SWOT Analysis / TOWS Matrix for Jiangxi Hongdu Aviation (China)
Based on various researches at Oak Spring University , Jiangxi Hongdu Aviation is operating in a macro-environment that has been destablized by – increasing commodity prices, increasing household debt because of falling income levels, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, technology disruption, supply chains are disrupted by pandemic ,
there is backlash against globalization, wage bills are increasing, etc
Introduction to SWOT Analysis of Jiangxi Hongdu Aviation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Jiangxi Hongdu Aviation can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Jiangxi Hongdu Aviation, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Jiangxi Hongdu Aviation 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 Jiangxi Hongdu Aviation can be done for the following purposes –
1. Strategic planning of Jiangxi Hongdu Aviation
2. Improving business portfolio management of Jiangxi Hongdu Aviation
3. Assessing feasibility of the new initiative in China
4. Making a Aerospace & Defense sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Jiangxi Hongdu Aviation
Strengths of Jiangxi Hongdu Aviation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Jiangxi Hongdu Aviation are -
Ability to recruit top talent
– Jiangxi Hongdu Aviation is one of the leading players in the Aerospace & Defense 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 switching costs
– The high switching costs that Jiangxi Hongdu Aviation 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.
Cross disciplinary teams
– Horizontal connected teams at the Jiangxi Hongdu Aviation 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
– Jiangxi Hongdu Aviation is one of the most innovative firm in Aerospace & Defense sector.
Strong track record of project management in the Aerospace & Defense industry
– Jiangxi Hongdu Aviation 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 Aerospace & Defense
– Jiangxi Hongdu Aviation is one of the leading players in the Aerospace & Defense industry in China. Over the years it has not only transformed the business landscape in the Aerospace & Defense industry in China but also across the existing markets. The ability to lead change has enabled Jiangxi Hongdu Aviation in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy of Jiangxi Hongdu Aviation comprises – understanding the underlying the factors in the Aerospace & Defense 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.
Learning organization
- Jiangxi Hongdu Aviation 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 Jiangxi Hongdu Aviation is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Jiangxi Hongdu Aviation emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Jiangxi Hongdu Aviation in the Capital Goods sector have low bargaining power. Jiangxi Hongdu Aviation has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Jiangxi Hongdu Aviation to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Jiangxi Hongdu Aviation has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Jiangxi Hongdu Aviation to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Jiangxi Hongdu Aviation is present in almost all the verticals within the Aerospace & Defense industry. This has provided Jiangxi Hongdu Aviation 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.
Digital Transformation in Aerospace & Defense industry
- digital transformation varies from industry to industry. For Jiangxi Hongdu Aviation digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Jiangxi Hongdu Aviation 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.
Weaknesses of Jiangxi Hongdu Aviation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Jiangxi Hongdu Aviation are -
High bargaining power of channel partners in Aerospace & Defense industry
– because of the regulatory requirements in China, Jiangxi Hongdu Aviation 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 Aerospace & Defense industry.
Need for greater diversity
– Jiangxi Hongdu Aviation 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.
Skills based hiring in Aerospace & Defense industry
– The stress on hiring functional specialists at Jiangxi Hongdu Aviation 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.
Compensation and incentives
– The revenue per employee of Jiangxi Hongdu Aviation is just above the Aerospace & Defense industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Slow to strategic competitive environment developments
– As Jiangxi Hongdu Aviation is one of the leading players in the Aerospace & Defense industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Aerospace & Defense industry in last five years.
Slow decision making process
– As mentioned earlier in the report, Jiangxi Hongdu Aviation has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Aerospace & Defense industry over the last five years. Jiangxi Hongdu Aviation 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Jiangxi Hongdu Aviation is slow explore the new channels of communication. These new channels of communication can help Jiangxi Hongdu Aviation to provide better information regarding Aerospace & Defense products and services. It can also build an online community to further reach out to potential customers.
Increasing silos among functional specialists
– The organizational structure of Jiangxi Hongdu Aviation is dominated by functional specialists. It is not different from other players in the Aerospace & Defense industry, but Jiangxi Hongdu Aviation needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Jiangxi Hongdu Aviation to focus more on services in the Aerospace & Defense industry rather than just following the product oriented approach.
Aligning sales with marketing
– From the outside it seems that Jiangxi Hongdu Aviation needs to have more collaboration between its sales team and marketing team. Sales professionals in the Aerospace & Defense industry have deep experience in developing customer relationships. Marketing department at Jiangxi Hongdu Aviation can leverage the sales team experience to cultivate customer relationships as Jiangxi Hongdu Aviation is planning to shift buying processes online.
Lack of clear differentiation of Jiangxi Hongdu Aviation products
– To increase the profitability and margins on the products, Jiangxi Hongdu Aviation needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Jiangxi Hongdu Aviation has a high cash cycle compare to other players in the Aerospace & Defense industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Jiangxi Hongdu Aviation Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Jiangxi Hongdu Aviation are -
Developing new processes and practices
– Jiangxi Hongdu Aviation can develop new processes and procedures in Aerospace & Defense 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Jiangxi Hongdu Aviation 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Jiangxi Hongdu Aviation in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Aerospace & Defense industry, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Jiangxi Hongdu Aviation to increase its market reach. Jiangxi Hongdu Aviation 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Jiangxi Hongdu Aviation can use these opportunities to build new business models that can help the communities that Jiangxi Hongdu Aviation operates in. Secondly it can use opportunities from government spending in Aerospace & Defense sector.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Aerospace & Defense industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Jiangxi Hongdu Aviation 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. Jiangxi Hongdu Aviation 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Jiangxi Hongdu Aviation is facing challenges because of the dominance of functional experts in the organization. Jiangxi Hongdu Aviation can utilize new technology in the field of Aerospace & Defense industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, 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 Jiangxi Hongdu Aviation 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.
Using analytics as competitive advantage
– Jiangxi Hongdu Aviation has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Aerospace & Defense sector. This continuous investment in analytics has enabled Jiangxi Hongdu Aviation to build a competitive advantage using analytics. The analytics driven competitive advantage can help Jiangxi Hongdu Aviation to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Jiangxi Hongdu Aviation can improve the customer journey of consumers in the Aerospace & Defense 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.
Building a culture of innovation
– managers at Jiangxi Hongdu Aviation 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 Aerospace & Defense industry.
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. Jiangxi Hongdu Aviation can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Jiangxi Hongdu Aviation 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.
Threats Jiangxi Hongdu Aviation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Jiangxi Hongdu Aviation are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Aerospace & Defense industry are lowering. It can presents Jiangxi Hongdu Aviation with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Aerospace & Defense sector.
Increasing wage structure of Jiangxi Hongdu Aviation
– 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 Jiangxi Hongdu Aviation.
Stagnating economy with rate increase
– Jiangxi Hongdu Aviation 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 Aerospace & Defense industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Jiangxi Hongdu Aviation 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 Jiangxi Hongdu Aviation prominent markets.
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 Jiangxi Hongdu Aviation.
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 Jiangxi Hongdu Aviation business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Jiangxi Hongdu Aviation 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. Jiangxi Hongdu Aviation can take advantage of this fund but it will also bring new competitors in the Aerospace & Defense industry.
Technology acceleration in Forth Industrial Revolution
– Jiangxi Hongdu Aviation has witnessed rapid integration of technology during Covid-19 in the Aerospace & Defense industry. As one of the leading players in the industry, Jiangxi Hongdu Aviation needs to keep up with the evolution of technology in the Aerospace & Defense 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.
Shortening product life cycle
– it is one of the major threat that Jiangxi Hongdu Aviation is facing in Aerospace & Defense sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Jiangxi Hongdu Aviation needs to understand the core reasons impacting the Aerospace & Defense industry. This will help it in building a better workplace.
Regulatory challenges
– Jiangxi Hongdu Aviation 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 Aerospace & Defense industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Jiangxi Hongdu Aviation may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Aerospace & Defense sector.
Consumer confidence and its impact on Jiangxi Hongdu Aviation 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 Aerospace & Defense industry and other sectors.
Weighted SWOT Analysis of Jiangxi Hongdu Aviation Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Jiangxi Hongdu Aviation 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 Jiangxi Hongdu Aviation 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 Jiangxi Hongdu Aviation 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 Jiangxi Hongdu Aviation 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 Jiangxi Hongdu Aviation needs to make to build a sustainable competitive advantage.
