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 – increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion,
increasing transportation and logistics costs, increasing commodity prices, 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.
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.
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.
Operational resilience
– The operational resilience strategy of HuBei SanFeng Intelligent comprises – understanding the underlying the factors in the Misc. Capital Goods 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.
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.
Highly skilled collaborators
– HuBei SanFeng Intelligent 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 HuBei SanFeng Intelligent have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– HuBei SanFeng Intelligent is present in almost all the verticals within the Misc. Capital Goods industry. This has provided HuBei SanFeng Intelligent 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.
Ability to recruit top talent
– HuBei SanFeng Intelligent is one of the leading players in the Misc. Capital Goods 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.
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.
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.
Ability to lead change in Misc. Capital Goods
– HuBei SanFeng Intelligent is one of the leading players in the Misc. Capital Goods industry in China. Over the years it has not only transformed the business landscape in the Misc. Capital Goods industry in China but also across the existing markets. The ability to lead change has enabled HuBei SanFeng Intelligent in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– HuBei SanFeng Intelligent 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.
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 -
Low market penetration in new markets
– Outside its home market of China, HuBei SanFeng Intelligent needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
Aligning sales with marketing
– From the outside it seems that HuBei SanFeng Intelligent needs to have more collaboration between its sales team and marketing team. Sales professionals in the Misc. Capital Goods industry have deep experience in developing customer relationships. Marketing department at HuBei SanFeng Intelligent can leverage the sales team experience to cultivate customer relationships as HuBei SanFeng Intelligent is planning to shift buying processes online.
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.
Lack of clear differentiation of HuBei SanFeng Intelligent products
– To increase the profitability and margins on the products, HuBei SanFeng Intelligent needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
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.
Products dominated business model
– Even though HuBei SanFeng Intelligent has some of the most successful models in the Misc. Capital Goods industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. HuBei SanFeng Intelligent should strive to include more intangible value offerings along with its core products and services.
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.
Workers concerns about automation
– As automation is fast increasing in the Misc. Capital Goods industry, HuBei SanFeng Intelligent needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Skills based hiring in Misc. Capital Goods industry
– The stress on hiring functional specialists at HuBei SanFeng Intelligent 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.
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 -
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.
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.
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.
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.
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.
Manufacturing automation
– HuBei SanFeng Intelligent 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.
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. HuBei SanFeng Intelligent can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects HuBei SanFeng Intelligent can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 HuBei SanFeng Intelligent 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.
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.
Using analytics as competitive advantage
– HuBei SanFeng Intelligent 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 HuBei SanFeng Intelligent to build a competitive advantage using analytics. The analytics driven competitive advantage can help HuBei SanFeng Intelligent to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 -
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.
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.
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.
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. HuBei SanFeng Intelligent 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.
Easy access to finance
– Easy access to finance in Misc. Capital Goods industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. HuBei SanFeng Intelligent can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– HuBei SanFeng Intelligent 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.
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.
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.
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.
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.
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.
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.
Technology acceleration in Forth Industrial Revolution
– HuBei SanFeng Intelligent has witnessed rapid integration of technology during Covid-19 in the Misc. Capital Goods industry. As one of the leading players in the industry, HuBei SanFeng Intelligent 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.
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.