SWOT Analysis / TOWS Matrix for Shenzhen Shenbao Industrial (China)
Based on various researches at Oak Spring University , Shenzhen Shenbao Industrial is operating in a macro-environment that has been destablized by – increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, technology disruption, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%,
increasing transportation and logistics costs, increasing energy prices, etc
Introduction to SWOT Analysis of Shenzhen Shenbao Industrial
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Shenzhen Shenbao Industrial can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shenzhen Shenbao Industrial, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shenzhen Shenbao Industrial 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 Shenbao Industrial can be done for the following purposes –
1. Strategic planning of Shenzhen Shenbao Industrial
2. Improving business portfolio management of Shenzhen Shenbao Industrial
3. Assessing feasibility of the new initiative in China
4. Making a Food Processing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Shenzhen Shenbao Industrial
Strengths of Shenzhen Shenbao Industrial | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shenzhen Shenbao Industrial are -
High switching costs
– The high switching costs that Shenzhen Shenbao Industrial 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.
Innovation driven organization
– Shenzhen Shenbao Industrial is one of the most innovative firm in Food Processing sector.
Ability to recruit top talent
– Shenzhen Shenbao Industrial is one of the leading players in the Food Processing 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
– Shenzhen Shenbao Industrial has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Shenzhen Shenbao Industrial to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Shenzhen Shenbao Industrial has one of the best training and development program in Consumer/Non-Cyclical 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.
Sustainable margins compare to other players in Food Processing industry
– Shenzhen Shenbao Industrial has clearly differentiated products in the market place. This has enabled Shenzhen Shenbao Industrial to fetch slight price premium compare to the competitors in the Food Processing industry. The sustainable margins have also helped Shenzhen Shenbao Industrial to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Shenzhen Shenbao Industrial in Food Processing industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Shenzhen Shenbao Industrial has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Food Processing industry. Secondly the value chain collaborators of Shenzhen Shenbao Industrial have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Shenzhen Shenbao Industrial has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Shenzhen Shenbao Industrial 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.
Digital Transformation in Food Processing industry
- digital transformation varies from industry to industry. For Shenzhen Shenbao Industrial digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shenzhen Shenbao Industrial 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.
Low bargaining power of suppliers
– Suppliers of Shenzhen Shenbao Industrial in the Consumer/Non-Cyclical sector have low bargaining power. Shenzhen Shenbao Industrial has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shenzhen Shenbao Industrial to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management in the Food Processing industry
– Shenzhen Shenbao Industrial is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses of Shenzhen Shenbao Industrial | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shenzhen Shenbao Industrial are -
High bargaining power of channel partners in Food Processing industry
– because of the regulatory requirements in China, Shenzhen Shenbao Industrial 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 Food Processing industry.
Aligning sales with marketing
– From the outside it seems that Shenzhen Shenbao Industrial needs to have more collaboration between its sales team and marketing team. Sales professionals in the Food Processing industry have deep experience in developing customer relationships. Marketing department at Shenzhen Shenbao Industrial can leverage the sales team experience to cultivate customer relationships as Shenzhen Shenbao Industrial is planning to shift buying processes online.
High operating costs
– Compare to the competitors, Shenzhen Shenbao Industrial has high operating costs in the Food Processing industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Shenzhen Shenbao Industrial lucrative customers.
Skills based hiring in Food Processing industry
– The stress on hiring functional specialists at Shenzhen Shenbao Industrial 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.
Ability to respond to the competition
– As the decision making is very deliberative at Shenzhen Shenbao Industrial, in the dynamic environment of Food Processing industry it has struggled to respond to the nimble upstart competition. Shenzhen Shenbao Industrial has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ less understanding of Shenzhen Shenbao Industrial strategy
– From the outside it seems that the employees of Shenzhen Shenbao Industrial 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.
Products dominated business model
– Even though Shenzhen Shenbao Industrial has some of the most successful models in the Food Processing industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Shenzhen Shenbao Industrial should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Shenzhen Shenbao Industrial has a high cash cycle compare to other players in the Food Processing industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Low market penetration in new markets
– Outside its home market of China, Shenzhen Shenbao Industrial needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Shenzhen Shenbao Industrial is slow explore the new channels of communication. These new channels of communication can help Shenzhen Shenbao Industrial to provide better information regarding Food Processing products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the Food Processing industry, Shenzhen Shenbao Industrial needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Shenzhen Shenbao Industrial Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Shenzhen Shenbao Industrial are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Shenzhen Shenbao Industrial 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.
Creating value in data economy
– The success of analytics program of Shenzhen Shenbao Industrial has opened avenues for new revenue streams for the organization in Food Processing industry. This can help Shenzhen Shenbao Industrial to build a more holistic ecosystem for Shenzhen Shenbao Industrial products in the Food Processing industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Shenzhen Shenbao Industrial 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.
Learning at scale
– Online learning technologies has now opened space for Shenzhen Shenbao Industrial 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.
Leveraging digital technologies
– Shenzhen Shenbao Industrial 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.
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. Shenzhen Shenbao Industrial can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Shenzhen Shenbao Industrial to increase its market reach. Shenzhen Shenbao Industrial 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Shenzhen Shenbao Industrial is facing challenges because of the dominance of functional experts in the organization. Shenzhen Shenbao Industrial can utilize new technology in the field of Food Processing industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Using analytics as competitive advantage
– Shenzhen Shenbao Industrial has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Food Processing sector. This continuous investment in analytics has enabled Shenzhen Shenbao Industrial to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shenzhen Shenbao Industrial to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Use of Bitcoin and other crypto currencies for transactions in Food Processing industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Shenzhen Shenbao Industrial in the Food Processing industry. Now Shenzhen Shenbao Industrial can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Shenzhen Shenbao Industrial can use these opportunities to build new business models that can help the communities that Shenzhen Shenbao Industrial operates in. Secondly it can use opportunities from government spending in Food Processing sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Shenzhen Shenbao Industrial can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Shenzhen Shenbao Industrial in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Food Processing industry, and it will provide faster access to the consumers.
Threats Shenzhen Shenbao Industrial External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Shenzhen Shenbao Industrial are -
Regulatory challenges
– Shenzhen Shenbao Industrial 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 Food Processing industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Shenzhen Shenbao Industrial 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 Shenbao Industrial prominent markets.
High dependence on third party suppliers
– Shenzhen Shenbao Industrial 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Shenzhen Shenbao Industrial in Food Processing industry. The Food Processing 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.
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.
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 Shenbao Industrial in the Food Processing sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Shenzhen Shenbao Industrial has witnessed rapid integration of technology during Covid-19 in the Food Processing industry. As one of the leading players in the industry, Shenzhen Shenbao Industrial needs to keep up with the evolution of technology in the Food Processing 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Food Processing industry are lowering. It can presents Shenzhen Shenbao Industrial with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Food Processing sector.
Stagnating economy with rate increase
– Shenzhen Shenbao Industrial 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 Food Processing industry.
Shortening product life cycle
– it is one of the major threat that Shenzhen Shenbao Industrial is facing in Food Processing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Shenzhen Shenbao Industrial 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. Shenzhen Shenbao Industrial can take advantage of this fund but it will also bring new competitors in the Food Processing industry.
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 Shenbao Industrial 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.
Consumer confidence and its impact on Shenzhen Shenbao Industrial 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 Food Processing industry and other sectors.
Weighted SWOT Analysis of Shenzhen Shenbao Industrial Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Shenzhen Shenbao Industrial 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 Shenbao Industrial 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 Shenbao Industrial 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 Shenbao Industrial 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 Shenbao Industrial needs to make to build a sustainable competitive advantage.