Zhengzhou Sino Crystal Diamond (300064) SWOT Analysis / TOWS Matrix / MBA Resources
Metal Mining
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Zhengzhou Sino Crystal Diamond (China)
Based on various researches at Oak Spring University , Zhengzhou Sino Crystal Diamond is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, wage bills are increasing, increasing commodity prices, increasing energy prices, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%,
increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Zhengzhou Sino Crystal Diamond
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Zhengzhou Sino Crystal Diamond can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Zhengzhou Sino Crystal Diamond, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Zhengzhou Sino Crystal Diamond 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 Zhengzhou Sino Crystal Diamond can be done for the following purposes –
1. Strategic planning of Zhengzhou Sino Crystal Diamond
2. Improving business portfolio management of Zhengzhou Sino Crystal Diamond
3. Assessing feasibility of the new initiative in China
4. Making a Metal Mining sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Zhengzhou Sino Crystal Diamond
Strengths of Zhengzhou Sino Crystal Diamond | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Zhengzhou Sino Crystal Diamond are -
Learning organization
- Zhengzhou Sino Crystal Diamond 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 Zhengzhou Sino Crystal Diamond is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Zhengzhou Sino Crystal Diamond emphasize – knowledge, initiative, and innovation.
Strong track record of project management in the Metal Mining industry
– Zhengzhou Sino Crystal Diamond is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Zhengzhou Sino Crystal Diamond is one of the most innovative firm in Metal Mining sector.
Organizational Resilience of Zhengzhou Sino Crystal Diamond
– The covid-19 pandemic has put organizational resilience at the centre of everthing Zhengzhou Sino Crystal Diamond does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy of Zhengzhou Sino Crystal Diamond comprises – understanding the underlying the factors in the Metal Mining 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 Zhengzhou Sino Crystal Diamond in Metal Mining industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Metal Mining industry
- digital transformation varies from industry to industry. For Zhengzhou Sino Crystal Diamond digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Zhengzhou Sino Crystal Diamond 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.
Training and development
– Zhengzhou Sino Crystal Diamond has one of the best training and development program in Basic Materials 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 Metal Mining industry
– Zhengzhou Sino Crystal Diamond has clearly differentiated products in the market place. This has enabled Zhengzhou Sino Crystal Diamond to fetch slight price premium compare to the competitors in the Metal Mining industry. The sustainable margins have also helped Zhengzhou Sino Crystal Diamond to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Zhengzhou Sino Crystal Diamond 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.
Low bargaining power of suppliers
– Suppliers of Zhengzhou Sino Crystal Diamond in the Basic Materials sector have low bargaining power. Zhengzhou Sino Crystal Diamond has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Zhengzhou Sino Crystal Diamond to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Zhengzhou Sino Crystal Diamond is present in almost all the verticals within the Metal Mining industry. This has provided Zhengzhou Sino Crystal Diamond 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.
Weaknesses of Zhengzhou Sino Crystal Diamond | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Zhengzhou Sino Crystal Diamond are -
High dependence on Zhengzhou Sino Crystal Diamond ‘s star products
– The top 2 products and services of Zhengzhou Sino Crystal Diamond still accounts for major business revenue. This dependence on star products in Metal Mining industry has resulted into insufficient focus on developing new products, even though Zhengzhou Sino Crystal Diamond has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee of Zhengzhou Sino Crystal Diamond is just above the Metal Mining 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 operating costs
– Compare to the competitors, Zhengzhou Sino Crystal Diamond has high operating costs in the Metal Mining industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Zhengzhou Sino Crystal Diamond lucrative customers.
Lack of clear differentiation of Zhengzhou Sino Crystal Diamond products
– To increase the profitability and margins on the products, Zhengzhou Sino Crystal Diamond needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Zhengzhou Sino Crystal Diamond 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 Metal Mining industry using digital technology.
Slow decision making process
– As mentioned earlier in the report, Zhengzhou Sino Crystal Diamond has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Metal Mining industry over the last five years. Zhengzhou Sino Crystal Diamond 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Zhengzhou Sino Crystal Diamond is slow explore the new channels of communication. These new channels of communication can help Zhengzhou Sino Crystal Diamond to provide better information regarding Metal Mining products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– From the outside it seems that Zhengzhou Sino Crystal Diamond needs to have more collaboration between its sales team and marketing team. Sales professionals in the Metal Mining industry have deep experience in developing customer relationships. Marketing department at Zhengzhou Sino Crystal Diamond can leverage the sales team experience to cultivate customer relationships as Zhengzhou Sino Crystal Diamond is planning to shift buying processes online.
No frontier risks strategy
– From the 10K / annual statement of Zhengzhou Sino Crystal Diamond, it seems that company is thinking out the frontier risks that can impact Metal Mining 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.
Need for greater diversity
– Zhengzhou Sino Crystal Diamond 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.
Interest costs
– Compare to the competition, Zhengzhou Sino Crystal Diamond has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Zhengzhou Sino Crystal Diamond Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Zhengzhou Sino Crystal Diamond are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Zhengzhou Sino Crystal Diamond 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Metal Mining industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Zhengzhou Sino Crystal Diamond 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. Zhengzhou Sino Crystal Diamond 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Zhengzhou Sino Crystal Diamond can use these opportunities to build new business models that can help the communities that Zhengzhou Sino Crystal Diamond operates in. Secondly it can use opportunities from government spending in Metal Mining sector.
Building a culture of innovation
– managers at Zhengzhou Sino Crystal Diamond 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 Metal Mining industry.
Loyalty marketing
– Zhengzhou Sino Crystal Diamond 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Zhengzhou Sino Crystal Diamond 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 Zhengzhou Sino Crystal Diamond to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Zhengzhou Sino Crystal Diamond can use the latest technology developments to improve its manufacturing and designing process in Metal Mining 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Zhengzhou Sino Crystal Diamond is facing challenges because of the dominance of functional experts in the organization. Zhengzhou Sino Crystal Diamond can utilize new technology in the field of Metal Mining industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Metal Mining industry, but it has also influenced the consumer preferences. Zhengzhou Sino Crystal Diamond can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Zhengzhou Sino Crystal Diamond has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Metal Mining sector. This continuous investment in analytics has enabled Zhengzhou Sino Crystal Diamond to build a competitive advantage using analytics. The analytics driven competitive advantage can help Zhengzhou Sino Crystal Diamond to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Zhengzhou Sino Crystal Diamond 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.
Use of Bitcoin and other crypto currencies for transactions in Metal Mining industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Zhengzhou Sino Crystal Diamond in the Metal Mining industry. Now Zhengzhou Sino Crystal Diamond can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Zhengzhou Sino Crystal Diamond can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Threats Zhengzhou Sino Crystal Diamond External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Zhengzhou Sino Crystal Diamond are -
Shortening product life cycle
– it is one of the major threat that Zhengzhou Sino Crystal Diamond is facing in Metal Mining sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Zhengzhou Sino Crystal Diamond.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Zhengzhou Sino Crystal Diamond may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Metal Mining sector.
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 Zhengzhou Sino Crystal Diamond in the Metal Mining sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Zhengzhou Sino Crystal Diamond 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Metal Mining industry are lowering. It can presents Zhengzhou Sino Crystal Diamond with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Metal Mining sector.
Increasing wage structure of Zhengzhou Sino Crystal Diamond
– 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 Zhengzhou Sino Crystal Diamond.
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 Zhengzhou Sino Crystal Diamond business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Zhengzhou Sino Crystal Diamond 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. Zhengzhou Sino Crystal Diamond can take advantage of this fund but it will also bring new competitors in the Metal Mining industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Zhengzhou Sino Crystal Diamond 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 Zhengzhou Sino Crystal Diamond prominent markets.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Zhengzhou Sino Crystal Diamond in Metal Mining industry. The Metal Mining 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.
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.
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. Zhengzhou Sino Crystal Diamond 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.
Weighted SWOT Analysis of Zhengzhou Sino Crystal Diamond Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Zhengzhou Sino Crystal Diamond 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 Zhengzhou Sino Crystal Diamond 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 Zhengzhou Sino Crystal Diamond 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 Zhengzhou Sino Crystal Diamond 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 Zhengzhou Sino Crystal Diamond needs to make to build a sustainable competitive advantage.