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Avic Aviation Hi Tech (600862) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Avic Aviation Hi Tech (China)


Based on various researches at Oak Spring University , Avic Aviation Hi Tech is operating in a macro-environment that has been destablized by – supply chains are disrupted by pandemic , increasing energy prices, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, etc



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Introduction to SWOT Analysis of Avic Aviation Hi Tech


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




Strengths of Avic Aviation Hi Tech | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Avic Aviation Hi Tech are -

Organizational Resilience of Avic Aviation Hi Tech

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

Superior customer experience

– The customer experience strategy of Avic Aviation Hi Tech in Construction Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Sustainable margins compare to other players in Construction Services industry

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

Digital Transformation in Construction Services industry

- digital transformation varies from industry to industry. For Avic Aviation Hi Tech digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Avic Aviation Hi 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.

Ability to lead change in Construction Services

– Avic Aviation Hi Tech is one of the leading players in the Construction Services industry in China. Over the years it has not only transformed the business landscape in the Construction Services industry in China but also across the existing markets. The ability to lead change has enabled Avic Aviation Hi Tech in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Diverse revenue streams

– Avic Aviation Hi Tech is present in almost all the verticals within the Construction Services industry. This has provided Avic Aviation Hi Tech 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.

Operational resilience

– The operational resilience strategy of Avic Aviation Hi Tech comprises – understanding the underlying the factors in the Construction Services 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.

Successful track record of launching new products

– Avic Aviation Hi Tech has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Avic Aviation Hi Tech 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.

Cross disciplinary teams

– Horizontal connected teams at the Avic Aviation Hi Tech 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.

Low bargaining power of suppliers

– Suppliers of Avic Aviation Hi Tech in the Capital Goods sector have low bargaining power. Avic Aviation Hi Tech has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Avic Aviation Hi Tech to manage not only supply disruptions but also source products at highly competitive prices.

Training and development

– Avic Aviation Hi Tech has one of the best training and development program in Capital Goods 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.

Effective Research and Development (R&D)

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






Weaknesses of Avic Aviation Hi Tech | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Avic Aviation Hi Tech are -

High cash cycle compare to competitors

Avic Aviation Hi Tech has a high cash cycle compare to other players in the Construction 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.

Slow decision making process

– As mentioned earlier in the report, Avic Aviation Hi 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 Construction Services industry over the last five years. Avic Aviation Hi 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.

Compensation and incentives

– The revenue per employee of Avic Aviation Hi Tech is just above the Construction 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.

Low market penetration in new markets

– Outside its home market of China, Avic Aviation Hi Tech needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Need for greater diversity

– Avic Aviation Hi Tech 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.

Increasing silos among functional specialists

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

High operating costs

– Compare to the competitors, Avic Aviation Hi Tech has high operating costs in the Construction Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Avic Aviation Hi Tech lucrative customers.

Products dominated business model

– Even though Avic Aviation Hi Tech has some of the most successful models in the Construction Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Avic Aviation Hi Tech should strive to include more intangible value offerings along with its core products and services.

Aligning sales with marketing

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

Interest costs

– Compare to the competition, Avic Aviation Hi 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.

Ability to respond to the competition

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




Avic Aviation Hi Tech Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The opportunities of Avic Aviation Hi Tech are -

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. Avic Aviation Hi Tech can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Building a culture of innovation

– managers at Avic Aviation Hi Tech 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 Construction Services industry.

Manufacturing automation

– Avic Aviation Hi Tech can use the latest technology developments to improve its manufacturing and designing process in Construction 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.

Buying journey improvements

– Avic Aviation Hi Tech can improve the customer journey of consumers in the Construction 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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Avic Aviation Hi 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 Avic Aviation Hi Tech to hire the very best people irrespective of their geographical location.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Construction Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Avic Aviation Hi 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. Avic Aviation Hi 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.

Developing new processes and practices

– Avic Aviation Hi Tech can develop new processes and procedures in Construction Services industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.

Learning at scale

– Online learning technologies has now opened space for Avic Aviation Hi 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Avic Aviation Hi Tech is facing challenges because of the dominance of functional experts in the organization. Avic Aviation Hi Tech can utilize new technology in the field of Construction Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Increase in government spending

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

Creating value in data economy

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

Leveraging digital technologies

– Avic Aviation Hi Tech 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 Avic Aviation Hi Tech to increase its market reach. Avic Aviation Hi 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.




Threats Avic Aviation Hi Tech External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The threats of Avic Aviation Hi Tech are -

Shortening product life cycle

– it is one of the major threat that Avic Aviation Hi Tech is facing in Construction Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Technology acceleration in Forth Industrial Revolution

– Avic Aviation Hi Tech has witnessed rapid integration of technology during Covid-19 in the Construction Services industry. As one of the leading players in the industry, Avic Aviation Hi Tech needs to keep up with the evolution of technology in the Construction 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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Avic Aviation Hi 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 Construction Services sector.

Stagnating economy with rate increase

– Avic Aviation Hi Tech 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 Construction Services industry.

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 Avic Aviation Hi Tech in the Construction Services sector and impact the bottomline of the organization.

Increasing wage structure of Avic Aviation Hi 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 Avic Aviation Hi Tech.

High dependence on third party suppliers

– Avic Aviation Hi Tech 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.

Consumer confidence and its impact on Avic Aviation Hi Tech 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 Construction Services industry and other sectors.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Construction Services industry are lowering. It can presents Avic Aviation Hi Tech with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Construction Services sector.

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 Avic Aviation Hi Tech.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Avic Aviation Hi 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 Avic Aviation Hi Tech prominent markets.

Environmental challenges

– Avic Aviation Hi Tech 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. Avic Aviation Hi Tech can take advantage of this fund but it will also bring new competitors in the Construction Services industry.

Easy access to finance

– Easy access to finance in Construction Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Avic Aviation Hi Tech can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.




Weighted SWOT Analysis of Avic Aviation Hi Tech Template, Example


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



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