SWOT Analysis / TOWS Matrix for Zhejiang Shangfeng Industrial (China)
Based on various researches at Oak Spring University , Zhejiang Shangfeng Industrial is operating in a macro-environment that has been destablized by – technology disruption, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, there is backlash against globalization, geopolitical disruptions,
increasing commodity prices, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Zhejiang Shangfeng Industrial
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Zhejiang Shangfeng Industrial can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Zhejiang Shangfeng Industrial, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Zhejiang Shangfeng Industrial 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 Zhejiang Shangfeng Industrial can be done for the following purposes –
1. Strategic planning of Zhejiang Shangfeng Industrial
2. Improving business portfolio management of Zhejiang Shangfeng Industrial
3. Assessing feasibility of the new initiative in China
4. Making a Electronic Instr. & Controls sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Zhejiang Shangfeng Industrial
Strengths of Zhejiang Shangfeng Industrial | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Zhejiang Shangfeng Industrial are -
Learning organization
- Zhejiang Shangfeng Industrial 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 Zhejiang Shangfeng Industrial is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Zhejiang Shangfeng Industrial emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Zhejiang Shangfeng Industrial is one of the most innovative firm in Electronic Instr. & Controls sector.
Ability to recruit top talent
– Zhejiang Shangfeng Industrial is one of the leading players in the Electronic Instr. & Controls 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.
Training and development
– Zhejiang Shangfeng Industrial has one of the best training and development program in Technology 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 Electronic Instr. & Controls industry
– Zhejiang Shangfeng Industrial has clearly differentiated products in the market place. This has enabled Zhejiang Shangfeng Industrial to fetch slight price premium compare to the competitors in the Electronic Instr. & Controls industry. The sustainable margins have also helped Zhejiang Shangfeng Industrial to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Zhejiang Shangfeng Industrial 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 Zhejiang Shangfeng Industrial 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.
Successful track record of launching new products
– Zhejiang Shangfeng Industrial has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Zhejiang Shangfeng Industrial 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.
Operational resilience
– The operational resilience strategy of Zhejiang Shangfeng Industrial comprises – understanding the underlying the factors in the Electronic Instr. & Controls 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 Electronic Instr. & Controls industry
- digital transformation varies from industry to industry. For Zhejiang Shangfeng Industrial digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Zhejiang Shangfeng Industrial 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.
Highly skilled collaborators
– Zhejiang Shangfeng Industrial has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Electronic Instr. & Controls industry. Secondly the value chain collaborators of Zhejiang Shangfeng Industrial have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Zhejiang Shangfeng Industrial 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 Electronic Instr. & Controls 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.
Weaknesses of Zhejiang Shangfeng Industrial | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Zhejiang Shangfeng Industrial are -
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 Zhejiang Shangfeng Industrial supply chain. Even after few cautionary changes, Zhejiang Shangfeng Industrial is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Zhejiang Shangfeng Industrial vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of China, Zhejiang Shangfeng Industrial needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Zhejiang Shangfeng Industrial has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Zhejiang Shangfeng Industrial is slow explore the new channels of communication. These new channels of communication can help Zhejiang Shangfeng Industrial to provide better information regarding Electronic Instr. & Controls products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Zhejiang Shangfeng Industrial has some of the most successful models in the Electronic Instr. & Controls industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Zhejiang Shangfeng Industrial should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee of Zhejiang Shangfeng Industrial is just above the Electronic Instr. & Controls 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.
Capital Spending Reduction
– Even during the low interest decade, Zhejiang Shangfeng Industrial 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 Electronic Instr. & Controls industry using digital technology.
No frontier risks strategy
– From the 10K / annual statement of Zhejiang Shangfeng Industrial, it seems that company is thinking out the frontier risks that can impact Electronic Instr. & Controls industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Aligning sales with marketing
– From the outside it seems that Zhejiang Shangfeng Industrial needs to have more collaboration between its sales team and marketing team. Sales professionals in the Electronic Instr. & Controls industry have deep experience in developing customer relationships. Marketing department at Zhejiang Shangfeng Industrial can leverage the sales team experience to cultivate customer relationships as Zhejiang Shangfeng Industrial is planning to shift buying processes online.
High operating costs
– Compare to the competitors, Zhejiang Shangfeng Industrial has high operating costs in the Electronic Instr. & Controls industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Zhejiang Shangfeng Industrial lucrative customers.
Employees’ less understanding of Zhejiang Shangfeng Industrial strategy
– From the outside it seems that the employees of Zhejiang Shangfeng Industrial don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Zhejiang Shangfeng Industrial Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Zhejiang Shangfeng Industrial are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Zhejiang Shangfeng Industrial in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Electronic Instr. & Controls industry, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Zhejiang Shangfeng Industrial has opened avenues for new revenue streams for the organization in Electronic Instr. & Controls industry. This can help Zhejiang Shangfeng Industrial to build a more holistic ecosystem for Zhejiang Shangfeng Industrial products in the Electronic Instr. & Controls industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Zhejiang Shangfeng Industrial 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.
Using analytics as competitive advantage
– Zhejiang Shangfeng Industrial has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Electronic Instr. & Controls sector. This continuous investment in analytics has enabled Zhejiang Shangfeng Industrial to build a competitive advantage using analytics. The analytics driven competitive advantage can help Zhejiang Shangfeng Industrial to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Zhejiang Shangfeng Industrial is facing challenges because of the dominance of functional experts in the organization. Zhejiang Shangfeng Industrial can utilize new technology in the field of Electronic Instr. & Controls industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Leveraging digital technologies
– Zhejiang Shangfeng Industrial 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.
Better consumer reach
– The expansion of the 5G network will help Zhejiang Shangfeng Industrial to increase its market reach. Zhejiang Shangfeng Industrial 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.
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. Zhejiang Shangfeng Industrial can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Zhejiang Shangfeng Industrial 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.
Manufacturing automation
– Zhejiang Shangfeng Industrial can use the latest technology developments to improve its manufacturing and designing process in Electronic Instr. & Controls 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.
Loyalty marketing
– Zhejiang Shangfeng Industrial 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.
Use of Bitcoin and other crypto currencies for transactions in Electronic Instr. & Controls industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Zhejiang Shangfeng Industrial in the Electronic Instr. & Controls industry. Now Zhejiang Shangfeng Industrial can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Zhejiang Shangfeng Industrial can develop new processes and procedures in Electronic Instr. & Controls 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.
Threats Zhejiang Shangfeng Industrial External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Zhejiang Shangfeng Industrial are -
Environmental challenges
– Zhejiang Shangfeng Industrial 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. Zhejiang Shangfeng Industrial can take advantage of this fund but it will also bring new competitors in the Electronic Instr. & Controls 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.
High dependence on third party suppliers
– Zhejiang Shangfeng Industrial high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Technology acceleration in Forth Industrial Revolution
– Zhejiang Shangfeng Industrial has witnessed rapid integration of technology during Covid-19 in the Electronic Instr. & Controls industry. As one of the leading players in the industry, Zhejiang Shangfeng Industrial needs to keep up with the evolution of technology in the Electronic Instr. & Controls 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.
Regulatory challenges
– Zhejiang Shangfeng Industrial 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 Electronic Instr. & Controls industry regulations.
Easy access to finance
– Easy access to finance in Electronic Instr. & Controls industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Zhejiang Shangfeng Industrial can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Zhejiang Shangfeng Industrial in the Electronic Instr. & Controls sector and impact the bottomline of the organization.
Consumer confidence and its impact on Zhejiang Shangfeng Industrial 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 Electronic Instr. & Controls 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.
Stagnating economy with rate increase
– Zhejiang Shangfeng Industrial 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 Electronic Instr. & Controls industry.
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 Zhejiang Shangfeng Industrial business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Electronic Instr. & Controls industry are lowering. It can presents Zhejiang Shangfeng Industrial with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Electronic Instr. & Controls sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Zhejiang Shangfeng Industrial may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Electronic Instr. & Controls sector.
Weighted SWOT Analysis of Zhejiang Shangfeng Industrial Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Zhejiang Shangfeng Industrial 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 Zhejiang Shangfeng Industrial 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 Zhejiang Shangfeng Industrial 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 Zhejiang Shangfeng Industrial 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 Zhejiang Shangfeng Industrial needs to make to build a sustainable competitive advantage.