Based on various researches at Oak Spring University , Shenzhen Kingdom SCI Tech is operating in a macro-environment that has been destablized by – cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, wage bills are increasing, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies,
competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Shenzhen Kingdom SCI Tech
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Shenzhen Kingdom SCI Tech can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shenzhen Kingdom SCI Tech, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shenzhen Kingdom SCI Tech 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 Shenzhen Kingdom SCI Tech can be done for the following purposes –
1. Strategic planning of Shenzhen Kingdom SCI Tech
2. Improving business portfolio management of Shenzhen Kingdom SCI Tech
3. Assessing feasibility of the new initiative in China
4. Making a Computer Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Shenzhen Kingdom SCI Tech
Strengths of Shenzhen Kingdom SCI Tech | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shenzhen Kingdom SCI Tech are -
Ability to recruit top talent
– Shenzhen Kingdom SCI Tech is one of the leading players in the Computer 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.
Innovation driven organization
– Shenzhen Kingdom SCI Tech is one of the most innovative firm in Computer Services sector.
Analytics focus
– Shenzhen Kingdom SCI Tech 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 Computer Services 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 lead change in Computer Services
– Shenzhen Kingdom SCI Tech is one of the leading players in the Computer Services industry in China. Over the years it has not only transformed the business landscape in the Computer Services industry in China but also across the existing markets. The ability to lead change has enabled Shenzhen Kingdom SCI Tech in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Shenzhen Kingdom SCI Tech has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Shenzhen Kingdom SCI Tech to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management in the Computer Services industry
– Shenzhen Kingdom SCI Tech is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Computer Services industry
- digital transformation varies from industry to industry. For Shenzhen Kingdom SCI Tech digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shenzhen Kingdom SCI Tech has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Highly skilled collaborators
– Shenzhen Kingdom SCI Tech has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Computer Services industry. Secondly the value chain collaborators of Shenzhen Kingdom SCI Tech have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Shenzhen Kingdom SCI Tech 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 Shenzhen Kingdom SCI Tech is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Shenzhen Kingdom SCI Tech emphasize – knowledge, initiative, and innovation.
Training and development
– Shenzhen Kingdom SCI Tech has one of the best training and development program in Technology 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.
Superior customer experience
– The customer experience strategy of Shenzhen Kingdom SCI Tech in Computer Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Shenzhen Kingdom SCI Tech has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Shenzhen Kingdom SCI Tech staying ahead in the Computer Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses of Shenzhen Kingdom SCI Tech | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shenzhen Kingdom SCI Tech are -
High operating costs
– Compare to the competitors, Shenzhen Kingdom SCI Tech has high operating costs in the Computer Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Shenzhen Kingdom SCI Tech lucrative customers.
Interest costs
– Compare to the competition, Shenzhen Kingdom SCI Tech 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.
Lack of clear differentiation of Shenzhen Kingdom SCI Tech products
– To increase the profitability and margins on the products, Shenzhen Kingdom SCI Tech needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Shenzhen Kingdom SCI Tech has some of the most successful models in the Computer Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Shenzhen Kingdom SCI Tech should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Shenzhen Kingdom SCI Tech is slow explore the new channels of communication. These new channels of communication can help Shenzhen Kingdom SCI Tech to provide better information regarding Computer Services products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Shenzhen Kingdom SCI Tech has a high cash cycle compare to other players in the Computer Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Compensation and incentives
– The revenue per employee of Shenzhen Kingdom SCI Tech is just above the Computer Services 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.
Slow to strategic competitive environment developments
– As Shenzhen Kingdom SCI Tech is one of the leading players in the Computer Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Computer Services industry in last five years.
Low market penetration in new markets
– Outside its home market of China, Shenzhen Kingdom SCI Tech needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Shenzhen Kingdom SCI Tech has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Computer Services industry over the last five years. Shenzhen Kingdom SCI Tech 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 Shenzhen Kingdom SCI Tech ‘s star products
– The top 2 products and services of Shenzhen Kingdom SCI Tech still accounts for major business revenue. This dependence on star products in Computer Services industry has resulted into insufficient focus on developing new products, even though Shenzhen Kingdom SCI Tech has relatively successful track record of launching new products.
Shenzhen Kingdom SCI Tech Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Shenzhen Kingdom SCI Tech are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Shenzhen Kingdom SCI Tech 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 Shenzhen Kingdom SCI Tech to hire the very best people irrespective of their geographical location.
Use of Bitcoin and other crypto currencies for transactions in Computer Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Shenzhen Kingdom SCI Tech in the Computer Services industry. Now Shenzhen Kingdom SCI Tech can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Shenzhen Kingdom SCI Tech is facing challenges because of the dominance of functional experts in the organization. Shenzhen Kingdom SCI Tech can utilize new technology in the field of Computer Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Buying journey improvements
– Shenzhen Kingdom SCI Tech can improve the customer journey of consumers in the Computer Services 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.
Better consumer reach
– The expansion of the 5G network will help Shenzhen Kingdom SCI Tech to increase its market reach. Shenzhen Kingdom SCI Tech 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Shenzhen Kingdom SCI Tech in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Computer Services industry, and it will provide faster access to the consumers.
Manufacturing automation
– Shenzhen Kingdom SCI Tech can use the latest technology developments to improve its manufacturing and designing process in Computer 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Shenzhen Kingdom SCI Tech can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Shenzhen Kingdom SCI Tech can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Shenzhen Kingdom SCI Tech 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Shenzhen Kingdom SCI Tech 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 Shenzhen Kingdom SCI Tech to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Shenzhen Kingdom SCI Tech 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 Computer Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Shenzhen Kingdom SCI Tech 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. Shenzhen Kingdom SCI Tech 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 Shenzhen Kingdom SCI Tech External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Shenzhen Kingdom SCI Tech are -
Shortening product life cycle
– it is one of the major threat that Shenzhen Kingdom SCI Tech is facing in Computer Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Shenzhen Kingdom SCI Tech may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Computer Services sector.
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. Shenzhen Kingdom SCI Tech needs to understand the core reasons impacting the Computer 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 Shenzhen Kingdom SCI Tech in Computer Services industry. The Computer 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.
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.
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 Shenzhen Kingdom SCI Tech business can come under increasing regulations regarding data privacy, data security, etc.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Shenzhen Kingdom SCI Tech in the Computer Services sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Shenzhen Kingdom SCI Tech 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 Shenzhen Kingdom SCI Tech prominent markets.
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. Shenzhen Kingdom SCI Tech 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.
Easy access to finance
– Easy access to finance in Computer Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Shenzhen Kingdom SCI Tech can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Shenzhen Kingdom SCI Tech has witnessed rapid integration of technology during Covid-19 in the Computer Services industry. As one of the leading players in the industry, Shenzhen Kingdom SCI Tech needs to keep up with the evolution of technology in the Computer 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.
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.
Increasing wage structure of Shenzhen Kingdom SCI Tech
– 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 Shenzhen Kingdom SCI Tech.
Weighted SWOT Analysis of Shenzhen Kingdom SCI Tech Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Shenzhen Kingdom SCI Tech 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 Shenzhen Kingdom SCI Tech 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 Shenzhen Kingdom SCI Tech 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 Shenzhen Kingdom SCI Tech 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 Shenzhen Kingdom SCI Tech needs to make to build a sustainable competitive advantage.