Changzhou Xingyu Auto Lighting (601799) SWOT Analysis / TOWS Matrix / MBA Resources
Auto & Truck Parts
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Changzhou Xingyu Auto Lighting (China)
Based on various researches at Oak Spring University , Changzhou Xingyu Auto Lighting is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, geopolitical disruptions, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, supply chains are disrupted by pandemic ,
increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, etc
Introduction to SWOT Analysis of Changzhou Xingyu Auto Lighting
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Changzhou Xingyu Auto Lighting can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Changzhou Xingyu Auto Lighting, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Changzhou Xingyu Auto Lighting 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 Changzhou Xingyu Auto Lighting can be done for the following purposes –
1. Strategic planning of Changzhou Xingyu Auto Lighting
2. Improving business portfolio management of Changzhou Xingyu Auto Lighting
3. Assessing feasibility of the new initiative in China
4. Making a Auto & Truck Parts sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Changzhou Xingyu Auto Lighting
Strengths of Changzhou Xingyu Auto Lighting | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Changzhou Xingyu Auto Lighting are -
High switching costs
– The high switching costs that Changzhou Xingyu Auto Lighting 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.
Sustainable margins compare to other players in Auto & Truck Parts industry
– Changzhou Xingyu Auto Lighting has clearly differentiated products in the market place. This has enabled Changzhou Xingyu Auto Lighting to fetch slight price premium compare to the competitors in the Auto & Truck Parts industry. The sustainable margins have also helped Changzhou Xingyu Auto Lighting to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Changzhou Xingyu Auto Lighting has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Auto & Truck Parts industry. Secondly the value chain collaborators of Changzhou Xingyu Auto Lighting have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Changzhou Xingyu Auto Lighting has one of the best training and development program in Consumer Cyclical 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.
Superior customer experience
– The customer experience strategy of Changzhou Xingyu Auto Lighting in Auto & Truck Parts industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Changzhou Xingyu Auto Lighting 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 Changzhou Xingyu Auto Lighting is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Changzhou Xingyu Auto Lighting emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Changzhou Xingyu Auto Lighting 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.
Low bargaining power of suppliers
– Suppliers of Changzhou Xingyu Auto Lighting in the Consumer Cyclical sector have low bargaining power. Changzhou Xingyu Auto Lighting has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Changzhou Xingyu Auto Lighting to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Auto & Truck Parts
– Changzhou Xingyu Auto Lighting is one of the leading players in the Auto & Truck Parts industry in China. Over the years it has not only transformed the business landscape in the Auto & Truck Parts industry in China but also across the existing markets. The ability to lead change has enabled Changzhou Xingyu Auto Lighting in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Changzhou Xingyu Auto Lighting has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Changzhou Xingyu Auto Lighting 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.
High brand equity
– Changzhou Xingyu Auto Lighting has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Changzhou Xingyu Auto Lighting to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Changzhou Xingyu Auto Lighting 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 Auto & Truck Parts 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.
Weaknesses of Changzhou Xingyu Auto Lighting | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Changzhou Xingyu Auto Lighting are -
High dependence on Changzhou Xingyu Auto Lighting ‘s star products
– The top 2 products and services of Changzhou Xingyu Auto Lighting still accounts for major business revenue. This dependence on star products in Auto & Truck Parts industry has resulted into insufficient focus on developing new products, even though Changzhou Xingyu Auto Lighting has relatively successful track record of launching new products.
Need for greater diversity
– Changzhou Xingyu Auto Lighting 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, Changzhou Xingyu Auto Lighting is slow explore the new channels of communication. These new channels of communication can help Changzhou Xingyu Auto Lighting to provide better information regarding Auto & Truck Parts products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, Changzhou Xingyu Auto Lighting has high operating costs in the Auto & Truck Parts industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Changzhou Xingyu Auto Lighting lucrative customers.
High bargaining power of channel partners in Auto & Truck Parts industry
– because of the regulatory requirements in China, Changzhou Xingyu Auto Lighting 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 Auto & Truck Parts industry.
Interest costs
– Compare to the competition, Changzhou Xingyu Auto Lighting 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.
Capital Spending Reduction
– Even during the low interest decade, Changzhou Xingyu Auto Lighting 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 Auto & Truck Parts industry using digital technology.
Compensation and incentives
– The revenue per employee of Changzhou Xingyu Auto Lighting is just above the Auto & Truck Parts 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.
Employees’ less understanding of Changzhou Xingyu Auto Lighting strategy
– From the outside it seems that the employees of Changzhou Xingyu Auto Lighting 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.
No frontier risks strategy
– From the 10K / annual statement of Changzhou Xingyu Auto Lighting, it seems that company is thinking out the frontier risks that can impact Auto & Truck Parts 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.
Slow to strategic competitive environment developments
– As Changzhou Xingyu Auto Lighting is one of the leading players in the Auto & Truck Parts industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Auto & Truck Parts industry in last five years.
Changzhou Xingyu Auto Lighting Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Changzhou Xingyu Auto Lighting are -
Loyalty marketing
– Changzhou Xingyu Auto Lighting 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.
Leveraging digital technologies
– Changzhou Xingyu Auto Lighting 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Changzhou Xingyu Auto Lighting can use these opportunities to build new business models that can help the communities that Changzhou Xingyu Auto Lighting operates in. Secondly it can use opportunities from government spending in Auto & Truck Parts sector.
Using analytics as competitive advantage
– Changzhou Xingyu Auto Lighting has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Auto & Truck Parts sector. This continuous investment in analytics has enabled Changzhou Xingyu Auto Lighting to build a competitive advantage using analytics. The analytics driven competitive advantage can help Changzhou Xingyu Auto Lighting to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Changzhou Xingyu Auto Lighting can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Changzhou Xingyu Auto Lighting 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Auto & Truck Parts industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Changzhou Xingyu Auto Lighting 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. Changzhou Xingyu Auto Lighting 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Changzhou Xingyu Auto Lighting 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 Changzhou Xingyu Auto Lighting to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Changzhou Xingyu Auto Lighting can use the latest technology developments to improve its manufacturing and designing process in Auto & Truck Parts 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Changzhou Xingyu Auto Lighting is facing challenges because of the dominance of functional experts in the organization. Changzhou Xingyu Auto Lighting can utilize new technology in the field of Auto & Truck Parts industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Changzhou Xingyu Auto Lighting 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 Changzhou Xingyu Auto Lighting to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Changzhou Xingyu Auto Lighting 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.
Better consumer reach
– The expansion of the 5G network will help Changzhou Xingyu Auto Lighting to increase its market reach. Changzhou Xingyu Auto Lighting 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.
Threats Changzhou Xingyu Auto Lighting External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Changzhou Xingyu Auto Lighting are -
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Changzhou Xingyu Auto Lighting business can come under increasing regulations regarding data privacy, data security, etc.
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. Changzhou Xingyu Auto Lighting 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.
High dependence on third party suppliers
– Changzhou Xingyu Auto Lighting 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.
Technology acceleration in Forth Industrial Revolution
– Changzhou Xingyu Auto Lighting has witnessed rapid integration of technology during Covid-19 in the Auto & Truck Parts industry. As one of the leading players in the industry, Changzhou Xingyu Auto Lighting needs to keep up with the evolution of technology in the Auto & Truck Parts sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Stagnating economy with rate increase
– Changzhou Xingyu Auto Lighting 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 Auto & Truck Parts industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Changzhou Xingyu Auto Lighting 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 Changzhou Xingyu Auto Lighting prominent markets.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Changzhou Xingyu Auto Lighting in Auto & Truck Parts industry. The Auto & Truck Parts 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.
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 Changzhou Xingyu Auto Lighting.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Auto & Truck Parts industry are lowering. It can presents Changzhou Xingyu Auto Lighting with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Auto & Truck Parts sector.
Regulatory challenges
– Changzhou Xingyu Auto Lighting 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 Auto & Truck Parts industry regulations.
Increasing wage structure of Changzhou Xingyu Auto Lighting
– 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 Changzhou Xingyu Auto Lighting.
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. Changzhou Xingyu Auto Lighting needs to understand the core reasons impacting the Auto & Truck Parts industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Changzhou Xingyu Auto Lighting Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Changzhou Xingyu Auto Lighting 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 Changzhou Xingyu Auto Lighting 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 Changzhou Xingyu Auto Lighting 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 Changzhou Xingyu Auto Lighting 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 Changzhou Xingyu Auto Lighting needs to make to build a sustainable competitive advantage.
