SWOT Analysis / TOWS Matrix for HuBei SanFeng Intelligent (China)
Based on various researches at Oak Spring University , HuBei SanFeng Intelligent is operating in a macro-environment that has been destablized by – banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, increasing energy prices, increasing household debt because of falling income levels,
competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, etc
Introduction to SWOT Analysis of HuBei SanFeng Intelligent
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that HuBei SanFeng Intelligent can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the HuBei SanFeng Intelligent, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which HuBei SanFeng Intelligent 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 HuBei SanFeng Intelligent can be done for the following purposes –
1. Strategic planning of HuBei SanFeng Intelligent
2. Improving business portfolio management of HuBei SanFeng Intelligent
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 HuBei SanFeng Intelligent
Strengths of HuBei SanFeng Intelligent | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of HuBei SanFeng Intelligent are -
Learning organization
- HuBei SanFeng Intelligent 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 HuBei SanFeng Intelligent is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at HuBei SanFeng Intelligent emphasize – knowledge, initiative, and innovation.
Organizational Resilience of HuBei SanFeng Intelligent
– The covid-19 pandemic has put organizational resilience at the centre of everthing HuBei SanFeng Intelligent does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the HuBei SanFeng Intelligent 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.
Digital Transformation in Misc. Capital Goods industry
- digital transformation varies from industry to industry. For HuBei SanFeng Intelligent digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. HuBei SanFeng Intelligent has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Superior customer experience
– The customer experience strategy of HuBei SanFeng Intelligent in Misc. Capital Goods industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– HuBei SanFeng Intelligent has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – HuBei SanFeng Intelligent 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.
Low bargaining power of suppliers
– Suppliers of HuBei SanFeng Intelligent in the Capital Goods sector have low bargaining power. HuBei SanFeng Intelligent has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps HuBei SanFeng Intelligent to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Misc. Capital Goods industry
– HuBei SanFeng Intelligent has clearly differentiated products in the market place. This has enabled HuBei SanFeng Intelligent to fetch slight price premium compare to the competitors in the Misc. Capital Goods industry. The sustainable margins have also helped HuBei SanFeng Intelligent to invest into research and development (R&D) and innovation.
Strong track record of project management in the Misc. Capital Goods industry
– HuBei SanFeng Intelligent is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that HuBei SanFeng Intelligent 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.
Successful track record of launching new products
– HuBei SanFeng Intelligent has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. HuBei SanFeng Intelligent 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.
Analytics focus
– HuBei SanFeng Intelligent 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.
Weaknesses of HuBei SanFeng Intelligent | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of HuBei SanFeng Intelligent are -
Increasing silos among functional specialists
– The organizational structure of HuBei SanFeng Intelligent is dominated by functional specialists. It is not different from other players in the Misc. Capital Goods industry, but HuBei SanFeng Intelligent needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help HuBei SanFeng Intelligent to focus more on services in the Misc. Capital Goods industry rather than just following the product oriented approach.
High dependence on HuBei SanFeng Intelligent ‘s star products
– The top 2 products and services of HuBei SanFeng Intelligent 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 HuBei SanFeng Intelligent has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, HuBei SanFeng Intelligent 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 HuBei SanFeng Intelligent lucrative customers.
Interest costs
– Compare to the competition, HuBei SanFeng Intelligent 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, HuBei SanFeng Intelligent is slow explore the new channels of communication. These new channels of communication can help HuBei SanFeng Intelligent 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.
Need for greater diversity
– HuBei SanFeng Intelligent 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.
Compensation and incentives
– The revenue per employee of HuBei SanFeng Intelligent is just above the Misc. Capital Goods 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.
High bargaining power of channel partners in Misc. Capital Goods industry
– because of the regulatory requirements in China, HuBei SanFeng Intelligent 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.
No frontier risks strategy
– From the 10K / annual statement of HuBei SanFeng Intelligent, it seems that company is thinking out the frontier risks that can impact Misc. Capital Goods 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.
Ability to respond to the competition
– As the decision making is very deliberative at HuBei SanFeng Intelligent, in the dynamic environment of Misc. Capital Goods industry it has struggled to respond to the nimble upstart competition. HuBei SanFeng Intelligent has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ less understanding of HuBei SanFeng Intelligent strategy
– From the outside it seems that the employees of HuBei SanFeng Intelligent 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.
HuBei SanFeng Intelligent Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of HuBei SanFeng Intelligent are -
Better consumer reach
– The expansion of the 5G network will help HuBei SanFeng Intelligent to increase its market reach. HuBei SanFeng Intelligent 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Misc. Capital Goods industry, but it has also influenced the consumer preferences. HuBei SanFeng Intelligent can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, HuBei SanFeng Intelligent can use these opportunities to build new business models that can help the communities that HuBei SanFeng Intelligent operates in. Secondly it can use opportunities from government spending in Misc. Capital Goods sector.
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 HuBei SanFeng Intelligent in the Misc. Capital Goods industry. Now HuBei SanFeng Intelligent can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for HuBei SanFeng Intelligent 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.
Developing new processes and practices
– HuBei SanFeng Intelligent can develop new processes and procedures in Misc. Capital Goods 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, HuBei SanFeng Intelligent 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, HuBei SanFeng Intelligent 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 HuBei SanFeng Intelligent to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. HuBei SanFeng Intelligent 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. HuBei SanFeng Intelligent 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.
Creating value in data economy
– The success of analytics program of HuBei SanFeng Intelligent has opened avenues for new revenue streams for the organization in Misc. Capital Goods industry. This can help HuBei SanFeng Intelligent to build a more holistic ecosystem for HuBei SanFeng Intelligent products in the Misc. Capital Goods industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– HuBei SanFeng Intelligent 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, HuBei SanFeng Intelligent is facing challenges because of the dominance of functional experts in the organization. HuBei SanFeng Intelligent can utilize new technology in the field of Misc. Capital Goods industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Leveraging digital technologies
– HuBei SanFeng Intelligent 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.
Threats HuBei SanFeng Intelligent External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of HuBei SanFeng Intelligent are -
Increasing wage structure of HuBei SanFeng Intelligent
– 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 HuBei SanFeng Intelligent.
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.
Environmental challenges
– HuBei SanFeng Intelligent 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. HuBei SanFeng Intelligent can take advantage of this fund but it will also bring new competitors in the Misc. Capital Goods 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 HuBei SanFeng Intelligent business can come under increasing regulations regarding data privacy, data security, etc.
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 HuBei SanFeng Intelligent in the Misc. Capital Goods sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that HuBei SanFeng Intelligent is facing in Misc. Capital Goods sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– HuBei SanFeng Intelligent 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, HuBei SanFeng Intelligent may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Misc. Capital Goods sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for HuBei SanFeng Intelligent in Misc. Capital Goods industry. The Misc. Capital Goods 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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Misc. Capital Goods industry are lowering. It can presents HuBei SanFeng Intelligent 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.
Consumer confidence and its impact on HuBei SanFeng Intelligent 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, HuBei SanFeng Intelligent 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 HuBei SanFeng Intelligent prominent markets.
Weighted SWOT Analysis of HuBei SanFeng Intelligent Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at HuBei SanFeng Intelligent 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 HuBei SanFeng Intelligent 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 HuBei SanFeng Intelligent 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 HuBei SanFeng Intelligent 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 HuBei SanFeng Intelligent needs to make to build a sustainable competitive advantage.