SWOT Analysis / TOWS Matrix for Zhejiang Shenghua Biok (China)
Based on various researches at Oak Spring University , Zhejiang Shenghua Biok is operating in a macro-environment that has been destablized by – cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings,
increasing energy prices, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Zhejiang Shenghua Biok
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Zhejiang Shenghua Biok can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Zhejiang Shenghua Biok, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Zhejiang Shenghua Biok 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 Zhejiang Shenghua Biok can be done for the following purposes –
1. Strategic planning of Zhejiang Shenghua Biok
2. Improving business portfolio management of Zhejiang Shenghua Biok
3. Assessing feasibility of the new initiative in China
4. Making a Chemical Manufacturing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Zhejiang Shenghua Biok
Strengths of Zhejiang Shenghua Biok | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Zhejiang Shenghua Biok are -
Superior customer experience
– The customer experience strategy of Zhejiang Shenghua Biok in Chemical Manufacturing industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Zhejiang Shenghua Biok
– The covid-19 pandemic has put organizational resilience at the centre of everthing Zhejiang Shenghua Biok 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
– Zhejiang Shenghua Biok has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Zhejiang Shenghua Biok 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)
– Zhejiang Shenghua Biok has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Zhejiang Shenghua Biok staying ahead in the Chemical Manufacturing industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Chemical Manufacturing
– Zhejiang Shenghua Biok is one of the leading players in the Chemical Manufacturing industry in China. Over the years it has not only transformed the business landscape in the Chemical Manufacturing industry in China but also across the existing markets. The ability to lead change has enabled Zhejiang Shenghua Biok in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Zhejiang Shenghua Biok is present in almost all the verticals within the Chemical Manufacturing industry. This has provided Zhejiang Shenghua Biok 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.
Training and development
– Zhejiang Shenghua Biok has one of the best training and development program in Basic Materials 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.
Cross disciplinary teams
– Horizontal connected teams at the Zhejiang Shenghua Biok 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.
Operational resilience
– The operational resilience strategy of Zhejiang Shenghua Biok comprises – understanding the underlying the factors in the Chemical Manufacturing 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.
Ability to recruit top talent
– Zhejiang Shenghua Biok is one of the leading players in the Chemical Manufacturing 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.
High brand equity
– Zhejiang Shenghua Biok has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Zhejiang Shenghua Biok to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Chemical Manufacturing industry
– Zhejiang Shenghua Biok has clearly differentiated products in the market place. This has enabled Zhejiang Shenghua Biok to fetch slight price premium compare to the competitors in the Chemical Manufacturing industry. The sustainable margins have also helped Zhejiang Shenghua Biok to invest into research and development (R&D) and innovation.
Weaknesses of Zhejiang Shenghua Biok | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Zhejiang Shenghua Biok are -
Products dominated business model
– Even though Zhejiang Shenghua Biok has some of the most successful models in the Chemical Manufacturing industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Zhejiang Shenghua Biok should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative at Zhejiang Shenghua Biok, in the dynamic environment of Chemical Manufacturing industry it has struggled to respond to the nimble upstart competition. Zhejiang Shenghua Biok has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– From the outside it seems that Zhejiang Shenghua Biok needs to have more collaboration between its sales team and marketing team. Sales professionals in the Chemical Manufacturing industry have deep experience in developing customer relationships. Marketing department at Zhejiang Shenghua Biok can leverage the sales team experience to cultivate customer relationships as Zhejiang Shenghua Biok is planning to shift buying processes online.
High bargaining power of channel partners in Chemical Manufacturing industry
– because of the regulatory requirements in China, Zhejiang Shenghua Biok 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 Chemical Manufacturing industry.
Slow decision making process
– As mentioned earlier in the report, Zhejiang Shenghua Biok has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Chemical Manufacturing industry over the last five years. Zhejiang Shenghua Biok 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.
Skills based hiring in Chemical Manufacturing industry
– The stress on hiring functional specialists at Zhejiang Shenghua Biok 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.
High dependence on Zhejiang Shenghua Biok ‘s star products
– The top 2 products and services of Zhejiang Shenghua Biok still accounts for major business revenue. This dependence on star products in Chemical Manufacturing industry has resulted into insufficient focus on developing new products, even though Zhejiang Shenghua Biok has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Zhejiang Shenghua Biok is dominated by functional specialists. It is not different from other players in the Chemical Manufacturing industry, but Zhejiang Shenghua Biok needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Zhejiang Shenghua Biok to focus more on services in the Chemical Manufacturing industry rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Zhejiang Shenghua Biok 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 Chemical Manufacturing industry using digital technology.
Interest costs
– Compare to the competition, Zhejiang Shenghua Biok 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.
Employees’ less understanding of Zhejiang Shenghua Biok strategy
– From the outside it seems that the employees of Zhejiang Shenghua Biok 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.
Zhejiang Shenghua Biok Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Zhejiang Shenghua Biok are -
Learning at scale
– Online learning technologies has now opened space for Zhejiang Shenghua Biok 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.
Use of Bitcoin and other crypto currencies for transactions in Chemical Manufacturing industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Zhejiang Shenghua Biok in the Chemical Manufacturing industry. Now Zhejiang Shenghua Biok can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Zhejiang Shenghua Biok has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Chemical Manufacturing sector. This continuous investment in analytics has enabled Zhejiang Shenghua Biok to build a competitive advantage using analytics. The analytics driven competitive advantage can help Zhejiang Shenghua Biok to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Zhejiang Shenghua Biok 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 Chemical Manufacturing industry.
Low interest rates
– Even though inflation is raising its head in most developed economies, Zhejiang Shenghua Biok 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Zhejiang Shenghua Biok is facing challenges because of the dominance of functional experts in the organization. Zhejiang Shenghua Biok can utilize new technology in the field of Chemical Manufacturing industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Zhejiang Shenghua Biok in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Chemical Manufacturing industry, and it will provide faster access to the consumers.
Developing new processes and practices
– Zhejiang Shenghua Biok can develop new processes and procedures in Chemical Manufacturing 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Chemical Manufacturing industry, but it has also influenced the consumer preferences. Zhejiang Shenghua Biok 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
– Zhejiang Shenghua Biok 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.
Better consumer reach
– The expansion of the 5G network will help Zhejiang Shenghua Biok to increase its market reach. Zhejiang Shenghua Biok 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Zhejiang Shenghua Biok 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 Zhejiang Shenghua Biok to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Zhejiang Shenghua Biok can use these opportunities to build new business models that can help the communities that Zhejiang Shenghua Biok operates in. Secondly it can use opportunities from government spending in Chemical Manufacturing sector.
Threats Zhejiang Shenghua Biok External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Zhejiang Shenghua Biok are -
Stagnating economy with rate increase
– Zhejiang Shenghua Biok 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 Chemical Manufacturing industry.
Consumer confidence and its impact on Zhejiang Shenghua Biok 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 Chemical Manufacturing industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Zhejiang Shenghua Biok may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Chemical Manufacturing sector.
Increasing wage structure of Zhejiang Shenghua Biok
– 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 Zhejiang Shenghua Biok.
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.
Environmental challenges
– Zhejiang Shenghua Biok 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. Zhejiang Shenghua Biok can take advantage of this fund but it will also bring new competitors in the Chemical Manufacturing industry.
Easy access to finance
– Easy access to finance in Chemical Manufacturing industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Zhejiang Shenghua Biok can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Zhejiang Shenghua Biok.
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 Zhejiang Shenghua Biok business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Zhejiang Shenghua Biok in Chemical Manufacturing industry. The Chemical Manufacturing 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.
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. Zhejiang Shenghua Biok 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Zhejiang Shenghua Biok 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 Zhejiang Shenghua Biok prominent markets.
Technology acceleration in Forth Industrial Revolution
– Zhejiang Shenghua Biok has witnessed rapid integration of technology during Covid-19 in the Chemical Manufacturing industry. As one of the leading players in the industry, Zhejiang Shenghua Biok needs to keep up with the evolution of technology in the Chemical Manufacturing 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.
Weighted SWOT Analysis of Zhejiang Shenghua Biok Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Zhejiang Shenghua Biok 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 Zhejiang Shenghua Biok 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 Zhejiang Shenghua Biok 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 Zhejiang Shenghua Biok 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 Zhejiang Shenghua Biok needs to make to build a sustainable competitive advantage.
