Shanghai Hile Bio Tech (603718) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Shanghai Hile Bio Tech (China)

Based on various researches at Oak Spring University , Shanghai Hile Bio Tech is operating in a macro-environment that has been destablized by – wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, supply chains are disrupted by pandemic , technology disruption, increasing energy prices, central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, etc

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Introduction to SWOT Analysis of Shanghai Hile Bio Tech

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Shanghai Hile Bio Tech can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shanghai Hile Bio Tech, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shanghai Hile Bio 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Shanghai Hile Bio Tech can be done for the following purposes –
1. Strategic planning of Shanghai Hile Bio Tech
2. Improving business portfolio management of Shanghai Hile Bio Tech
3. Assessing feasibility of the new initiative in China
4. Making a Biotechnology & Drugs sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Shanghai Hile Bio Tech

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Strengths of Shanghai Hile Bio Tech | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Shanghai Hile Bio Tech are -

High brand equity

– Shanghai Hile Bio Tech has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Shanghai Hile Bio 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 Biotechnology & Drugs industry

– Shanghai Hile Bio 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.

Ability to lead change in Biotechnology & Drugs

– Shanghai Hile Bio Tech is one of the leading players in the Biotechnology & Drugs industry in China. Over the years it has not only transformed the business landscape in the Biotechnology & Drugs industry in China but also across the existing markets. The ability to lead change has enabled Shanghai Hile Bio Tech 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

– Shanghai Hile Bio Tech has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Shanghai Hile Bio 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.

Training and development

– Shanghai Hile Bio Tech has one of the best training and development program in Healthcare 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.

Diverse revenue streams

– Shanghai Hile Bio Tech is present in almost all the verticals within the Biotechnology & Drugs industry. This has provided Shanghai Hile Bio 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.

Analytics focus

– Shanghai Hile Bio 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 Biotechnology & Drugs 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.

Effective Research and Development (R&D)

– Shanghai Hile Bio Tech has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Shanghai Hile Bio Tech staying ahead in the Biotechnology & Drugs industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Cross disciplinary teams

– Horizontal connected teams at the Shanghai Hile Bio 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.

Sustainable margins compare to other players in Biotechnology & Drugs industry

– Shanghai Hile Bio Tech has clearly differentiated products in the market place. This has enabled Shanghai Hile Bio Tech to fetch slight price premium compare to the competitors in the Biotechnology & Drugs industry. The sustainable margins have also helped Shanghai Hile Bio Tech to invest into research and development (R&D) and innovation.

Operational resilience

– The operational resilience strategy of Shanghai Hile Bio Tech comprises – understanding the underlying the factors in the Biotechnology & Drugs 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.

Low bargaining power of suppliers

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

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Weaknesses of Shanghai Hile Bio Tech | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Shanghai Hile Bio Tech are -

Increasing silos among functional specialists

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

Need for greater diversity

– Shanghai Hile Bio 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.

Employees’ less understanding of Shanghai Hile Bio Tech strategy

– From the outside it seems that the employees of Shanghai Hile Bio Tech 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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Shanghai Hile Bio Tech is slow explore the new channels of communication. These new channels of communication can help Shanghai Hile Bio Tech to provide better information regarding Biotechnology & Drugs products and services. It can also build an online community to further reach out to potential customers.

Lack of clear differentiation of Shanghai Hile Bio Tech products

– To increase the profitability and margins on the products, Shanghai Hile Bio Tech needs to provide more differentiated products than what it is currently offering in the marketplace.

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 Shanghai Hile Bio Tech supply chain. Even after few cautionary changes, Shanghai Hile Bio Tech is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Shanghai Hile Bio Tech vulnerable to further global disruptions in South East Asia.

High cash cycle compare to competitors

Shanghai Hile Bio Tech has a high cash cycle compare to other players in the Biotechnology & Drugs industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Workers concerns about automation

– As automation is fast increasing in the Biotechnology & Drugs industry, Shanghai Hile Bio Tech 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.

Interest costs

– Compare to the competition, Shanghai Hile Bio 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.

Products dominated business model

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

High bargaining power of channel partners in Biotechnology & Drugs industry

– because of the regulatory requirements in China, Shanghai Hile Bio Tech 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 Biotechnology & Drugs industry.

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Shanghai Hile Bio Tech Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Shanghai Hile Bio Tech are -

Redefining models of collaboration and team work

– As explained in the weaknesses section, Shanghai Hile Bio Tech is facing challenges because of the dominance of functional experts in the organization. Shanghai Hile Bio Tech can utilize new technology in the field of Biotechnology & Drugs industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Loyalty marketing

– Shanghai Hile Bio 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.

Using analytics as competitive advantage

– Shanghai Hile Bio Tech has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Biotechnology & Drugs sector. This continuous investment in analytics has enabled Shanghai Hile Bio Tech to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shanghai Hile Bio Tech to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Shanghai Hile Bio 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 Biotechnology & Drugs industry, and it will provide faster access to the consumers.

Buying journey improvements

– Shanghai Hile Bio Tech can improve the customer journey of consumers in the Biotechnology & Drugs 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Shanghai Hile Bio Tech can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Use of Bitcoin and other crypto currencies for transactions in Biotechnology & Drugs industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Shanghai Hile Bio Tech in the Biotechnology & Drugs industry. Now Shanghai Hile Bio Tech can target international markets with far fewer capital restrictions requirements than the existing system.

Learning at scale

– Online learning technologies has now opened space for Shanghai Hile Bio 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Shanghai Hile Bio 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 Shanghai Hile Bio 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.

Remote work and new talent hiring opportunities

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

Developing new processes and practices

– Shanghai Hile Bio Tech can develop new processes and procedures in Biotechnology & Drugs 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.

Creating value in data economy

– The success of analytics program of Shanghai Hile Bio Tech has opened avenues for new revenue streams for the organization in Biotechnology & Drugs industry. This can help Shanghai Hile Bio Tech to build a more holistic ecosystem for Shanghai Hile Bio Tech products in the Biotechnology & Drugs industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Building a culture of innovation

– managers at Shanghai Hile Bio 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 Biotechnology & Drugs industry.

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Threats Shanghai Hile Bio Tech External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Shanghai Hile Bio Tech are -

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. Shanghai Hile Bio Tech needs to understand the core reasons impacting the Biotechnology & Drugs industry. This will help it in building a better workplace.

High dependence on third party suppliers

– Shanghai Hile Bio 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.

Increasing wage structure of Shanghai Hile Bio 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 Shanghai Hile Bio Tech.

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 Shanghai Hile Bio Tech in the Biotechnology & Drugs sector and impact the bottomline of the organization.

Environmental challenges

– Shanghai Hile Bio 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. Shanghai Hile Bio Tech can take advantage of this fund but it will also bring new competitors in the Biotechnology & Drugs industry.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Shanghai Hile Bio 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 Biotechnology & Drugs 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 Shanghai Hile Bio Tech.

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. Shanghai Hile Bio 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.

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.

Consumer confidence and its impact on Shanghai Hile Bio 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 Biotechnology & Drugs industry and other sectors.

Technology acceleration in Forth Industrial Revolution

– Shanghai Hile Bio Tech has witnessed rapid integration of technology during Covid-19 in the Biotechnology & Drugs industry. As one of the leading players in the industry, Shanghai Hile Bio Tech needs to keep up with the evolution of technology in the Biotechnology & Drugs 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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Shanghai Hile Bio Tech in Biotechnology & Drugs industry. The Biotechnology & Drugs 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.

Shortening product life cycle

– it is one of the major threat that Shanghai Hile Bio Tech is facing in Biotechnology & Drugs sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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Weighted SWOT Analysis of Shanghai Hile Bio Tech Template, Example

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

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