Based on various researches at Oak Spring University , Beijing Hezong Science & Tech is operating in a macro-environment that has been destablized by – there is backlash against globalization, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, increasing commodity prices, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, increasing energy prices,
wage bills are increasing, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Beijing Hezong Science & Tech
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Beijing Hezong Science & Tech can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Beijing Hezong Science & Tech, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Beijing Hezong Science & Tech 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 Beijing Hezong Science & Tech can be done for the following purposes –
1. Strategic planning of Beijing Hezong Science & Tech
2. Improving business portfolio management of Beijing Hezong Science & Tech
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 Beijing Hezong Science & Tech
Strengths of Beijing Hezong Science & Tech | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Beijing Hezong Science & Tech are -
Successful track record of launching new products
– Beijing Hezong Science & Tech has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Beijing Hezong Science & Tech 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
– Beijing Hezong Science & Tech 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.
High switching costs
– The high switching costs that Beijing Hezong Science & Tech 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.
Learning organization
- Beijing Hezong Science & Tech 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 Beijing Hezong Science & Tech is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Beijing Hezong Science & Tech emphasize – knowledge, initiative, and innovation.
Training and development
– Beijing Hezong Science & Tech 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
– Beijing Hezong Science & Tech has clearly differentiated products in the market place. This has enabled Beijing Hezong Science & Tech to fetch slight price premium compare to the competitors in the Electronic Instr. & Controls industry. The sustainable margins have also helped Beijing Hezong Science & Tech to invest into research and development (R&D) and innovation.
Innovation driven organization
– Beijing Hezong Science & Tech is one of the most innovative firm in Electronic Instr. & Controls sector.
Effective Research and Development (R&D)
– Beijing Hezong Science & Tech has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Beijing Hezong Science & Tech staying ahead in the Electronic Instr. & Controls industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Beijing Hezong Science & Tech has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Beijing Hezong Science & Tech to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy of Beijing Hezong Science & Tech 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.
Superior customer experience
– The customer experience strategy of Beijing Hezong Science & Tech in Electronic Instr. & Controls industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Beijing Hezong Science & Tech 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 Beijing Hezong Science & Tech have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses of Beijing Hezong Science & Tech | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Beijing Hezong Science & Tech are -
Slow decision making process
– As mentioned earlier in the report, Beijing Hezong Science & Tech has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Electronic Instr. & Controls industry over the last five years. Beijing Hezong Science & Tech even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Compensation and incentives
– The revenue per employee of Beijing Hezong Science & Tech 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.
High cash cycle compare to competitors
Beijing Hezong Science & Tech has a high cash cycle compare to other players in the Electronic Instr. & Controls 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 Beijing Hezong Science & Tech is dominated by functional specialists. It is not different from other players in the Electronic Instr. & Controls industry, but Beijing Hezong Science & Tech needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Beijing Hezong Science & Tech to focus more on services in the Electronic Instr. & Controls industry rather than just following the product oriented approach.
High bargaining power of channel partners in Electronic Instr. & Controls industry
– because of the regulatory requirements in China, Beijing Hezong Science & Tech 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 Electronic Instr. & Controls industry.
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 Beijing Hezong Science & Tech supply chain. Even after few cautionary changes, Beijing Hezong Science & Tech is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Beijing Hezong Science & Tech vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– From the 10K / annual statement of Beijing Hezong Science & Tech, 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.
Skills based hiring in Electronic Instr. & Controls industry
– The stress on hiring functional specialists at Beijing Hezong Science & Tech 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.
High operating costs
– Compare to the competitors, Beijing Hezong Science & Tech 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 Beijing Hezong Science & Tech lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the Electronic Instr. & Controls industry, Beijing Hezong Science & Tech 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.
Need for greater diversity
– Beijing Hezong Science & Tech 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.
Beijing Hezong Science & Tech Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Beijing Hezong Science & Tech are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Beijing Hezong Science & Tech 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.
Building a culture of innovation
– managers at Beijing Hezong Science & Tech can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Electronic Instr. & Controls industry.
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 Beijing Hezong Science & Tech 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Beijing Hezong Science & Tech can use these opportunities to build new business models that can help the communities that Beijing Hezong Science & Tech operates in. Secondly it can use opportunities from government spending in Electronic Instr. & Controls sector.
Learning at scale
– Online learning technologies has now opened space for Beijing Hezong Science & Tech 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Beijing Hezong Science & Tech 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 Beijing Hezong Science & Tech to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Beijing Hezong Science & Tech 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.
Creating value in data economy
– The success of analytics program of Beijing Hezong Science & Tech has opened avenues for new revenue streams for the organization in Electronic Instr. & Controls industry. This can help Beijing Hezong Science & Tech to build a more holistic ecosystem for Beijing Hezong Science & Tech products in the Electronic Instr. & Controls industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Beijing Hezong Science & Tech can improve the customer journey of consumers in the Electronic Instr. & Controls industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Better consumer reach
– The expansion of the 5G network will help Beijing Hezong Science & Tech to increase its market reach. Beijing Hezong Science & Tech 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.
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 Beijing Hezong Science & Tech in the Electronic Instr. & Controls industry. Now Beijing Hezong Science & Tech can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Beijing Hezong Science & Tech 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 Beijing Hezong Science & Tech to build a competitive advantage using analytics. The analytics driven competitive advantage can help Beijing Hezong Science & Tech to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Beijing Hezong Science & Tech 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.
Threats Beijing Hezong Science & Tech External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Beijing Hezong Science & Tech are -
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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. Beijing Hezong Science & Tech can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Beijing Hezong Science & Tech
– 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 Beijing Hezong Science & Tech.
Environmental challenges
– Beijing Hezong Science & Tech 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. Beijing Hezong Science & Tech can take advantage of this fund but it will also bring new competitors in the Electronic Instr. & Controls industry.
Shortening product life cycle
– it is one of the major threat that Beijing Hezong Science & Tech is facing in Electronic Instr. & Controls sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Beijing Hezong Science & Tech 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.
Stagnating economy with rate increase
– Beijing Hezong Science & Tech 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 Beijing Hezong Science & Tech 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 Beijing Hezong Science & Tech 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.
Regulatory challenges
– Beijing Hezong Science & Tech 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Beijing Hezong Science & Tech 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 Beijing Hezong Science & Tech prominent markets.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Beijing Hezong Science & Tech.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Beijing Hezong Science & Tech in Electronic Instr. & Controls industry. The Electronic Instr. & Controls 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.
Weighted SWOT Analysis of Beijing Hezong Science & Tech Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Beijing Hezong Science & Tech 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 Beijing Hezong Science & Tech 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 Beijing Hezong Science & Tech 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 Beijing Hezong Science & Tech 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 Beijing Hezong Science & Tech needs to make to build a sustainable competitive advantage.