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MengDian HuaNeng Power (600863) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for MengDian HuaNeng Power (China)


Based on various researches at Oak Spring University , MengDian HuaNeng Power is operating in a macro-environment that has been destablized by – geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, increasing energy prices, etc



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Introduction to SWOT Analysis of MengDian HuaNeng Power


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




Strengths of MengDian HuaNeng Power | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of MengDian HuaNeng Power are -

High brand equity

– MengDian HuaNeng Power has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled MengDian HuaNeng Power to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Sustainable margins compare to other players in Electric Utilities industry

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

Ability to lead change in Electric Utilities

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

Diverse revenue streams

– MengDian HuaNeng Power is present in almost all the verticals within the Electric Utilities industry. This has provided MengDian HuaNeng Power 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 recruit top talent

– MengDian HuaNeng Power is one of the leading players in the Electric Utilities 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.

Learning organization

- MengDian HuaNeng Power 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 MengDian HuaNeng Power is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at MengDian HuaNeng Power emphasize – knowledge, initiative, and innovation.

Low bargaining power of suppliers

– Suppliers of MengDian HuaNeng Power in the Utilities sector have low bargaining power. MengDian HuaNeng Power has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps MengDian HuaNeng Power to manage not only supply disruptions but also source products at highly competitive prices.

Cross disciplinary teams

– Horizontal connected teams at the MengDian HuaNeng Power 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.

High switching costs

– The high switching costs that MengDian HuaNeng Power 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.

Organizational Resilience of MengDian HuaNeng Power

– The covid-19 pandemic has put organizational resilience at the centre of everthing MengDian HuaNeng Power does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Successful track record of launching new products

– MengDian HuaNeng Power has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. MengDian HuaNeng Power 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.

Analytics focus

– MengDian HuaNeng Power 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 Electric 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.






Weaknesses of MengDian HuaNeng Power | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of MengDian HuaNeng Power are -

High cash cycle compare to competitors

MengDian HuaNeng Power has a high cash cycle compare to other players in the Electric Utilities industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Capital Spending Reduction

– Even during the low interest decade, MengDian HuaNeng Power 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 Electric Utilities industry using digital technology.

Aligning sales with marketing

– From the outside it seems that MengDian HuaNeng Power needs to have more collaboration between its sales team and marketing team. Sales professionals in the Electric Utilities industry have deep experience in developing customer relationships. Marketing department at MengDian HuaNeng Power can leverage the sales team experience to cultivate customer relationships as MengDian HuaNeng Power is planning to shift buying processes online.

Skills based hiring in Electric Utilities industry

– The stress on hiring functional specialists at MengDian HuaNeng Power 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.

Need for greater diversity

– MengDian HuaNeng Power 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.

Products dominated business model

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

High dependence on MengDian HuaNeng Power ‘s star products

– The top 2 products and services of MengDian HuaNeng Power still accounts for major business revenue. This dependence on star products in Electric Utilities industry has resulted into insufficient focus on developing new products, even though MengDian HuaNeng Power has relatively successful track record of launching new products.

Increasing silos among functional specialists

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

Lack of clear differentiation of MengDian HuaNeng Power products

– To increase the profitability and margins on the products, MengDian HuaNeng Power needs to provide more differentiated products than what it is currently offering in the marketplace.

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

Employees’ less understanding of MengDian HuaNeng Power strategy

– From the outside it seems that the employees of MengDian HuaNeng Power 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.




MengDian HuaNeng Power Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The opportunities of MengDian HuaNeng Power are -

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Electric Utilities industry, but it has also influenced the consumer preferences. MengDian HuaNeng Power can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Leveraging digital technologies

– MengDian HuaNeng Power 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.

Building a culture of innovation

– managers at MengDian HuaNeng Power 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 Electric Utilities industry.

Lowering marketing communication costs

– 5G expansion will open new opportunities for MengDian HuaNeng Power in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Electric Utilities industry, and it will provide faster access to the consumers.

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. MengDian HuaNeng Power can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Better consumer reach

– The expansion of the 5G network will help MengDian HuaNeng Power to increase its market reach. MengDian HuaNeng Power 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.

Using analytics as competitive advantage

– MengDian HuaNeng Power has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Electric Utilities sector. This continuous investment in analytics has enabled MengDian HuaNeng Power to build a competitive advantage using analytics. The analytics driven competitive advantage can help MengDian HuaNeng Power to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Learning at scale

– Online learning technologies has now opened space for MengDian HuaNeng Power 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, MengDian HuaNeng Power 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 MengDian HuaNeng Power can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Redefining models of collaboration and team work

– As explained in the weaknesses section, MengDian HuaNeng Power is facing challenges because of the dominance of functional experts in the organization. MengDian HuaNeng Power can utilize new technology in the field of Electric Utilities industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, 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 MengDian HuaNeng Power 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

– MengDian HuaNeng Power can use the latest technology developments to improve its manufacturing and designing process in Electric 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.




Threats MengDian HuaNeng Power External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The threats of MengDian HuaNeng Power are -

High dependence on third party suppliers

– MengDian HuaNeng Power high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.

Regulatory challenges

– MengDian HuaNeng Power 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 Electric Utilities industry regulations.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for MengDian HuaNeng Power in Electric Utilities industry. The Electric 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 MengDian HuaNeng Power

– 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 MengDian HuaNeng Power.

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.

Easy access to finance

– Easy access to finance in Electric Utilities industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. MengDian HuaNeng Power can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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 MengDian HuaNeng Power 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 MengDian HuaNeng Power in the Electric Utilities 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. MengDian HuaNeng Power needs to understand the core reasons impacting the Electric Utilities industry. This will help it in building a better workplace.

Shortening product life cycle

– it is one of the major threat that MengDian HuaNeng Power is facing in Electric Utilities sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Consumer confidence and its impact on MengDian HuaNeng Power 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 Electric Utilities industry and other sectors.

Learning curve for new practices

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

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 MengDian HuaNeng Power.




Weighted SWOT Analysis of MengDian HuaNeng Power Template, Example


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



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