Anhui Anke BioTech Group (300009) SWOT Analysis / TOWS Matrix / MBA Resources
Biotechnology & Drugs
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Anhui Anke BioTech Group (China)
Based on various researches at Oak Spring University , Anhui Anke BioTech Group is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy,
central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Anhui Anke BioTech Group
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Anhui Anke BioTech Group can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Anhui Anke BioTech Group, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Anhui Anke BioTech Group 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 Anhui Anke BioTech Group can be done for the following purposes –
1. Strategic planning of Anhui Anke BioTech Group
2. Improving business portfolio management of Anhui Anke BioTech Group
3. Assessing feasibility of the new initiative in China
4. Making a Biotechnology & Drugs sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Anhui Anke BioTech Group
Strengths of Anhui Anke BioTech Group | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Anhui Anke BioTech Group are -
Organizational Resilience of Anhui Anke BioTech Group
– The covid-19 pandemic has put organizational resilience at the centre of everthing Anhui Anke BioTech Group does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Anhui Anke BioTech Group has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Biotechnology & Drugs industry. Secondly the value chain collaborators of Anhui Anke BioTech Group have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Anhui Anke BioTech Group has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Anhui Anke BioTech Group 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.
Strong track record of project management in the Biotechnology & Drugs industry
– Anhui Anke BioTech Group is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Anhui Anke BioTech Group 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.
Digital Transformation in Biotechnology & Drugs industry
- digital transformation varies from industry to industry. For Anhui Anke BioTech Group digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Anhui Anke BioTech Group 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.
High brand equity
– Anhui Anke BioTech Group has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Anhui Anke BioTech Group to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Anhui Anke BioTech Group has one of the best training and development program in Healthcare industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to lead change in Biotechnology & Drugs
– Anhui Anke BioTech Group is one of the leading players in the Biotechnology & Drugs industry in China. Over the years it has not only transformed the business landscape in the Biotechnology & Drugs industry in China but also across the existing markets. The ability to lead change has enabled Anhui Anke BioTech Group in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Anhui Anke BioTech Group in the Healthcare sector have low bargaining power. Anhui Anke BioTech Group has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Anhui Anke BioTech Group to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Anhui Anke BioTech Group is one of the leading players in the Biotechnology & Drugs industry in China. It is in a position to attract the best talent available in China. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Anhui Anke BioTech Group is one of the most innovative firm in Biotechnology & Drugs sector.
Weaknesses of Anhui Anke BioTech Group | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Anhui Anke BioTech Group are -
Employees’ less understanding of Anhui Anke BioTech Group strategy
– From the outside it seems that the employees of Anhui Anke BioTech Group 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.
Slow decision making process
– As mentioned earlier in the report, Anhui Anke BioTech Group has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Biotechnology & Drugs industry over the last five years. Anhui Anke BioTech Group 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.
Products dominated business model
– Even though Anhui Anke BioTech Group has some of the most successful models in the Biotechnology & Drugs industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Anhui Anke BioTech Group should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Anhui Anke BioTech Group 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.
Aligning sales with marketing
– From the outside it seems that Anhui Anke BioTech Group needs to have more collaboration between its sales team and marketing team. Sales professionals in the Biotechnology & Drugs industry have deep experience in developing customer relationships. Marketing department at Anhui Anke BioTech Group can leverage the sales team experience to cultivate customer relationships as Anhui Anke BioTech Group is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee of Anhui Anke BioTech Group is just above the Biotechnology & Drugs industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High dependence on Anhui Anke BioTech Group ‘s star products
– The top 2 products and services of Anhui Anke BioTech Group still accounts for major business revenue. This dependence on star products in Biotechnology & Drugs industry has resulted into insufficient focus on developing new products, even though Anhui Anke BioTech Group has relatively successful track record of launching new products.
Lack of clear differentiation of Anhui Anke BioTech Group products
– To increase the profitability and margins on the products, Anhui Anke BioTech Group needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Anhui Anke BioTech Group is dominated by functional specialists. It is not different from other players in the Biotechnology & Drugs industry, but Anhui Anke BioTech Group needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Anhui Anke BioTech Group to focus more on services in the Biotechnology & Drugs industry rather than just following the product oriented approach.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Anhui Anke BioTech Group supply chain. Even after few cautionary changes, Anhui Anke BioTech Group is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Anhui Anke BioTech Group vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Anhui Anke BioTech Group is slow explore the new channels of communication. These new channels of communication can help Anhui Anke BioTech Group to provide better information regarding Biotechnology & Drugs products and services. It can also build an online community to further reach out to potential customers.
Anhui Anke BioTech Group Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Anhui Anke BioTech Group are -
Better consumer reach
– The expansion of the 5G network will help Anhui Anke BioTech Group to increase its market reach. Anhui Anke BioTech Group 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Anhui Anke BioTech Group can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Building a culture of innovation
– managers at Anhui Anke BioTech Group can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Biotechnology & Drugs industry.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Anhui Anke BioTech Group can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help Anhui Anke BioTech Group to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Anhui Anke BioTech Group 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 Anhui Anke BioTech Group to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Anhui Anke BioTech Group can use these opportunities to build new business models that can help the communities that Anhui Anke BioTech Group operates in. Secondly it can use opportunities from government spending in Biotechnology & Drugs sector.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Anhui Anke BioTech Group can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Anhui Anke BioTech Group 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Anhui Anke BioTech Group is facing challenges because of the dominance of functional experts in the organization. Anhui Anke BioTech Group can utilize new technology in the field of Biotechnology & Drugs industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Biotechnology & Drugs industry, but it has also influenced the consumer preferences. Anhui Anke BioTech Group can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Anhui Anke BioTech Group 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.
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 Anhui Anke BioTech Group 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.
Manufacturing automation
– Anhui Anke BioTech Group can use the latest technology developments to improve its manufacturing and designing process in Biotechnology & Drugs 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.
Threats Anhui Anke BioTech Group External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Anhui Anke BioTech Group are -
Environmental challenges
– Anhui Anke BioTech Group 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. Anhui Anke BioTech Group can take advantage of this fund but it will also bring new competitors in the Biotechnology & Drugs industry.
Increasing wage structure of Anhui Anke BioTech Group
– 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 Anhui Anke BioTech Group.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Biotechnology & Drugs industry are lowering. It can presents Anhui Anke BioTech Group with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Biotechnology & Drugs 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. Anhui Anke BioTech Group 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.
Shortening product life cycle
– it is one of the major threat that Anhui Anke BioTech Group is facing in Biotechnology & Drugs sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Anhui Anke BioTech Group business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Anhui Anke BioTech Group needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Biotechnology & Drugs industry regulations.
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 Anhui Anke BioTech Group.
Easy access to finance
– Easy access to finance in Biotechnology & Drugs industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Anhui Anke BioTech Group can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Anhui Anke BioTech Group has witnessed rapid integration of technology during Covid-19 in the Biotechnology & Drugs industry. As one of the leading players in the industry, Anhui Anke BioTech Group needs to keep up with the evolution of technology in the Biotechnology & Drugs sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Stagnating economy with rate increase
– Anhui Anke BioTech Group can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the Biotechnology & Drugs industry.
Consumer confidence and its impact on Anhui Anke BioTech Group demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in Biotechnology & Drugs industry and other sectors.
Weighted SWOT Analysis of Anhui Anke BioTech Group Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Anhui Anke BioTech Group 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 Anhui Anke BioTech Group 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 Anhui Anke BioTech Group 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 Anhui Anke BioTech Group 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 Anhui Anke BioTech Group needs to make to build a sustainable competitive advantage.