Chongqing Three Gorges (600116) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Chongqing Three Gorges (China)

Based on various researches at Oak Spring University , Chongqing Three Gorges is operating in a macro-environment that has been destablized by – wage bills are increasing, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, 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, there is backlash against globalization, technology disruption, etc

---

---

---

---

Introduction to SWOT Analysis of Chongqing Three Gorges

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

---

Strengths of Chongqing Three Gorges | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Chongqing Three Gorges are -

Cross disciplinary teams

– Horizontal connected teams at the Chongqing Three Gorges 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.

Innovation driven organization

– Chongqing Three Gorges is one of the most innovative firm in Electric Utilities sector.

Successful track record of launching new products

– Chongqing Three Gorges has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Chongqing Three Gorges 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.

Strong track record of project management in the Electric Utilities industry

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

Highly skilled collaborators

– Chongqing Three Gorges has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Electric Utilities industry. Secondly the value chain collaborators of Chongqing Three Gorges have helped the firm to develop new products and bring them quickly to the marketplace.

Diverse revenue streams

– Chongqing Three Gorges is present in almost all the verticals within the Electric Utilities industry. This has provided Chongqing Three Gorges 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.

Effective Research and Development (R&D)

– Chongqing Three Gorges has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Chongqing Three Gorges staying ahead in the Electric Utilities industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Learning organization

- Chongqing Three Gorges 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 Chongqing Three Gorges is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Chongqing Three Gorges emphasize – knowledge, initiative, and innovation.

High switching costs

– The high switching costs that Chongqing Three Gorges 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.

Sustainable margins compare to other players in Electric Utilities industry

– Chongqing Three Gorges has clearly differentiated products in the market place. This has enabled Chongqing Three Gorges to fetch slight price premium compare to the competitors in the Electric Utilities industry. The sustainable margins have also helped Chongqing Three Gorges to invest into research and development (R&D) and innovation.

Digital Transformation in Electric Utilities industry

- digital transformation varies from industry to industry. For Chongqing Three Gorges digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Chongqing Three Gorges 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.

Superior customer experience

– The customer experience strategy of Chongqing Three Gorges in Electric Utilities industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

---

---

Weaknesses of Chongqing Three Gorges | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Chongqing Three Gorges are -

Aligning sales with marketing

– From the outside it seems that Chongqing Three Gorges needs to have more collaboration between its sales team and marketing team. Sales professionals in the Electric Utilities industry have deep experience in developing customer relationships. Marketing department at Chongqing Three Gorges can leverage the sales team experience to cultivate customer relationships as Chongqing Three Gorges is planning to shift buying processes online.

Low market penetration in new markets

– Outside its home market of China, Chongqing Three Gorges 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, Chongqing Three Gorges is slow explore the new channels of communication. These new channels of communication can help Chongqing Three Gorges to provide better information regarding Electric Utilities products and services. It can also build an online community to further reach out to potential customers.

Products dominated business model

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

Compensation and incentives

– The revenue per employee of Chongqing Three Gorges is just above the Electric Utilities 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.

Skills based hiring in Electric Utilities industry

– The stress on hiring functional specialists at Chongqing Three Gorges 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 Chongqing Three Gorges, in the dynamic environment of Electric Utilities industry it has struggled to respond to the nimble upstart competition. Chongqing Three Gorges has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

High cash cycle compare to competitors

Chongqing Three Gorges has a high cash cycle compare to other players in the Electric Utilities industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

High bargaining power of channel partners in Electric Utilities industry

– because of the regulatory requirements in China, Chongqing Three Gorges 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 Electric Utilities industry.

Slow decision making process

– As mentioned earlier in the report, Chongqing Three Gorges has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Electric Utilities industry over the last five years. Chongqing Three Gorges 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.

Increasing silos among functional specialists

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

---

Chongqing Three Gorges Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Chongqing Three Gorges are -

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Chongqing Three Gorges 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 Chongqing Three Gorges to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Chongqing Three Gorges in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Electric Utilities industry, and it will provide faster access to the consumers.

Use of Bitcoin and other crypto currencies for transactions in Electric Utilities industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Chongqing Three Gorges in the Electric Utilities industry. Now Chongqing Three Gorges can target international markets with far fewer capital restrictions requirements than the existing system.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Chongqing Three Gorges 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 Chongqing Three Gorges to hire the very best people irrespective of their geographical location.

Building a culture of innovation

– managers at Chongqing Three Gorges 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 Electric Utilities industry.

Learning at scale

– Online learning technologies has now opened space for Chongqing Three Gorges 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.

Buying journey improvements

– Chongqing Three Gorges can improve the customer journey of consumers in the Electric Utilities 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.

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. Chongqing Three Gorges can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Electric Utilities industry, but it has also influenced the consumer preferences. Chongqing Three Gorges can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Better consumer reach

– The expansion of the 5G network will help Chongqing Three Gorges to increase its market reach. Chongqing Three Gorges 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.

Manufacturing automation

– Chongqing Three Gorges can use the latest technology developments to improve its manufacturing and designing process in Electric Utilities 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.

Creating value in data economy

– The success of analytics program of Chongqing Three Gorges has opened avenues for new revenue streams for the organization in Electric Utilities industry. This can help Chongqing Three Gorges to build a more holistic ecosystem for Chongqing Three Gorges products in the Electric Utilities industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Low interest rates

– Even though inflation is raising its head in most developed economies, Chongqing Three Gorges 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.

---

Threats Chongqing Three Gorges External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Chongqing Three Gorges 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. Chongqing Three Gorges needs to understand the core reasons impacting the Electric Utilities industry. This will help it in building a better workplace.

Regulatory challenges

– Chongqing Three Gorges 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 Electric Utilities industry regulations.

Backlash against dominant players

– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Chongqing Three Gorges business can come under increasing regulations regarding data privacy, data security, etc.

Stagnating economy with rate increase

– Chongqing Three Gorges 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 Electric Utilities industry.

Environmental challenges

– Chongqing Three Gorges 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. Chongqing Three Gorges can take advantage of this fund but it will also bring new competitors in the Electric Utilities industry.

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.

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 Chongqing Three Gorges in the Electric Utilities sector and impact the bottomline of the organization.

Shortening product life cycle

– it is one of the major threat that Chongqing Three Gorges is facing in Electric Utilities sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Technology acceleration in Forth Industrial Revolution

– Chongqing Three Gorges has witnessed rapid integration of technology during Covid-19 in the Electric Utilities industry. As one of the leading players in the industry, Chongqing Three Gorges needs to keep up with the evolution of technology in the Electric Utilities 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.

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 Chongqing Three Gorges.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Chongqing Three Gorges may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Electric Utilities sector.

Consumer confidence and its impact on Chongqing Three Gorges 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 Electric Utilities industry and other sectors.

---

Weighted SWOT Analysis of Chongqing Three Gorges Template, Example

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

--- ---