China Aluminum Engineering (601068) SWOT Analysis / TOWS Matrix / MBA Resources
Construction Services
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for China Aluminum Engineering (China)
Based on various researches at Oak Spring University , China Aluminum Engineering is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China,
there is backlash against globalization, increasing energy prices, etc
Introduction to SWOT Analysis of China Aluminum Engineering
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that China Aluminum Engineering can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the China Aluminum Engineering, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which China Aluminum Engineering 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 China Aluminum Engineering can be done for the following purposes –
1. Strategic planning of China Aluminum Engineering
2. Improving business portfolio management of China Aluminum Engineering
3. Assessing feasibility of the new initiative in China
4. Making a Construction Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of China Aluminum Engineering
Strengths of China Aluminum Engineering | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of China Aluminum Engineering are -
Ability to recruit top talent
– China Aluminum Engineering is one of the leading players in the Construction 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.
Analytics focus
– China Aluminum Engineering 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 Construction 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.
Low bargaining power of suppliers
– Suppliers of China Aluminum Engineering in the Capital Goods sector have low bargaining power. China Aluminum Engineering has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps China Aluminum Engineering to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Construction Services industry
- digital transformation varies from industry to industry. For China Aluminum Engineering digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. China Aluminum Engineering 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
– China Aluminum Engineering is one of the most innovative firm in Construction Services sector.
Successful track record of launching new products
– China Aluminum Engineering has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. China Aluminum Engineering 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
– China Aluminum Engineering 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.
Organizational Resilience of China Aluminum Engineering
– The covid-19 pandemic has put organizational resilience at the centre of everthing China Aluminum Engineering does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of China Aluminum Engineering in Construction Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- China Aluminum Engineering 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 China Aluminum Engineering is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at China Aluminum Engineering emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– China Aluminum Engineering has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Construction Services industry. Secondly the value chain collaborators of China Aluminum Engineering have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Construction Services
– China Aluminum Engineering is one of the leading players in the Construction Services industry in China. Over the years it has not only transformed the business landscape in the Construction Services industry in China but also across the existing markets. The ability to lead change has enabled China Aluminum Engineering in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses of China Aluminum Engineering | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of China Aluminum Engineering are -
Lack of clear differentiation of China Aluminum Engineering products
– To increase the profitability and margins on the products, China Aluminum Engineering 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 China Aluminum Engineering, in the dynamic environment of Construction Services industry it has struggled to respond to the nimble upstart competition. China Aluminum Engineering has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
China Aluminum Engineering has a high cash cycle compare to other players in the Construction Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Employees’ less understanding of China Aluminum Engineering strategy
– From the outside it seems that the employees of China Aluminum Engineering 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 to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, China Aluminum Engineering is slow explore the new channels of communication. These new channels of communication can help China Aluminum Engineering to provide better information regarding Construction Services products and services. It can also build an online community to further reach out to potential customers.
High bargaining power of channel partners in Construction Services industry
– because of the regulatory requirements in China, China Aluminum Engineering 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 Construction Services industry.
Aligning sales with marketing
– From the outside it seems that China Aluminum Engineering needs to have more collaboration between its sales team and marketing team. Sales professionals in the Construction Services industry have deep experience in developing customer relationships. Marketing department at China Aluminum Engineering can leverage the sales team experience to cultivate customer relationships as China Aluminum Engineering is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of China Aluminum Engineering is dominated by functional specialists. It is not different from other players in the Construction Services industry, but China Aluminum Engineering needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help China Aluminum Engineering to focus more on services in the Construction Services 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 China Aluminum Engineering supply chain. Even after few cautionary changes, China Aluminum Engineering is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left China Aluminum Engineering vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, China Aluminum Engineering has high operating costs in the Construction Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract China Aluminum Engineering lucrative customers.
Slow to strategic competitive environment developments
– As China Aluminum Engineering is one of the leading players in the Construction Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Construction Services industry in last five years.
China Aluminum Engineering Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of China Aluminum Engineering are -
Developing new processes and practices
– China Aluminum Engineering can develop new processes and procedures in Construction 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, China Aluminum Engineering 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, China Aluminum Engineering 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 China Aluminum Engineering to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– China Aluminum Engineering has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Construction Services sector. This continuous investment in analytics has enabled China Aluminum Engineering to build a competitive advantage using analytics. The analytics driven competitive advantage can help China Aluminum Engineering to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help China Aluminum Engineering to increase its market reach. China Aluminum Engineering 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.
Buying journey improvements
– China Aluminum Engineering can improve the customer journey of consumers in the Construction 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for China Aluminum Engineering in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Construction Services industry, and it will provide faster access to the consumers.
Learning at scale
– Online learning technologies has now opened space for China Aluminum Engineering 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Construction Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. China Aluminum Engineering 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. China Aluminum Engineering 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.
Use of Bitcoin and other crypto currencies for transactions in Construction Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for China Aluminum Engineering in the Construction Services industry. Now China Aluminum Engineering can target international markets with far fewer capital restrictions requirements than the existing system.
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. China Aluminum Engineering can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at China Aluminum Engineering 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 Construction Services industry.
Creating value in data economy
– The success of analytics program of China Aluminum Engineering has opened avenues for new revenue streams for the organization in Construction Services industry. This can help China Aluminum Engineering to build a more holistic ecosystem for China Aluminum Engineering products in the Construction Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats China Aluminum Engineering External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of China Aluminum Engineering are -
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. China Aluminum Engineering needs to understand the core reasons impacting the Construction Services industry. This will help it in building a better workplace.
Environmental challenges
– China Aluminum Engineering 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. China Aluminum Engineering can take advantage of this fund but it will also bring new competitors in the Construction Services industry.
Regulatory challenges
– China Aluminum Engineering 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 Construction Services industry regulations.
Technology acceleration in Forth Industrial Revolution
– China Aluminum Engineering has witnessed rapid integration of technology during Covid-19 in the Construction Services industry. As one of the leading players in the industry, China Aluminum Engineering needs to keep up with the evolution of technology in the Construction Services 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.
Consumer confidence and its impact on China Aluminum Engineering 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 Construction Services industry and other sectors.
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 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for China Aluminum Engineering in Construction Services industry. The Construction 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.
High dependence on third party suppliers
– China Aluminum Engineering high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Increasing wage structure of China Aluminum Engineering
– 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 China Aluminum Engineering.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, China Aluminum Engineering 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 China Aluminum Engineering prominent markets.
Easy access to finance
– Easy access to finance in Construction Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. China Aluminum Engineering can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Construction Services industry are lowering. It can presents China Aluminum Engineering with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Construction Services sector.
Weighted SWOT Analysis of China Aluminum Engineering Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at China Aluminum Engineering 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 China Aluminum Engineering 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 China Aluminum Engineering 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 China Aluminum Engineering 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 China Aluminum Engineering needs to make to build a sustainable competitive advantage.