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 – talent flight as more people leaving formal jobs, geopolitical disruptions, increasing household debt because of falling income levels, increasing energy prices, technology disruption, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic ,
challanges to central banks by blockchain based private currencies, 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 -
High brand equity
– HuBei SanFeng Intelligent has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled HuBei SanFeng Intelligent to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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.
Innovation driven organization
– HuBei SanFeng Intelligent is one of the most innovative firm in Misc. Capital Goods sector.
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.
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.
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.
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.
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.
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.
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.
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 -
High cash cycle compare to competitors
HuBei SanFeng Intelligent has a high cash cycle compare to other players in the Misc. Capital Goods industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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.
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.
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.
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 HuBei SanFeng Intelligent supply chain. Even after few cautionary changes, HuBei SanFeng Intelligent is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left HuBei SanFeng Intelligent vulnerable to further global disruptions in South East Asia.
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.
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.
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.
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.
Capital Spending Reduction
– Even during the low interest decade, HuBei SanFeng Intelligent 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.
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.
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 -
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.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for HuBei SanFeng Intelligent in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Misc. Capital Goods industry, and it will provide faster access to the consumers.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for HuBei SanFeng Intelligent 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 HuBei SanFeng Intelligent to hire the very best people irrespective of their geographical location.
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.
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.
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.
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.
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.
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.
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 -
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.
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.
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. HuBei SanFeng Intelligent needs to understand the core reasons impacting the Misc. Capital Goods industry. This will help it in building a better workplace.
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.
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.
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.
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.
High dependence on third party suppliers
– HuBei SanFeng Intelligent 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.
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.
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.
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.
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.
