A to build a competitive advantage using analytics. The analytics driven competitive advantage can help Zhongtai Chem A to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Zhongtai Chem A is facing challenges because of the dominance of functional experts in the organization. Zhongtai Chem A can utilize new technology in the field of Chemicals - Plastics & Rubber industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Use of Bitcoin and other crypto currencies for transactions in Chemicals - Plastics & Rubber industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Zhongtai Chem A in the Chemicals - Plastics & Rubber industry. Now Zhongtai Chem A can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Zhongtai Chem A has opened avenues for new revenue streams for the organization in Chemicals - Plastics & Rubber industry. This can help Zhongtai Chem A to build a more holistic ecosystem for Zhongtai Chem A products in the Chemicals - Plastics & Rubber industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats Zhongtai Chem A External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Zhongtai Chem A are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Zhongtai Chem A in Chemicals - Plastics & Rubber industry. The Chemicals - Plastics & Rubber 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.
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.
High dependence on third party suppliers
– Zhongtai Chem A high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Increasing wage structure of Zhongtai Chem A
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Zhongtai Chem A.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Zhongtai Chem A can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate Zhongtai Chem A prominent markets.
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 Zhongtai Chem A 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 Zhongtai Chem A in the Chemicals - Plastics & Rubber sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Zhongtai Chem A can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the Chemicals - Plastics & Rubber industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Chemicals - Plastics & Rubber industry are lowering. It can presents Zhongtai Chem A with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Chemicals - Plastics & Rubber sector.
Consumer confidence and its impact on Zhongtai Chem A 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 Chemicals - Plastics & Rubber industry and other sectors.
Shortening product life cycle
– it is one of the major threat that Zhongtai Chem A is facing in Chemicals - Plastics & Rubber sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Zhongtai Chem A may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Chemicals - Plastics & Rubber sector.
Technology acceleration in Forth Industrial Revolution
– Zhongtai Chem A has witnessed rapid integration of technology during Covid-19 in the Chemicals - Plastics & Rubber industry. As one of the leading players in the industry, Zhongtai Chem A needs to keep up with the evolution of technology in the Chemicals - Plastics & Rubber 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.
Weighted SWOT Analysis of Zhongtai Chem A Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Zhongtai Chem A needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of Zhongtai Chem A is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of Zhongtai Chem A is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Zhongtai Chem A to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Zhongtai Chem A needs to make to build a sustainable competitive advantage.