SWOT Analysis / TOWS Matrix for Taiyuan Coal Gasification (China)
Based on various researches at Oak Spring University , Taiyuan Coal Gasification is operating in a macro-environment that has been destablized by – geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, there is increasing trade war between United States & China,
increasing transportation and logistics costs, there is backlash against globalization, etc
Introduction to SWOT Analysis of Taiyuan Coal Gasification
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Taiyuan Coal Gasification can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Taiyuan Coal Gasification, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Taiyuan Coal Gasification 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 Taiyuan Coal Gasification can be done for the following purposes –
1. Strategic planning of Taiyuan Coal Gasification
2. Improving business portfolio management of Taiyuan Coal Gasification
3. Assessing feasibility of the new initiative in China
4. Making a Coal sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Taiyuan Coal Gasification
Strengths of Taiyuan Coal Gasification | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Taiyuan Coal Gasification are -
High switching costs
– The high switching costs that Taiyuan Coal Gasification 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.
Learning organization
- Taiyuan Coal Gasification 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 Taiyuan Coal Gasification is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Taiyuan Coal Gasification emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Taiyuan Coal Gasification in Coal industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Taiyuan Coal Gasification 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.
Strong track record of project management in the Coal industry
– Taiyuan Coal Gasification is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Taiyuan Coal Gasification is one of the most innovative firm in Coal sector.
Ability to lead change in Coal
– Taiyuan Coal Gasification is one of the leading players in the Coal industry in China. Over the years it has not only transformed the business landscape in the Coal industry in China but also across the existing markets. The ability to lead change has enabled Taiyuan Coal Gasification in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Taiyuan Coal Gasification has one of the best training and development program in Energy industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Organizational Resilience of Taiyuan Coal Gasification
– The covid-19 pandemic has put organizational resilience at the centre of everthing Taiyuan Coal Gasification does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Taiyuan Coal Gasification in the Energy sector have low bargaining power. Taiyuan Coal Gasification has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Taiyuan Coal Gasification to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy of Taiyuan Coal Gasification comprises – understanding the underlying the factors in the Coal 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.
Analytics focus
– Taiyuan Coal Gasification 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 Coal 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 Taiyuan Coal Gasification | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Taiyuan Coal Gasification are -
Slow decision making process
– As mentioned earlier in the report, Taiyuan Coal Gasification has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Coal industry over the last five years. Taiyuan Coal Gasification even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High operating costs
– Compare to the competitors, Taiyuan Coal Gasification has high operating costs in the Coal industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Taiyuan Coal Gasification lucrative customers.
High dependence on Taiyuan Coal Gasification ‘s star products
– The top 2 products and services of Taiyuan Coal Gasification still accounts for major business revenue. This dependence on star products in Coal industry has resulted into insufficient focus on developing new products, even though Taiyuan Coal Gasification has relatively successful track record of launching new products.
Aligning sales with marketing
– From the outside it seems that Taiyuan Coal Gasification needs to have more collaboration between its sales team and marketing team. Sales professionals in the Coal industry have deep experience in developing customer relationships. Marketing department at Taiyuan Coal Gasification can leverage the sales team experience to cultivate customer relationships as Taiyuan Coal Gasification is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of China, Taiyuan Coal Gasification needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative at Taiyuan Coal Gasification, in the dynamic environment of Coal industry it has struggled to respond to the nimble upstart competition. Taiyuan Coal Gasification has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Taiyuan Coal Gasification supply chain. Even after few cautionary changes, Taiyuan Coal Gasification is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Taiyuan Coal Gasification vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Taiyuan Coal Gasification 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 strategic competitive environment developments
– As Taiyuan Coal Gasification is one of the leading players in the Coal industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Coal industry in last five years.
Capital Spending Reduction
– Even during the low interest decade, Taiyuan Coal Gasification 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 Coal industry using digital technology.
Interest costs
– Compare to the competition, Taiyuan Coal Gasification 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.
Taiyuan Coal Gasification Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Taiyuan Coal Gasification are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Taiyuan Coal Gasification is facing challenges because of the dominance of functional experts in the organization. Taiyuan Coal Gasification can utilize new technology in the field of Coal industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Manufacturing automation
– Taiyuan Coal Gasification can use the latest technology developments to improve its manufacturing and designing process in Coal 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Taiyuan Coal Gasification in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Coal 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. Taiyuan Coal Gasification can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Taiyuan Coal Gasification 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.
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 Taiyuan Coal Gasification 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Coal industry, but it has also influenced the consumer preferences. Taiyuan Coal Gasification can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Taiyuan Coal Gasification can develop new processes and procedures in Coal 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Taiyuan Coal Gasification can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Taiyuan Coal Gasification can use these opportunities to build new business models that can help the communities that Taiyuan Coal Gasification operates in. Secondly it can use opportunities from government spending in Coal sector.
Using analytics as competitive advantage
– Taiyuan Coal Gasification has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Coal sector. This continuous investment in analytics has enabled Taiyuan Coal Gasification to build a competitive advantage using analytics. The analytics driven competitive advantage can help Taiyuan Coal Gasification to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Taiyuan Coal Gasification can improve the customer journey of consumers in the Coal 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 Coal industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Taiyuan Coal Gasification 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. Taiyuan Coal Gasification 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.
Threats Taiyuan Coal Gasification External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Taiyuan Coal Gasification are -
Consumer confidence and its impact on Taiyuan Coal Gasification 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 Coal industry and other sectors.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Taiyuan Coal Gasification 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 Taiyuan Coal Gasification prominent markets.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Coal industry are lowering. It can presents Taiyuan Coal Gasification with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Coal sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Taiyuan Coal Gasification may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Coal sector.
Easy access to finance
– Easy access to finance in Coal industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Taiyuan Coal Gasification can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Taiyuan Coal Gasification in the Coal sector and impact the bottomline of the organization.
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.
High dependence on third party suppliers
– Taiyuan Coal Gasification 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.
Shortening product life cycle
– it is one of the major threat that Taiyuan Coal Gasification is facing in Coal sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Taiyuan Coal Gasification 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 Coal industry regulations.
Technology acceleration in Forth Industrial Revolution
– Taiyuan Coal Gasification has witnessed rapid integration of technology during Covid-19 in the Coal industry. As one of the leading players in the industry, Taiyuan Coal Gasification needs to keep up with the evolution of technology in the Coal 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.
Environmental challenges
– Taiyuan Coal Gasification 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. Taiyuan Coal Gasification can take advantage of this fund but it will also bring new competitors in the Coal industry.
Increasing wage structure of Taiyuan Coal Gasification
– 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 Taiyuan Coal Gasification.
Weighted SWOT Analysis of Taiyuan Coal Gasification Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Taiyuan Coal Gasification 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 Taiyuan Coal Gasification 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 Taiyuan Coal Gasification 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 Taiyuan Coal Gasification 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 Taiyuan Coal Gasification needs to make to build a sustainable competitive advantage.