Shanghai Mechanical & Electrical B (900925) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

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

Based on various researches at Oak Spring University , Shanghai Mechanical & Electrical B is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, increasing energy prices, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, increasing commodity prices, increasing government debt because of Covid-19 spendings, wage bills are increasing, etc

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Introduction to SWOT Analysis of Shanghai Mechanical & Electrical B

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Shanghai Mechanical & Electrical B can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shanghai Mechanical & Electrical B, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shanghai Mechanical & Electrical B operates in.

According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Shanghai Mechanical & Electrical B can be done for the following purposes –
1. Strategic planning of Shanghai Mechanical & Electrical B
2. Improving business portfolio management of Shanghai Mechanical & Electrical B
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 B

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

The strengths of Shanghai Mechanical & Electrical B are -

Innovation driven organization

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

Superior customer experience

– The customer experience strategy of Shanghai Mechanical & Electrical B in Misc. Capital Goods industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Learning organization

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

Effective Research and Development (R&D)

– Shanghai Mechanical & Electrical B 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 B 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.

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

– Shanghai Mechanical & Electrical B is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Highly skilled collaborators

– Shanghai Mechanical & Electrical B 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 B have helped the firm to develop new products and bring them quickly to the marketplace.

Successful track record of launching new products

– Shanghai Mechanical & Electrical B has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Shanghai Mechanical & Electrical B 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.

Training and development

– Shanghai Mechanical & Electrical B has one of the best training and development program in Capital Goods 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.

Diverse revenue streams

– Shanghai Mechanical & Electrical B is present in almost all the verticals within the Misc. Capital Goods industry. This has provided Shanghai Mechanical & Electrical B 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.

Analytics focus

– Shanghai Mechanical & Electrical B 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.

Low bargaining power of suppliers

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

Cross disciplinary teams

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

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

The weaknesses of Shanghai Mechanical & Electrical B are -

Increasing silos among functional specialists

– The organizational structure of Shanghai Mechanical & Electrical B is dominated by functional specialists. It is not different from other players in the Misc. Capital Goods industry, but Shanghai Mechanical & Electrical B needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Shanghai Mechanical & Electrical B to focus more on services in the Misc. Capital Goods industry rather than just following the product oriented approach.

High operating costs

– Compare to the competitors, Shanghai Mechanical & Electrical B has high operating costs in the Misc. Capital Goods industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Shanghai Mechanical & Electrical B lucrative customers.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Shanghai Mechanical & Electrical B is slow explore the new channels of communication. These new channels of communication can help Shanghai Mechanical & Electrical B 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.

Ability to respond to the competition

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

Slow decision making process

– As mentioned earlier in the report, Shanghai Mechanical & Electrical B has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Misc. Capital Goods industry over the last five years. Shanghai Mechanical & Electrical B 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.

Need for greater diversity

– Shanghai Mechanical & Electrical B 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.

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

– The top 2 products and services of Shanghai Mechanical & Electrical B 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 B has relatively successful track record of launching new products.

High bargaining power of channel partners in Misc. Capital Goods industry

– because of the regulatory requirements in China, Shanghai Mechanical & Electrical B 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 Misc. Capital Goods industry.

Aligning sales with marketing

– From the outside it seems that Shanghai Mechanical & Electrical B needs to have more collaboration between its sales team and marketing team. Sales professionals in the Misc. Capital Goods industry have deep experience in developing customer relationships. Marketing department at Shanghai Mechanical & Electrical B can leverage the sales team experience to cultivate customer relationships as Shanghai Mechanical & Electrical B is planning to shift buying processes online.

Compensation and incentives

– The revenue per employee of Shanghai Mechanical & Electrical B 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.

Products dominated business model

– Even though Shanghai Mechanical & Electrical B has some of the most successful models in the Misc. Capital Goods industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Shanghai Mechanical & Electrical B should strive to include more intangible value offerings along with its core products and services.

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

The opportunities of Shanghai Mechanical & Electrical B are -

Building a culture of innovation

– managers at Shanghai Mechanical & Electrical B 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 Misc. Capital Goods industry.

Learning at scale

– Online learning technologies has now opened space for Shanghai Mechanical & Electrical B 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.

Reforming the budgeting process

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

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 B in the Misc. Capital Goods industry. Now Shanghai Mechanical & Electrical B can target international markets with far fewer capital restrictions requirements than the existing system.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Shanghai Mechanical & Electrical B in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Misc. Capital Goods industry, and it will provide faster access to the consumers.

Better consumer reach

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

Remote work and new talent hiring opportunities

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

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 B 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.

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 B can explore opportunities that can attract volunteers and are consistent with its mission and vision.

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 B 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 B 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.

Creating value in data economy

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

Leveraging digital technologies

– Shanghai Mechanical & Electrical B 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.

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

The threats of Shanghai Mechanical & Electrical B are -

Shortening product life cycle

– it is one of the major threat that Shanghai Mechanical & Electrical B is facing in Misc. Capital Goods sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Consumer confidence and its impact on Shanghai Mechanical & Electrical B 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.

Increasing wage structure of Shanghai Mechanical & Electrical B

– 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 B.

Increasing international competition and downward pressure on margins

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

Stagnating economy with rate increase

– Shanghai Mechanical & Electrical B 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.

Technology acceleration in Forth Industrial Revolution

– Shanghai Mechanical & Electrical B 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 B 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.

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 B 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.

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. Shanghai Mechanical & Electrical B 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.

Environmental challenges

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

High dependence on third party suppliers

– Shanghai Mechanical & Electrical B 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.

Regulatory challenges

– Shanghai Mechanical & Electrical B 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.

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.

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 B.

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Weighted SWOT Analysis of Shanghai Mechanical & Electrical B 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 B 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 B 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 B 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 B 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 B needs to make to build a sustainable competitive advantage.

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