SWOT Analysis / TOWS Matrix for Huafa Industrial Zhuhai (China)
Based on various researches at Oak Spring University , Huafa Industrial Zhuhai is operating in a macro-environment that has been destablized by – there is backlash against globalization, geopolitical disruptions, increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, increasing transportation and logistics costs,
digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Huafa Industrial Zhuhai
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Huafa Industrial Zhuhai can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Huafa Industrial Zhuhai, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Huafa Industrial Zhuhai 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 Huafa Industrial Zhuhai can be done for the following purposes –
1. Strategic planning of Huafa Industrial Zhuhai
2. Improving business portfolio management of Huafa Industrial Zhuhai
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 Huafa Industrial Zhuhai
Strengths of Huafa Industrial Zhuhai | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Huafa Industrial Zhuhai are -
– The operational resilience strategy of Huafa Industrial Zhuhai comprises – understanding the underlying the factors in the Construction Services industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Strong track record of project management in the Construction Services industry
– Huafa Industrial Zhuhai is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Huafa Industrial Zhuhai is present in almost all the verticals within the Construction Services industry. This has provided Huafa Industrial Zhuhai 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.
Ability to lead change in Construction Services
– Huafa Industrial Zhuhai 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 Huafa Industrial Zhuhai in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Huafa Industrial Zhuhai in the Capital Goods sector have low bargaining power. Huafa Industrial Zhuhai has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Huafa Industrial Zhuhai to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Huafa Industrial Zhuhai has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Huafa Industrial Zhuhai 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.
Effective Research and Development (R&D)
– Huafa Industrial Zhuhai has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Huafa Industrial Zhuhai staying ahead in the Construction Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Huafa Industrial Zhuhai 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.
Cross disciplinary teams
– Horizontal connected teams at the Huafa Industrial Zhuhai 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.
Organizational Resilience of Huafa Industrial Zhuhai
– The covid-19 pandemic has put organizational resilience at the centre of everthing Huafa Industrial Zhuhai does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Construction Services industry
- digital transformation varies from industry to industry. For Huafa Industrial Zhuhai digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Huafa Industrial Zhuhai 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.
Highly skilled collaborators
– Huafa Industrial Zhuhai 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 Huafa Industrial Zhuhai have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses of Huafa Industrial Zhuhai | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Huafa Industrial Zhuhai are -
High operating costs
– Compare to the competitors, Huafa Industrial Zhuhai 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 Huafa Industrial Zhuhai lucrative customers.
Need for greater diversity
– Huafa Industrial Zhuhai 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 cash cycle compare to competitors
Huafa Industrial Zhuhai 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Huafa Industrial Zhuhai is slow explore the new channels of communication. These new channels of communication can help Huafa Industrial Zhuhai to provide better information regarding Construction Services products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring in Construction Services industry
– The stress on hiring functional specialists at Huafa Industrial Zhuhai 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.
Increasing silos among functional specialists
– The organizational structure of Huafa Industrial Zhuhai is dominated by functional specialists. It is not different from other players in the Construction Services industry, but Huafa Industrial Zhuhai needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Huafa Industrial Zhuhai to focus more on services in the Construction Services industry rather than just following the product oriented approach.
Aligning sales with marketing
– From the outside it seems that Huafa Industrial Zhuhai 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 Huafa Industrial Zhuhai can leverage the sales team experience to cultivate customer relationships as Huafa Industrial Zhuhai is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative at Huafa Industrial Zhuhai, in the dynamic environment of Construction Services industry it has struggled to respond to the nimble upstart competition. Huafa Industrial Zhuhai has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on Huafa Industrial Zhuhai ‘s star products
– The top 2 products and services of Huafa Industrial Zhuhai still accounts for major business revenue. This dependence on star products in Construction Services industry has resulted into insufficient focus on developing new products, even though Huafa Industrial Zhuhai has relatively successful track record of launching new products.
High bargaining power of channel partners in Construction Services industry
– because of the regulatory requirements in China, Huafa Industrial Zhuhai 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.
Employees’ less understanding of Huafa Industrial Zhuhai strategy
– From the outside it seems that the employees of Huafa Industrial Zhuhai 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.
Huafa Industrial Zhuhai Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Huafa Industrial Zhuhai are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Huafa Industrial Zhuhai 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Huafa Industrial Zhuhai can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Huafa Industrial Zhuhai 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.
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 Huafa Industrial Zhuhai 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 Construction Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Huafa Industrial Zhuhai 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. Huafa Industrial Zhuhai 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.
– Huafa Industrial Zhuhai 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. Huafa Industrial Zhuhai can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Huafa Industrial Zhuhai is facing challenges because of the dominance of functional experts in the organization. Huafa Industrial Zhuhai can utilize new technology in the field of Construction Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Building a culture of innovation
– managers at Huafa Industrial Zhuhai 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Huafa Industrial Zhuhai can use these opportunities to build new business models that can help the communities that Huafa Industrial Zhuhai operates in. Secondly it can use opportunities from government spending in Construction Services sector.
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 Huafa Industrial Zhuhai in the Construction Services industry. Now Huafa Industrial Zhuhai can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Huafa Industrial Zhuhai 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 Huafa Industrial Zhuhai to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Huafa Industrial Zhuhai 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 Huafa Industrial Zhuhai to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Huafa Industrial Zhuhai External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Huafa Industrial Zhuhai are -
Consumer confidence and its impact on Huafa Industrial Zhuhai 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.
Shortening product life cycle
– it is one of the major threat that Huafa Industrial Zhuhai is facing in Construction Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Huafa Industrial Zhuhai 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 Construction Services industry.
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. Huafa Industrial Zhuhai can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
– 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 Huafa Industrial Zhuhai in the Construction Services sector and impact the bottomline of the organization.
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. Huafa Industrial Zhuhai needs to understand the core reasons impacting the Construction Services industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Huafa Industrial Zhuhai may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Construction Services sector.
Increasing wage structure of Huafa Industrial Zhuhai
– 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 Huafa Industrial Zhuhai.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Huafa Industrial Zhuhai 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.
– Huafa Industrial Zhuhai 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. Huafa Industrial Zhuhai can take advantage of this fund but it will also bring new competitors in the Construction Services industry.
High dependence on third party suppliers
– Huafa Industrial Zhuhai 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 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Huafa Industrial Zhuhai 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 Huafa Industrial Zhuhai prominent markets.
Weighted SWOT Analysis of Huafa Industrial Zhuhai Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Huafa Industrial Zhuhai 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 Huafa Industrial Zhuhai 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 Huafa Industrial Zhuhai 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 Huafa Industrial Zhuhai 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 Huafa Industrial Zhuhai needs to make to build a sustainable competitive advantage.