Anhui Heli (600761) SWOT Analysis / TOWS Matrix / MBA Resources
Misc. Capital Goods
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Anhui Heli (China)
Based on various researches at Oak Spring University , Anhui Heli is operating in a macro-environment that has been destablized by – there is backlash against globalization, increasing commodity prices, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels,
cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Anhui Heli can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Anhui Heli, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Anhui Heli 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 Anhui Heli can be done for the following purposes –
1. Strategic planning of Anhui Heli
2. Improving business portfolio management of Anhui Heli
3. Assessing feasibility of the new initiative in China
4. Making a Misc. Capital Goods sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Anhui Heli
Strengths of Anhui Heli | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Anhui Heli are -
High switching costs
– The high switching costs that Anhui Heli 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.
Strong track record of project management in the Misc. Capital Goods industry
– Anhui Heli is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Anhui Heli in the Capital Goods sector have low bargaining power. Anhui Heli has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Anhui Heli to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Anhui Heli has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Anhui Heli 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
– Anhui Heli has one of the best training and development program in Capital Goods industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Sustainable margins compare to other players in Misc. Capital Goods industry
– Anhui Heli has clearly differentiated products in the market place. This has enabled Anhui Heli to fetch slight price premium compare to the competitors in the Misc. Capital Goods industry. The sustainable margins have also helped Anhui Heli to invest into research and development (R&D) and innovation.
Analytics focus
– Anhui Heli 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 Misc. Capital Goods 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.
High brand equity
– Anhui Heli has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Anhui Heli to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Anhui Heli has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Misc. Capital Goods industry. Secondly the value chain collaborators of Anhui Heli have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Anhui Heli is present in almost all the verticals within the Misc. Capital Goods industry. This has provided Anhui Heli 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)
– Anhui Heli has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Anhui Heli staying ahead in the Misc. Capital Goods industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Misc. Capital Goods industry
- digital transformation varies from industry to industry. For Anhui Heli digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Anhui Heli 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 Anhui Heli | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Anhui Heli are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Anhui Heli is slow explore the new channels of communication. These new channels of communication can help Anhui Heli to provide better information regarding Misc. Capital Goods products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, Anhui Heli has high operating costs in the Misc. Capital Goods industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Anhui Heli lucrative customers.
Need for greater diversity
– Anhui Heli 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.
Lack of clear differentiation of Anhui Heli products
– To increase the profitability and margins on the products, Anhui Heli needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on Anhui Heli ‘s star products
– The top 2 products and services of Anhui Heli still accounts for major business revenue. This dependence on star products in Misc. Capital Goods industry has resulted into insufficient focus on developing new products, even though Anhui Heli has relatively successful track record of launching new products.
Skills based hiring in Misc. Capital Goods industry
– The stress on hiring functional specialists at Anhui Heli 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 Anhui Heli, in the dynamic environment of Misc. Capital Goods industry it has struggled to respond to the nimble upstart competition. Anhui Heli has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners in Misc. Capital Goods industry
– because of the regulatory requirements in China, Anhui Heli 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 Misc. Capital Goods industry.
Capital Spending Reduction
– Even during the low interest decade, Anhui Heli has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Misc. Capital Goods industry using digital technology.
Slow decision making process
– As mentioned earlier in the report, Anhui Heli has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Misc. Capital Goods industry over the last five years. Anhui Heli 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 Anhui Heli is dominated by functional specialists. It is not different from other players in the Misc. Capital Goods industry, but Anhui Heli needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Anhui Heli to focus more on services in the Misc. Capital Goods industry rather than just following the product oriented approach.
Anhui Heli Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Anhui Heli are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Anhui Heli 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 Anhui Heli to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Anhui Heli 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.
Buying journey improvements
– Anhui Heli can improve the customer journey of consumers in the Misc. Capital Goods 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.
Creating value in data economy
– The success of analytics program of Anhui Heli has opened avenues for new revenue streams for the organization in Misc. Capital Goods industry. This can help Anhui Heli to build a more holistic ecosystem for Anhui Heli products in the Misc. Capital Goods industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Misc. Capital Goods industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Anhui Heli 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. Anhui Heli 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.
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 Anhui Heli 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.
Use of Bitcoin and other crypto currencies for transactions in Misc. Capital Goods industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Anhui Heli in the Misc. Capital Goods industry. Now Anhui Heli can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Anhui Heli can use the latest technology developments to improve its manufacturing and designing process in Misc. Capital Goods 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.
Using analytics as competitive advantage
– Anhui Heli has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Misc. Capital Goods sector. This continuous investment in analytics has enabled Anhui Heli to build a competitive advantage using analytics. The analytics driven competitive advantage can help Anhui Heli to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Anhui Heli can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Anhui Heli 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Anhui Heli can use these opportunities to build new business models that can help the communities that Anhui Heli operates in. Secondly it can use opportunities from government spending in Misc. Capital Goods sector.
Building a culture of innovation
– managers at Anhui Heli 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 Misc. Capital Goods industry.
Threats Anhui Heli External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Anhui Heli are -
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.
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 Anhui Heli in the Misc. Capital Goods sector and impact the bottomline 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 Anhui Heli business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Anhui Heli 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 Misc. Capital Goods industry regulations.
Stagnating economy with rate increase
– Anhui Heli 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 Misc. Capital Goods industry.
Technology acceleration in Forth Industrial Revolution
– Anhui Heli has witnessed rapid integration of technology during Covid-19 in the Misc. Capital Goods industry. As one of the leading players in the industry, Anhui Heli needs to keep up with the evolution of technology in the Misc. Capital Goods 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.
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. Anhui Heli needs to understand the core reasons impacting the Misc. Capital Goods industry. This will help it in building a better workplace.
Increasing wage structure of Anhui Heli
– 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 Anhui Heli.
Environmental challenges
– Anhui Heli 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. Anhui Heli can take advantage of this fund but it will also bring new competitors in the Misc. Capital Goods industry.
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. Anhui Heli 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.
Consumer confidence and its impact on Anhui Heli 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 Misc. Capital Goods industry and other sectors.
Shortening product life cycle
– it is one of the major threat that Anhui Heli is facing in Misc. Capital Goods sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Misc. Capital Goods industry are lowering. It can presents Anhui Heli with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Misc. Capital Goods sector.
Weighted SWOT Analysis of Anhui Heli Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Anhui Heli 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 Anhui Heli 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 Anhui Heli 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 Anhui Heli 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 Anhui Heli needs to make to build a sustainable competitive advantage.
