Shanghai DaZhong Public Utilities (600635) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Shanghai DaZhong Public Utilities (China)

Based on various researches at Oak Spring University , Shanghai DaZhong Public Utilities is operating in a macro-environment that has been destablized by – wage bills are increasing, talent flight as more people leaving formal jobs, increasing energy prices, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, increasing household debt because of falling income levels, geopolitical disruptions, increasing government debt because of Covid-19 spendings, etc

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Introduction to SWOT Analysis of Shanghai DaZhong Public Utilities

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

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Strengths of Shanghai DaZhong Public Utilities | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Shanghai DaZhong Public Utilities are -

Innovation driven organization

– Shanghai DaZhong Public Utilities is one of the most innovative firm in Natural Gas Utilities sector.

Effective Research and Development (R&D)

– Shanghai DaZhong Public Utilities has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Shanghai DaZhong Public Utilities staying ahead in the Natural Gas Utilities industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Diverse revenue streams

– Shanghai DaZhong Public Utilities is present in almost all the verticals within the Natural Gas Utilities industry. This has provided Shanghai DaZhong Public Utilities 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 DaZhong Public Utilities 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 Natural Gas Utilities 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.

Strong track record of project management in the Natural Gas Utilities industry

– Shanghai DaZhong Public Utilities 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 Natural Gas Utilities

– Shanghai DaZhong Public Utilities is one of the leading players in the Natural Gas Utilities industry in China. Over the years it has not only transformed the business landscape in the Natural Gas Utilities industry in China but also across the existing markets. The ability to lead change has enabled Shanghai DaZhong Public Utilities in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

High brand equity

– Shanghai DaZhong Public Utilities has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Shanghai DaZhong Public Utilities to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Highly skilled collaborators

– Shanghai DaZhong Public Utilities has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Natural Gas Utilities industry. Secondly the value chain collaborators of Shanghai DaZhong Public Utilities have helped the firm to develop new products and bring them quickly to the marketplace.

Sustainable margins compare to other players in Natural Gas Utilities industry

– Shanghai DaZhong Public Utilities has clearly differentiated products in the market place. This has enabled Shanghai DaZhong Public Utilities to fetch slight price premium compare to the competitors in the Natural Gas Utilities industry. The sustainable margins have also helped Shanghai DaZhong Public Utilities to invest into research and development (R&D) and innovation.

Organizational Resilience of Shanghai DaZhong Public Utilities

– The covid-19 pandemic has put organizational resilience at the centre of everthing Shanghai DaZhong Public Utilities 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 Shanghai DaZhong Public Utilities in Natural Gas Utilities industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Digital Transformation in Natural Gas Utilities industry

- digital transformation varies from industry to industry. For Shanghai DaZhong Public Utilities digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shanghai DaZhong Public Utilities 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.

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Weaknesses of Shanghai DaZhong Public Utilities | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Shanghai DaZhong Public Utilities are -

Capital Spending Reduction

– Even during the low interest decade, Shanghai DaZhong Public Utilities has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Natural Gas Utilities industry using digital technology.

Need for greater diversity

– Shanghai DaZhong Public Utilities has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.

Interest costs

– Compare to the competition, Shanghai DaZhong Public Utilities has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.

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

Skills based hiring in Natural Gas Utilities industry

– The stress on hiring functional specialists at Shanghai DaZhong Public Utilities 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.

Employees’ less understanding of Shanghai DaZhong Public Utilities strategy

– From the outside it seems that the employees of Shanghai DaZhong Public Utilities 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.

Workers concerns about automation

– As automation is fast increasing in the Natural Gas Utilities industry, Shanghai DaZhong Public Utilities needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Shanghai DaZhong Public Utilities is slow explore the new channels of communication. These new channels of communication can help Shanghai DaZhong Public Utilities to provide better information regarding Natural Gas Utilities products and services. It can also build an online community to further reach out to potential customers.

Products dominated business model

– Even though Shanghai DaZhong Public Utilities has some of the most successful models in the Natural Gas Utilities industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Shanghai DaZhong Public Utilities should strive to include more intangible value offerings along with its core products and services.

Increasing silos among functional specialists

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

Ability to respond to the competition

– As the decision making is very deliberative at Shanghai DaZhong Public Utilities, in the dynamic environment of Natural Gas Utilities industry it has struggled to respond to the nimble upstart competition. Shanghai DaZhong Public Utilities has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

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Shanghai DaZhong Public Utilities Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Shanghai DaZhong Public Utilities are -

Learning at scale

– Online learning technologies has now opened space for Shanghai DaZhong Public Utilities 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.

Remote work and new talent hiring opportunities

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

Buying journey improvements

– Shanghai DaZhong Public Utilities can improve the customer journey of consumers in the Natural Gas Utilities 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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Natural Gas Utilities industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Shanghai DaZhong Public Utilities 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 DaZhong Public Utilities 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.

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 DaZhong Public Utilities 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

– Shanghai DaZhong Public Utilities can use the latest technology developments to improve its manufacturing and designing process in Natural Gas Utilities 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.

Loyalty marketing

– Shanghai DaZhong Public Utilities 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.

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 DaZhong Public Utilities 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 DaZhong Public Utilities has opened avenues for new revenue streams for the organization in Natural Gas Utilities industry. This can help Shanghai DaZhong Public Utilities to build a more holistic ecosystem for Shanghai DaZhong Public Utilities products in the Natural Gas Utilities industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Using analytics as competitive advantage

– Shanghai DaZhong Public Utilities has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Natural Gas Utilities sector. This continuous investment in analytics has enabled Shanghai DaZhong Public Utilities to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shanghai DaZhong Public Utilities 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 DaZhong Public Utilities can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Low interest rates

– Even though inflation is raising its head in most developed economies, Shanghai DaZhong Public Utilities 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 DaZhong Public Utilities to increase its market reach. Shanghai DaZhong Public Utilities 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.

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Threats Shanghai DaZhong Public Utilities External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Shanghai DaZhong Public Utilities are -

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Shanghai DaZhong Public Utilities 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 DaZhong Public Utilities prominent markets.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Shanghai DaZhong Public Utilities in Natural Gas Utilities industry. The Natural Gas Utilities 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.

Increasing wage structure of Shanghai DaZhong Public Utilities

– 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 DaZhong Public Utilities.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Shanghai DaZhong Public Utilities may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Natural Gas Utilities sector.

Stagnating economy with rate increase

– Shanghai DaZhong Public Utilities 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 Natural Gas Utilities industry.

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 DaZhong Public Utilities 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.

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.

Environmental challenges

– Shanghai DaZhong Public Utilities 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 DaZhong Public Utilities can take advantage of this fund but it will also bring new competitors in the Natural Gas Utilities industry.

Shortening product life cycle

– it is one of the major threat that Shanghai DaZhong Public Utilities is facing in Natural Gas Utilities sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Regulatory challenges

– Shanghai DaZhong Public Utilities 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 Natural Gas Utilities industry regulations.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Natural Gas Utilities industry are lowering. It can presents Shanghai DaZhong Public Utilities with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Natural Gas Utilities 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 DaZhong Public Utilities business can come under increasing regulations regarding data privacy, data security, etc.

New competition

– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Shanghai DaZhong Public Utilities in the Natural Gas Utilities sector and impact the bottomline of the organization.

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Weighted SWOT Analysis of Shanghai DaZhong Public Utilities Template, Example

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

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