SWOT Analysis / TOWS Matrix for Beijing Kunlun Tech (China)
Based on various researches at Oak Spring University , Beijing Kunlun Tech is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models,
banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Beijing Kunlun Tech
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Beijing Kunlun Tech can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Beijing Kunlun Tech, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Beijing Kunlun Tech operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Beijing Kunlun Tech can be done for the following purposes –
1. Strategic planning of Beijing Kunlun Tech
2. Improving business portfolio management of Beijing Kunlun Tech
3. Assessing feasibility of the new initiative in China
4. Making a Computer Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Beijing Kunlun Tech
Strengths of Beijing Kunlun Tech | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Beijing Kunlun Tech are -
Digital Transformation in Computer Services industry
- digital transformation varies from industry to industry. For Beijing Kunlun Tech digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Beijing Kunlun Tech has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Highly skilled collaborators
– Beijing Kunlun Tech has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Computer Services industry. Secondly the value chain collaborators of Beijing Kunlun Tech have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Beijing Kunlun Tech 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.
Sustainable margins compare to other players in Computer Services industry
– Beijing Kunlun Tech has clearly differentiated products in the market place. This has enabled Beijing Kunlun Tech to fetch slight price premium compare to the competitors in the Computer Services industry. The sustainable margins have also helped Beijing Kunlun Tech to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Beijing Kunlun Tech is one of the leading players in the Computer Services 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 Beijing Kunlun Tech has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Learning organization
- Beijing Kunlun Tech 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 Beijing Kunlun Tech is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Beijing Kunlun Tech emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Beijing Kunlun Tech in the Technology sector have low bargaining power. Beijing Kunlun Tech has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Beijing Kunlun Tech to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy of Beijing Kunlun Tech comprises – understanding the underlying the factors in the Computer Services 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.
Analytics focus
– Beijing Kunlun Tech 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 Computer Services 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.
Ability to lead change in Computer Services
– Beijing Kunlun Tech is one of the leading players in the Computer Services industry in China. Over the years it has not only transformed the business landscape in the Computer Services industry in China but also across the existing markets. The ability to lead change has enabled Beijing Kunlun Tech in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Beijing Kunlun Tech in Computer Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses of Beijing Kunlun Tech | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Beijing Kunlun Tech are -
Lack of clear differentiation of Beijing Kunlun Tech products
– To increase the profitability and margins on the products, Beijing Kunlun Tech needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative at Beijing Kunlun Tech, in the dynamic environment of Computer Services industry it has struggled to respond to the nimble upstart competition. Beijing Kunlun Tech has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners in Computer Services industry
– because of the regulatory requirements in China, Beijing Kunlun Tech 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 Computer Services industry.
Skills based hiring in Computer Services industry
– The stress on hiring functional specialists at Beijing Kunlun Tech 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.
Capital Spending Reduction
– Even during the low interest decade, Beijing Kunlun Tech 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 Computer Services industry using digital technology.
Employees’ less understanding of Beijing Kunlun Tech strategy
– From the outside it seems that the employees of Beijing Kunlun Tech don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Increasing silos among functional specialists
– The organizational structure of Beijing Kunlun Tech is dominated by functional specialists. It is not different from other players in the Computer Services industry, but Beijing Kunlun Tech needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Beijing Kunlun Tech to focus more on services in the Computer Services industry rather than just following the product oriented approach.
Need for greater diversity
– Beijing Kunlun Tech has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Interest costs
– Compare to the competition, Beijing Kunlun Tech 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.
Low market penetration in new markets
– Outside its home market of China, Beijing Kunlun Tech needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– From the 10K / annual statement of Beijing Kunlun Tech, it seems that company is thinking out the frontier risks that can impact Computer Services 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.
Beijing Kunlun Tech Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Beijing Kunlun Tech are -
Building a culture of innovation
– managers at Beijing Kunlun Tech can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Computer Services industry.
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 Beijing Kunlun Tech to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Loyalty marketing
– Beijing Kunlun Tech has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Computer Services industry, but it has also influenced the consumer preferences. Beijing Kunlun Tech can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Beijing Kunlun Tech can improve the customer journey of consumers in the Computer Services 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.
Better consumer reach
– The expansion of the 5G network will help Beijing Kunlun Tech to increase its market reach. Beijing Kunlun Tech will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Learning at scale
– Online learning technologies has now opened space for Beijing Kunlun Tech to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Developing new processes and practices
– Beijing Kunlun Tech can develop new processes and procedures in Computer Services 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Beijing Kunlun Tech 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 Beijing Kunlun Tech to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Beijing Kunlun Tech has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Computer Services sector. This continuous investment in analytics has enabled Beijing Kunlun Tech to build a competitive advantage using analytics. The analytics driven competitive advantage can help Beijing Kunlun Tech to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Beijing Kunlun Tech can use the latest technology developments to improve its manufacturing and designing process in Computer Services 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.
Creating value in data economy
– The success of analytics program of Beijing Kunlun Tech has opened avenues for new revenue streams for the organization in Computer Services industry. This can help Beijing Kunlun Tech to build a more holistic ecosystem for Beijing Kunlun Tech products in the Computer Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Beijing Kunlun Tech 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.
Threats Beijing Kunlun Tech External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Beijing Kunlun Tech are -
Regulatory challenges
– Beijing Kunlun Tech 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 Computer Services industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Beijing Kunlun Tech 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 Beijing Kunlun Tech prominent markets.
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. Beijing Kunlun Tech needs to understand the core reasons impacting the Computer Services industry. This will help it in building a better workplace.
Increasing wage structure of Beijing Kunlun Tech
– 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 Beijing Kunlun Tech.
Consumer confidence and its impact on Beijing Kunlun Tech demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in Computer Services industry and other sectors.
High dependence on third party suppliers
– Beijing Kunlun Tech high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
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.
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 Beijing Kunlun Tech business can come under increasing regulations regarding data privacy, data security, etc.
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 Beijing Kunlun Tech.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Beijing Kunlun Tech in Computer Services industry. The Computer Services 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Beijing Kunlun Tech may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Computer Services sector.
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. Beijing Kunlun Tech 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 Computer Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Beijing Kunlun Tech can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Beijing Kunlun Tech Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Beijing Kunlun Tech needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of Beijing Kunlun Tech is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of Beijing Kunlun Tech is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Beijing Kunlun Tech to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Beijing Kunlun Tech needs to make to build a sustainable competitive advantage.