SWOT Analysis / TOWS Matrix for Shanghai East-China Computer (China)
Based on various researches at Oak Spring University , Shanghai East-China Computer is operating in a macro-environment that has been destablized by – wage bills are increasing, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , technology disruption, there is backlash against globalization,
increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Shanghai East-China Computer
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Shanghai East-China Computer can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shanghai East-China Computer, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shanghai East-China Computer 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 Shanghai East-China Computer can be done for the following purposes –
1. Strategic planning of Shanghai East-China Computer
2. Improving business portfolio management of Shanghai East-China Computer
3. Assessing feasibility of the new initiative in China
4. Making a Computer Hardware sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Shanghai East-China Computer
Strengths of Shanghai East-China Computer | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shanghai East-China Computer are -
Diverse revenue streams
– Shanghai East-China Computer is present in almost all the verticals within the Computer Hardware industry. This has provided Shanghai East-China Computer 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.
High brand equity
– Shanghai East-China Computer has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Shanghai East-China Computer to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Shanghai East-China Computer 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 Shanghai East-China Computer is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Shanghai East-China Computer emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Shanghai East-China Computer is one of the leading players in the Computer Hardware 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.
Ability to lead change in Computer Hardware
– Shanghai East-China Computer is one of the leading players in the Computer Hardware industry in China. Over the years it has not only transformed the business landscape in the Computer Hardware industry in China but also across the existing markets. The ability to lead change has enabled Shanghai East-China Computer in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Computer Hardware industry
– Shanghai East-China Computer has clearly differentiated products in the market place. This has enabled Shanghai East-China Computer to fetch slight price premium compare to the competitors in the Computer Hardware industry. The sustainable margins have also helped Shanghai East-China Computer to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Shanghai East-China Computer in the Technology sector have low bargaining power. Shanghai East-China Computer has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shanghai East-China Computer to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Shanghai East-China Computer 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 Computer Hardware 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.
Highly skilled collaborators
– Shanghai East-China Computer has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Computer Hardware industry. Secondly the value chain collaborators of Shanghai East-China Computer have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management in the Computer Hardware industry
– Shanghai East-China Computer is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy of Shanghai East-China Computer comprises – understanding the underlying the factors in the Computer Hardware 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.
Digital Transformation in Computer Hardware industry
- digital transformation varies from industry to industry. For Shanghai East-China Computer digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shanghai East-China Computer 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 Shanghai East-China Computer | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shanghai East-China Computer are -
Ability to respond to the competition
– As the decision making is very deliberative at Shanghai East-China Computer, in the dynamic environment of Computer Hardware industry it has struggled to respond to the nimble upstart competition. Shanghai East-China Computer has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 East-China Computer supply chain. Even after few cautionary changes, Shanghai East-China Computer is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Shanghai East-China Computer vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of China, Shanghai East-China Computer needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Shanghai East-China Computer has a high cash cycle compare to other players in the Computer Hardware 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 Computer Hardware industry
– because of the regulatory requirements in China, Shanghai East-China Computer 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 Computer Hardware industry.
High dependence on Shanghai East-China Computer ‘s star products
– The top 2 products and services of Shanghai East-China Computer still accounts for major business revenue. This dependence on star products in Computer Hardware industry has resulted into insufficient focus on developing new products, even though Shanghai East-China Computer has relatively successful track record of launching new products.
Lack of clear differentiation of Shanghai East-China Computer products
– To increase the profitability and margins on the products, Shanghai East-China Computer needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, Shanghai East-China Computer has high operating costs in the Computer Hardware industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Shanghai East-China Computer lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Shanghai East-China Computer is dominated by functional specialists. It is not different from other players in the Computer Hardware industry, but Shanghai East-China Computer needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Shanghai East-China Computer to focus more on services in the Computer Hardware industry rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Shanghai East-China Computer is slow explore the new channels of communication. These new channels of communication can help Shanghai East-China Computer to provide better information regarding Computer Hardware products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring in Computer Hardware industry
– The stress on hiring functional specialists at Shanghai East-China Computer 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.
Shanghai East-China Computer Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Shanghai East-China Computer are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Shanghai East-China Computer can use these opportunities to build new business models that can help the communities that Shanghai East-China Computer operates in. Secondly it can use opportunities from government spending in Computer Hardware sector.
Building a culture of innovation
– managers at Shanghai East-China Computer 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 Computer Hardware industry.
Buying journey improvements
– Shanghai East-China Computer can improve the customer journey of consumers in the Computer Hardware 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.
Developing new processes and practices
– Shanghai East-China Computer can develop new processes and procedures in Computer Hardware 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.
Better consumer reach
– The expansion of the 5G network will help Shanghai East-China Computer to increase its market reach. Shanghai East-China Computer 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Shanghai East-China Computer 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Shanghai East-China Computer 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 East-China Computer to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Shanghai East-China Computer 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 East-China Computer to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Shanghai East-China Computer 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Shanghai East-China Computer is facing challenges because of the dominance of functional experts in the organization. Shanghai East-China Computer can utilize new technology in the field of Computer Hardware industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Leveraging digital technologies
– Shanghai East-China Computer 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Computer Hardware industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Shanghai East-China Computer 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. Shanghai East-China Computer 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.
Manufacturing automation
– Shanghai East-China Computer can use the latest technology developments to improve its manufacturing and designing process in Computer Hardware 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.
Threats Shanghai East-China Computer External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Shanghai East-China Computer are -
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Shanghai East-China Computer may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Computer Hardware sector.
Technology acceleration in Forth Industrial Revolution
– Shanghai East-China Computer has witnessed rapid integration of technology during Covid-19 in the Computer Hardware industry. As one of the leading players in the industry, Shanghai East-China Computer needs to keep up with the evolution of technology in the Computer Hardware 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.
Environmental challenges
– Shanghai East-China Computer 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 East-China Computer can take advantage of this fund but it will also bring new competitors in the Computer Hardware industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Shanghai East-China Computer in Computer Hardware industry. The Computer Hardware 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.
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 East-China Computer needs to understand the core reasons impacting the Computer Hardware industry. This will help it in building a better workplace.
Consumer confidence and its impact on Shanghai East-China Computer 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 Computer Hardware industry and other sectors.
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.
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 Shanghai East-China Computer business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Shanghai East-China Computer
– 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 East-China Computer.
Shortening product life cycle
– it is one of the major threat that Shanghai East-China Computer is facing in Computer Hardware sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Shanghai East-China Computer 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 Computer Hardware industry.
Easy access to finance
– Easy access to finance in Computer Hardware industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Shanghai East-China Computer 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 Shanghai East-China Computer Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Shanghai East-China Computer 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 East-China Computer 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 East-China Computer 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 East-China Computer 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 East-China Computer needs to make to build a sustainable competitive advantage.