Anhui Hengyuan Coal and Electricity (600971) SWOT Analysis / TOWS Matrix / MBA Resources
Coal
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Anhui Hengyuan Coal and Electricity (China)
Based on various researches at Oak Spring University , Anhui Hengyuan Coal and Electricity is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, supply chains are disrupted by pandemic , increasing household debt because of falling income levels,
technology disruption, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Anhui Hengyuan Coal and Electricity
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Anhui Hengyuan Coal and Electricity can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Anhui Hengyuan Coal and Electricity, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Anhui Hengyuan Coal and Electricity 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 Anhui Hengyuan Coal and Electricity can be done for the following purposes –
1. Strategic planning of Anhui Hengyuan Coal and Electricity
2. Improving business portfolio management of Anhui Hengyuan Coal and Electricity
3. Assessing feasibility of the new initiative in China
4. Making a Coal sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Anhui Hengyuan Coal and Electricity
Strengths of Anhui Hengyuan Coal and Electricity | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Anhui Hengyuan Coal and Electricity are -
High brand equity
– Anhui Hengyuan Coal and Electricity has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Anhui Hengyuan Coal and Electricity to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Coal industry
– Anhui Hengyuan Coal and Electricity has clearly differentiated products in the market place. This has enabled Anhui Hengyuan Coal and Electricity to fetch slight price premium compare to the competitors in the Coal industry. The sustainable margins have also helped Anhui Hengyuan Coal and Electricity to invest into research and development (R&D) and innovation.
Digital Transformation in Coal industry
- digital transformation varies from industry to industry. For Anhui Hengyuan Coal and Electricity digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Anhui Hengyuan Coal and Electricity 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.
Innovation driven organization
– Anhui Hengyuan Coal and Electricity is one of the most innovative firm in Coal sector.
Organizational Resilience of Anhui Hengyuan Coal and Electricity
– The covid-19 pandemic has put organizational resilience at the centre of everthing Anhui Hengyuan Coal and Electricity does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Anhui Hengyuan Coal and Electricity has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Coal industry. Secondly the value chain collaborators of Anhui Hengyuan Coal and Electricity have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Anhui Hengyuan Coal and Electricity 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 Anhui Hengyuan Coal and Electricity is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Anhui Hengyuan Coal and Electricity emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Anhui Hengyuan Coal and Electricity 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.
Analytics focus
– Anhui Hengyuan Coal and Electricity 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 Coal 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.
Diverse revenue streams
– Anhui Hengyuan Coal and Electricity is present in almost all the verticals within the Coal industry. This has provided Anhui Hengyuan Coal and Electricity 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.
Superior customer experience
– The customer experience strategy of Anhui Hengyuan Coal and Electricity in Coal industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Coal
– Anhui Hengyuan Coal and Electricity is one of the leading players in the Coal industry in China. Over the years it has not only transformed the business landscape in the Coal industry in China but also across the existing markets. The ability to lead change has enabled Anhui Hengyuan Coal and Electricity in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses of Anhui Hengyuan Coal and Electricity | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Anhui Hengyuan Coal and Electricity are -
Capital Spending Reduction
– Even during the low interest decade, Anhui Hengyuan Coal and Electricity 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 Coal industry using digital technology.
High cash cycle compare to competitors
Anhui Hengyuan Coal and Electricity has a high cash cycle compare to other players in the Coal industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Ability to respond to the competition
– As the decision making is very deliberative at Anhui Hengyuan Coal and Electricity, in the dynamic environment of Coal industry it has struggled to respond to the nimble upstart competition. Anhui Hengyuan Coal and Electricity has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Anhui Hengyuan Coal and Electricity is dominated by functional specialists. It is not different from other players in the Coal industry, but Anhui Hengyuan Coal and Electricity needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Anhui Hengyuan Coal and Electricity to focus more on services in the Coal industry rather than just following the product oriented approach.
Aligning sales with marketing
– From the outside it seems that Anhui Hengyuan Coal and Electricity needs to have more collaboration between its sales team and marketing team. Sales professionals in the Coal industry have deep experience in developing customer relationships. Marketing department at Anhui Hengyuan Coal and Electricity can leverage the sales team experience to cultivate customer relationships as Anhui Hengyuan Coal and Electricity is planning to shift buying processes online.
Products dominated business model
– Even though Anhui Hengyuan Coal and Electricity has some of the most successful models in the Coal industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Anhui Hengyuan Coal and Electricity should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Anhui Hengyuan Coal and Electricity is one of the leading players in the Coal industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Coal industry in last five years.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Anhui Hengyuan Coal and Electricity is slow explore the new channels of communication. These new channels of communication can help Anhui Hengyuan Coal and Electricity to provide better information regarding Coal products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of China, Anhui Hengyuan Coal and Electricity needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the Coal industry, Anhui Hengyuan Coal and Electricity 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.
High bargaining power of channel partners in Coal industry
– because of the regulatory requirements in China, Anhui Hengyuan Coal and Electricity 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 Coal industry.
Anhui Hengyuan Coal and Electricity Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Anhui Hengyuan Coal and Electricity are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Anhui Hengyuan Coal and Electricity can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Anhui Hengyuan Coal and Electricity to increase its market reach. Anhui Hengyuan Coal and Electricity 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Anhui Hengyuan Coal and Electricity is facing challenges because of the dominance of functional experts in the organization. Anhui Hengyuan Coal and Electricity can utilize new technology in the field of Coal industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Manufacturing automation
– Anhui Hengyuan Coal and Electricity can use the latest technology developments to improve its manufacturing and designing process in Coal 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.
Building a culture of innovation
– managers at Anhui Hengyuan Coal and Electricity 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 Coal industry.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Anhui Hengyuan Coal and Electricity in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Coal industry, and it will provide faster access to the consumers.
Loyalty marketing
– Anhui Hengyuan Coal and Electricity 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.
Learning at scale
– Online learning technologies has now opened space for Anhui Hengyuan Coal and Electricity 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
– Anhui Hengyuan Coal and Electricity can develop new processes and procedures in Coal 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Anhui Hengyuan Coal and Electricity 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 Anhui Hengyuan Coal and Electricity to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Anhui Hengyuan Coal and Electricity 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 Anhui Hengyuan Coal and Electricity to hire the very best people irrespective of their geographical location.
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 Anhui Hengyuan Coal and Electricity 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.
Creating value in data economy
– The success of analytics program of Anhui Hengyuan Coal and Electricity has opened avenues for new revenue streams for the organization in Coal industry. This can help Anhui Hengyuan Coal and Electricity to build a more holistic ecosystem for Anhui Hengyuan Coal and Electricity products in the Coal industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats Anhui Hengyuan Coal and Electricity External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Anhui Hengyuan Coal and Electricity are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Anhui Hengyuan Coal and Electricity may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Coal sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Anhui Hengyuan Coal and Electricity 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 Anhui Hengyuan Coal and Electricity prominent markets.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Stagnating economy with rate increase
– Anhui Hengyuan Coal and Electricity 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 Coal industry.
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. Anhui Hengyuan Coal and Electricity 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.
High dependence on third party suppliers
– Anhui Hengyuan Coal and Electricity 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.
Consumer confidence and its impact on Anhui Hengyuan Coal and Electricity 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 Coal industry and other sectors.
Easy access to finance
– Easy access to finance in Coal industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Anhui Hengyuan Coal and Electricity can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Anhui Hengyuan Coal and Electricity 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. Anhui Hengyuan Coal and Electricity can take advantage of this fund but it will also bring new competitors in the Coal industry.
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. Anhui Hengyuan Coal and Electricity needs to understand the core reasons impacting the Coal industry. This will help it in building a better workplace.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Coal industry are lowering. It can presents Anhui Hengyuan Coal and Electricity with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Coal sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Anhui Hengyuan Coal and Electricity in Coal industry. The Coal 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 Anhui Hengyuan Coal and Electricity Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Anhui Hengyuan Coal and Electricity 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 Anhui Hengyuan Coal and Electricity 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 Anhui Hengyuan Coal and Electricity 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 Anhui Hengyuan Coal and Electricity 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 Anhui Hengyuan Coal and Electricity needs to make to build a sustainable competitive advantage.