Hisense Kelon A (921) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Hisense Kelon A (China)

Based on various researches at Oak Spring University , Hisense Kelon A is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, there is backlash against globalization, central banks are concerned over increasing inflation, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, increasing energy prices, etc

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Introduction to SWOT Analysis of Hisense Kelon A

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

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Strengths of Hisense Kelon A | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Hisense Kelon A are -

Highly skilled collaborators

– Hisense Kelon A has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Misc. Capital Goods industry. Secondly the value chain collaborators of Hisense Kelon A have helped the firm to develop new products and bring them quickly to the marketplace.

Sustainable margins compare to other players in Misc. Capital Goods industry

– Hisense Kelon A has clearly differentiated products in the market place. This has enabled Hisense Kelon A to fetch slight price premium compare to the competitors in the Misc. Capital Goods industry. The sustainable margins have also helped Hisense Kelon A to invest into research and development (R&D) and innovation.

High switching costs

– The high switching costs that Hisense Kelon A 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

- Hisense Kelon A 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 Hisense Kelon A is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Hisense Kelon A emphasize – knowledge, initiative, and innovation.

Innovation driven organization

– Hisense Kelon A is one of the most innovative firm in Misc. Capital Goods sector.

Analytics focus

– Hisense Kelon A 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 Misc. Capital Goods 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.

Ability to recruit top talent

– Hisense Kelon A is one of the leading players in the Misc. Capital Goods 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.

Diverse revenue streams

– Hisense Kelon A is present in almost all the verticals within the Misc. Capital Goods industry. This has provided Hisense Kelon A 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.

Strong track record of project management in the Misc. Capital Goods industry

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

Ability to lead change in Misc. Capital Goods

– Hisense Kelon A is one of the leading players in the Misc. Capital Goods industry in China. Over the years it has not only transformed the business landscape in the Misc. Capital Goods industry in China but also across the existing markets. The ability to lead change has enabled Hisense Kelon A in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Successful track record of launching new products

– Hisense Kelon A has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hisense Kelon A 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)

– Hisense Kelon A has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Hisense Kelon A staying ahead in the Misc. Capital Goods industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

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Weaknesses of Hisense Kelon A | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Hisense Kelon A are -

Increasing silos among functional specialists

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

Compensation and incentives

– The revenue per employee of Hisense Kelon A is just above the Misc. Capital Goods industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.

High bargaining power of channel partners in Misc. Capital Goods industry

– because of the regulatory requirements in China, Hisense Kelon A 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 Misc. Capital Goods industry.

Lack of clear differentiation of Hisense Kelon A products

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

Slow decision making process

– As mentioned earlier in the report, Hisense Kelon A has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Misc. Capital Goods industry over the last five years. Hisense Kelon A 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 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 Hisense Kelon A supply chain. Even after few cautionary changes, Hisense Kelon A is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hisense Kelon A vulnerable to further global disruptions in South East Asia.

Need for greater diversity

– Hisense Kelon A 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.

Interest costs

– Compare to the competition, Hisense Kelon A 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.

Products dominated business model

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

High operating costs

– Compare to the competitors, Hisense Kelon A has high operating costs in the Misc. Capital Goods industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Hisense Kelon A lucrative customers.

Employees’ less understanding of Hisense Kelon A strategy

– From the outside it seems that the employees of Hisense Kelon A 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.

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Hisense Kelon A Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Hisense Kelon A are -

Building a culture of innovation

– managers at Hisense Kelon A 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 Misc. Capital Goods industry.

Developing new processes and practices

– Hisense Kelon A can develop new processes and procedures in Misc. Capital Goods 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.

Using analytics as competitive advantage

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

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. Hisense Kelon A can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Loyalty marketing

– Hisense Kelon A 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.

Learning at scale

– Online learning technologies has now opened space for Hisense Kelon A 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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Misc. Capital Goods industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Hisense Kelon A 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. Hisense Kelon A 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Hisense Kelon A in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Misc. Capital Goods industry, and it will provide faster access to the consumers.

Better consumer reach

– The expansion of the 5G network will help Hisense Kelon A to increase its market reach. Hisense Kelon A 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.

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 Hisense Kelon A 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 Misc. Capital Goods industry, but it has also influenced the consumer preferences. Hisense Kelon A can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Creating value in data economy

– The success of analytics program of Hisense Kelon A has opened avenues for new revenue streams for the organization in Misc. Capital Goods industry. This can help Hisense Kelon A to build a more holistic ecosystem for Hisense Kelon A products in the Misc. Capital Goods industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Use of Bitcoin and other crypto currencies for transactions in Misc. Capital Goods industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Hisense Kelon A in the Misc. Capital Goods industry. Now Hisense Kelon A can target international markets with far fewer capital restrictions requirements than the existing system.

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Threats Hisense Kelon A External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Hisense Kelon A are -

Shortening product life cycle

– it is one of the major threat that Hisense Kelon A is facing in Misc. Capital Goods sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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. Hisense Kelon A 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 Hisense Kelon A.

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. Hisense Kelon A needs to understand the core reasons impacting the Misc. Capital Goods industry. This will help it in building a better workplace.

Technology acceleration in Forth Industrial Revolution

– Hisense Kelon A has witnessed rapid integration of technology during Covid-19 in the Misc. Capital Goods industry. As one of the leading players in the industry, Hisense Kelon A needs to keep up with the evolution of technology in the Misc. Capital Goods 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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Hisense Kelon A may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Misc. Capital Goods sector.

Easy access to finance

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

Consumer confidence and its impact on Hisense Kelon A 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 Misc. Capital Goods industry and other sectors.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Misc. Capital Goods industry are lowering. It can presents Hisense Kelon A with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Misc. Capital Goods sector.

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.

Regulatory challenges

– Hisense Kelon A 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 Misc. Capital Goods industry regulations.

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 Hisense Kelon A business can come under increasing regulations regarding data privacy, data security, etc.

Stagnating economy with rate increase

– Hisense Kelon A 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 Misc. Capital Goods industry.

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Weighted SWOT Analysis of Hisense Kelon A Template, Example

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

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