Shanghai Mechanical & Electrical A (600835) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Shanghai Mechanical & Electrical A (China)

Based on various researches at Oak Spring University , Shanghai Mechanical & Electrical A is operating in a macro-environment that has been destablized by – geopolitical disruptions, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, technology disruption, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, etc

---

---

---

---

Introduction to SWOT Analysis of Shanghai Mechanical & Electrical A

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

---

Strengths of Shanghai Mechanical & Electrical A | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Shanghai Mechanical & Electrical A are -

Learning organization

- Shanghai Mechanical & Electrical 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 Shanghai Mechanical & Electrical A is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Shanghai Mechanical & Electrical A emphasize – knowledge, initiative, and innovation.

Digital Transformation in Misc. Capital Goods industry

- digital transformation varies from industry to industry. For Shanghai Mechanical & Electrical A digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shanghai Mechanical & Electrical 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.

Innovation driven organization

– Shanghai Mechanical & Electrical A is one of the most innovative firm in Misc. Capital Goods sector.

High switching costs

– The high switching costs that Shanghai Mechanical & Electrical A 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.

Highly skilled collaborators

– Shanghai Mechanical & Electrical A has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Misc. Capital Goods industry. Secondly the value chain collaborators of Shanghai Mechanical & Electrical A have helped the firm to develop new products and bring them quickly to the marketplace.

Effective Research and Development (R&D)

– Shanghai Mechanical & Electrical A has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Shanghai Mechanical & Electrical A staying ahead in the Misc. Capital Goods industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Ability to recruit top talent

– Shanghai Mechanical & Electrical A is one of the leading players in the Misc. Capital Goods 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.

Low bargaining power of suppliers

– Suppliers of Shanghai Mechanical & Electrical A in the Capital Goods sector have low bargaining power. Shanghai Mechanical & Electrical A has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shanghai Mechanical & Electrical A to manage not only supply disruptions but also source products at highly competitive prices.

Analytics focus

– Shanghai Mechanical & Electrical A 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 Misc. Capital Goods 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.

Cross disciplinary teams

– Horizontal connected teams at the Shanghai Mechanical & Electrical A 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.

Strong track record of project management in the Misc. Capital Goods industry

– Shanghai Mechanical & Electrical 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.

Ability to lead change in Misc. Capital Goods

– Shanghai Mechanical & Electrical A is one of the leading players in the Misc. Capital Goods industry in China. Over the years it has not only transformed the business landscape in the Misc. Capital Goods industry in China but also across the existing markets. The ability to lead change has enabled Shanghai Mechanical & Electrical A in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

---

---

Weaknesses of Shanghai Mechanical & Electrical A | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Shanghai Mechanical & Electrical A are -

Low market penetration in new markets

– Outside its home market of China, Shanghai Mechanical & Electrical A needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

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 Shanghai Mechanical & Electrical A supply chain. Even after few cautionary changes, Shanghai Mechanical & Electrical A is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Shanghai Mechanical & Electrical A vulnerable to further global disruptions in South East Asia.

No frontier risks strategy

– From the 10K / annual statement of Shanghai Mechanical & Electrical A, it seems that company is thinking out the frontier risks that can impact Misc. Capital Goods 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.

Need for greater diversity

– Shanghai Mechanical & Electrical 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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Shanghai Mechanical & Electrical A is slow explore the new channels of communication. These new channels of communication can help Shanghai Mechanical & Electrical A to provide better information regarding Misc. Capital Goods products and services. It can also build an online community to further reach out to potential customers.

High cash cycle compare to competitors

Shanghai Mechanical & Electrical A has a high cash cycle compare to other players in the Misc. Capital Goods industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Lack of clear differentiation of Shanghai Mechanical & Electrical A products

– To increase the profitability and margins on the products, Shanghai Mechanical & Electrical A needs to provide more differentiated products than what it is currently offering in the marketplace.

Skills based hiring in Misc. Capital Goods industry

– The stress on hiring functional specialists at Shanghai Mechanical & Electrical A 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.

Compensation and incentives

– The revenue per employee of Shanghai Mechanical & Electrical A is just above the Misc. Capital Goods 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.

Ability to respond to the competition

– As the decision making is very deliberative at Shanghai Mechanical & Electrical A, in the dynamic environment of Misc. Capital Goods industry it has struggled to respond to the nimble upstart competition. Shanghai Mechanical & Electrical A has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

High dependence on Shanghai Mechanical & Electrical A ‘s star products

– The top 2 products and services of Shanghai Mechanical & Electrical A still accounts for major business revenue. This dependence on star products in Misc. Capital Goods industry has resulted into insufficient focus on developing new products, even though Shanghai Mechanical & Electrical A has relatively successful track record of launching new products.

---

Shanghai Mechanical & Electrical A Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Shanghai Mechanical & Electrical A are -

Low interest rates

– Even though inflation is raising its head in most developed economies, Shanghai Mechanical & Electrical A 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.

Better consumer reach

– The expansion of the 5G network will help Shanghai Mechanical & Electrical A to increase its market reach. Shanghai Mechanical & Electrical A 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.

Developing new processes and practices

– Shanghai Mechanical & Electrical A can develop new processes and procedures in Misc. Capital Goods 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.

Buying journey improvements

– Shanghai Mechanical & Electrical A can improve the customer journey of consumers in the Misc. Capital Goods 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.

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. Shanghai Mechanical & Electrical A can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Creating value in data economy

– The success of analytics program of Shanghai Mechanical & Electrical A has opened avenues for new revenue streams for the organization in Misc. Capital Goods industry. This can help Shanghai Mechanical & Electrical A to build a more holistic ecosystem for Shanghai Mechanical & Electrical A products in the Misc. Capital Goods industry by providing – data insight services, data privacy related products, data based consulting services, etc.

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 Shanghai Mechanical & Electrical A 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.

Use of Bitcoin and other crypto currencies for transactions in Misc. Capital Goods industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Shanghai Mechanical & Electrical A in the Misc. Capital Goods industry. Now Shanghai Mechanical & Electrical A can target international markets with far fewer capital restrictions requirements than the existing system.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Shanghai Mechanical & Electrical 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 Shanghai Mechanical & Electrical A to hire the very best people irrespective of their geographical location.

Using analytics as competitive advantage

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

Reforming the budgeting process

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

Manufacturing automation

– Shanghai Mechanical & Electrical A can use the latest technology developments to improve its manufacturing and designing process in Misc. Capital Goods 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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Misc. Capital Goods industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Shanghai Mechanical & Electrical A 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. Shanghai Mechanical & Electrical A 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.

---

Threats Shanghai Mechanical & Electrical A External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Shanghai Mechanical & Electrical A are -

Regulatory challenges

– Shanghai Mechanical & Electrical A 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 Misc. Capital Goods 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.

Technology acceleration in Forth Industrial Revolution

– Shanghai Mechanical & Electrical A has witnessed rapid integration of technology during Covid-19 in the Misc. Capital Goods industry. As one of the leading players in the industry, Shanghai Mechanical & Electrical A needs to keep up with the evolution of technology in the Misc. Capital Goods 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.

Environmental challenges

– Shanghai Mechanical & Electrical A 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. Shanghai Mechanical & Electrical A can take advantage of this fund but it will also bring new competitors in the Misc. Capital Goods industry.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Misc. Capital Goods industry are lowering. It can presents Shanghai Mechanical & Electrical A with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Misc. Capital Goods sector.

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 Shanghai Mechanical & Electrical A business can come under increasing regulations regarding data privacy, data security, etc.

Easy access to finance

– Easy access to finance in Misc. Capital Goods industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Shanghai Mechanical & Electrical A can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Increasing wage structure of Shanghai Mechanical & Electrical 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 Shanghai Mechanical & Electrical A.

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 Shanghai Mechanical & Electrical A.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Shanghai Mechanical & Electrical 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 Shanghai Mechanical & Electrical A prominent markets.

Stagnating economy with rate increase

– Shanghai Mechanical & Electrical 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 Misc. Capital Goods industry.

Consumer confidence and its impact on Shanghai Mechanical & Electrical 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 Misc. Capital Goods industry and other sectors.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Shanghai Mechanical & Electrical 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 Misc. Capital Goods sector.

---

Weighted SWOT Analysis of Shanghai Mechanical & Electrical A Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Shanghai Mechanical & Electrical 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 Shanghai Mechanical & Electrical 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 Shanghai Mechanical & Electrical 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 Shanghai Mechanical & Electrical 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 Shanghai Mechanical & Electrical A needs to make to build a sustainable competitive advantage.

--- ---