China CYTS Tours (600138) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for China CYTS Tours (China)

Based on various researches at Oak Spring University , China CYTS Tours is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, there is backlash against globalization, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, there is increasing trade war between United States & China, etc

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Introduction to SWOT Analysis of China CYTS Tours

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that China CYTS Tours can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the China CYTS Tours, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which China CYTS Tours operates in.

According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of China CYTS Tours can be done for the following purposes –
1. Strategic planning of China CYTS Tours
2. Improving business portfolio management of China CYTS Tours
3. Assessing feasibility of the new initiative in China
4. Making a Personal Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of China CYTS Tours

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Strengths of China CYTS Tours | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of China CYTS Tours are -

High brand equity

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

Learning organization

- China CYTS Tours 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 China CYTS Tours is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at China CYTS Tours emphasize – knowledge, initiative, and innovation.

Sustainable margins compare to other players in Personal Services industry

– China CYTS Tours has clearly differentiated products in the market place. This has enabled China CYTS Tours to fetch slight price premium compare to the competitors in the Personal Services industry. The sustainable margins have also helped China CYTS Tours to invest into research and development (R&D) and innovation.

Superior customer experience

– The customer experience strategy of China CYTS Tours in Personal Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Ability to recruit top talent

– China CYTS Tours is one of the leading players in the Personal 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.

Highly skilled collaborators

– China CYTS Tours has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Personal Services industry. Secondly the value chain collaborators of China CYTS Tours have helped the firm to develop new products and bring them quickly to the marketplace.

Strong track record of project management in the Personal Services industry

– China CYTS Tours is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Cross disciplinary teams

– Horizontal connected teams at the China CYTS Tours 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 China CYTS Tours 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.

Effective Research and Development (R&D)

– China CYTS Tours has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – China CYTS Tours staying ahead in the Personal Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Organizational Resilience of China CYTS Tours

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

Training and development

– China CYTS Tours has one of the best training and development program in Services 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.

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Weaknesses of China CYTS Tours | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of China CYTS Tours are -

Low market penetration in new markets

– Outside its home market of China, China CYTS Tours needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Skills based hiring in Personal Services industry

– The stress on hiring functional specialists at China CYTS Tours 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 China CYTS Tours is dominated by functional specialists. It is not different from other players in the Personal Services industry, but China CYTS Tours needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help China CYTS Tours to focus more on services in the Personal Services industry rather than just following the product oriented approach.

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

Aligning sales with marketing

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

Interest costs

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

High dependence on China CYTS Tours ‘s star products

– The top 2 products and services of China CYTS Tours still accounts for major business revenue. This dependence on star products in Personal Services industry has resulted into insufficient focus on developing new products, even though China CYTS Tours has relatively successful track record of launching new products.

Ability to respond to the competition

– As the decision making is very deliberative at China CYTS Tours, in the dynamic environment of Personal Services industry it has struggled to respond to the nimble upstart competition. China CYTS Tours has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

No frontier risks strategy

– From the 10K / annual statement of China CYTS Tours, it seems that company is thinking out the frontier risks that can impact Personal Services 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 harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, China CYTS Tours is slow explore the new channels of communication. These new channels of communication can help China CYTS Tours to provide better information regarding Personal Services products and services. It can also build an online community to further reach out to potential customers.

Slow decision making process

– As mentioned earlier in the report, China CYTS Tours has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Personal Services industry over the last five years. China CYTS Tours 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.

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China CYTS Tours Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of China CYTS Tours are -

Low interest rates

– Even though inflation is raising its head in most developed economies, China CYTS Tours 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.

Loyalty marketing

– China CYTS Tours 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.

Creating value in data economy

– The success of analytics program of China CYTS Tours has opened avenues for new revenue streams for the organization in Personal Services industry. This can help China CYTS Tours to build a more holistic ecosystem for China CYTS Tours products in the Personal Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Manufacturing automation

– China CYTS Tours can use the latest technology developments to improve its manufacturing and designing process in Personal Services 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, China CYTS Tours is facing challenges because of the dominance of functional experts in the organization. China CYTS Tours can utilize new technology in the field of Personal Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects China CYTS Tours can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for China CYTS Tours 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 China CYTS Tours 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, China CYTS Tours 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 China CYTS Tours to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Lowering marketing communication costs

– 5G expansion will open new opportunities for China CYTS Tours in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Personal Services industry, and it will provide faster access to the consumers.

Better consumer reach

– The expansion of the 5G network will help China CYTS Tours to increase its market reach. China CYTS Tours 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.

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. China CYTS Tours can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Developing new processes and practices

– China CYTS Tours can develop new processes and procedures in Personal 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, China CYTS Tours can use these opportunities to build new business models that can help the communities that China CYTS Tours operates in. Secondly it can use opportunities from government spending in Personal Services sector.

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Threats China CYTS Tours External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of China CYTS Tours are -

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.

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. China CYTS Tours needs to understand the core reasons impacting the Personal Services industry. This will help it in building a better workplace.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for China CYTS Tours in Personal Services industry. The Personal 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.

High dependence on third party suppliers

– China CYTS Tours 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.

Environmental challenges

– China CYTS Tours 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. China CYTS Tours can take advantage of this fund but it will also bring new competitors in the Personal Services industry.

Consumer confidence and its impact on China CYTS Tours 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 Personal Services industry and other sectors.

Technology acceleration in Forth Industrial Revolution

– China CYTS Tours has witnessed rapid integration of technology during Covid-19 in the Personal Services industry. As one of the leading players in the industry, China CYTS Tours needs to keep up with the evolution of technology in the Personal Services 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.

Increasing wage structure of China CYTS Tours

– 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 China CYTS Tours.

Shortening product life cycle

– it is one of the major threat that China CYTS Tours is facing in Personal Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, China CYTS Tours 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 China CYTS Tours prominent markets.

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 China CYTS Tours in the Personal Services sector and impact the bottomline of the organization.

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. China CYTS Tours 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.

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 China CYTS Tours.

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Weighted SWOT Analysis of China CYTS Tours Template, Example

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

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