SWOT Analysis / TOWS Matrix for Shenzhen Wongtee (China)
Based on various researches at Oak Spring University , Shenzhen Wongtee is operating in a macro-environment that has been destablized by – banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, increasing government debt because of Covid-19 spendings,
talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Shenzhen Wongtee can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shenzhen Wongtee, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shenzhen Wongtee 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 Shenzhen Wongtee can be done for the following purposes –
1. Strategic planning of Shenzhen Wongtee
2. Improving business portfolio management of Shenzhen Wongtee
3. Assessing feasibility of the new initiative in China
4. Making a Construction Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Shenzhen Wongtee
Strengths of Shenzhen Wongtee | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shenzhen Wongtee are -
Sustainable margins compare to other players in Construction Services industry
– Shenzhen Wongtee has clearly differentiated products in the market place. This has enabled Shenzhen Wongtee to fetch slight price premium compare to the competitors in the Construction Services industry. The sustainable margins have also helped Shenzhen Wongtee to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Shenzhen Wongtee in the Capital Goods sector have low bargaining power. Shenzhen Wongtee has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shenzhen Wongtee to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Construction Services industry
- digital transformation varies from industry to industry. For Shenzhen Wongtee digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shenzhen Wongtee 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.
Diverse revenue streams
– Shenzhen Wongtee is present in almost all the verticals within the Construction Services industry. This has provided Shenzhen Wongtee 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.
Successful track record of launching new products
– Shenzhen Wongtee has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Shenzhen Wongtee 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.
Learning organization
- Shenzhen Wongtee 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 Shenzhen Wongtee is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Shenzhen Wongtee emphasize – knowledge, initiative, and innovation.
Ability to lead change in Construction Services
– Shenzhen Wongtee is one of the leading players in the Construction Services industry in China. Over the years it has not only transformed the business landscape in the Construction Services industry in China but also across the existing markets. The ability to lead change has enabled Shenzhen Wongtee in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Shenzhen Wongtee has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Shenzhen Wongtee to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Shenzhen Wongtee is one of the most innovative firm in Construction Services sector.
Superior customer experience
– The customer experience strategy of Shenzhen Wongtee in Construction Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management in the Construction Services industry
– Shenzhen Wongtee is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Shenzhen Wongtee 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 Construction Services 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.
Weaknesses of Shenzhen Wongtee | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shenzhen Wongtee are -
Low market penetration in new markets
– Outside its home market of China, Shenzhen Wongtee needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Shenzhen Wongtee 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.
Slow decision making process
– As mentioned earlier in the report, Shenzhen Wongtee has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Construction Services industry over the last five years. Shenzhen Wongtee 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.
Capital Spending Reduction
– Even during the low interest decade, Shenzhen Wongtee 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 Construction Services industry using digital technology.
Workers concerns about automation
– As automation is fast increasing in the Construction Services industry, Shenzhen Wongtee 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.
Lack of clear differentiation of Shenzhen Wongtee products
– To increase the profitability and margins on the products, Shenzhen Wongtee needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Shenzhen Wongtee has some of the most successful models in the Construction Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Shenzhen Wongtee should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative at Shenzhen Wongtee, in the dynamic environment of Construction Services industry it has struggled to respond to the nimble upstart competition. Shenzhen Wongtee has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on Shenzhen Wongtee ‘s star products
– The top 2 products and services of Shenzhen Wongtee still accounts for major business revenue. This dependence on star products in Construction Services industry has resulted into insufficient focus on developing new products, even though Shenzhen Wongtee has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee of Shenzhen Wongtee is just above the Construction Services 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Shenzhen Wongtee is slow explore the new channels of communication. These new channels of communication can help Shenzhen Wongtee to provide better information regarding Construction Services products and services. It can also build an online community to further reach out to potential customers.
Shenzhen Wongtee Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Shenzhen Wongtee are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Shenzhen Wongtee is facing challenges because of the dominance of functional experts in the organization. Shenzhen Wongtee can utilize new technology in the field of Construction Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Using analytics as competitive advantage
– Shenzhen Wongtee has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Construction Services sector. This continuous investment in analytics has enabled Shenzhen Wongtee to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shenzhen Wongtee to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Shenzhen Wongtee 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 Shenzhen Wongtee 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 Shenzhen Wongtee to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Shenzhen Wongtee 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 Construction Services industry.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Shenzhen Wongtee in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Construction Services industry, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Shenzhen Wongtee has opened avenues for new revenue streams for the organization in Construction Services industry. This can help Shenzhen Wongtee to build a more holistic ecosystem for Shenzhen Wongtee products in the Construction Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Shenzhen Wongtee 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 Shenzhen Wongtee to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Shenzhen Wongtee can develop new processes and procedures in Construction Services 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.
Loyalty marketing
– Shenzhen Wongtee 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.
Leveraging digital technologies
– Shenzhen Wongtee 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.
Manufacturing automation
– Shenzhen Wongtee can use the latest technology developments to improve its manufacturing and designing process in Construction Services 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Construction Services industry, but it has also influenced the consumer preferences. Shenzhen Wongtee can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Shenzhen Wongtee External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Shenzhen Wongtee are -
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. Shenzhen Wongtee 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.
Increasing wage structure of Shenzhen Wongtee
– 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 Shenzhen Wongtee.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Shenzhen Wongtee in Construction Services industry. The Construction Services 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Shenzhen Wongtee 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 Shenzhen Wongtee prominent markets.
Technology acceleration in Forth Industrial Revolution
– Shenzhen Wongtee has witnessed rapid integration of technology during Covid-19 in the Construction Services industry. As one of the leading players in the industry, Shenzhen Wongtee needs to keep up with the evolution of technology in the Construction Services sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
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.
Easy access to finance
– Easy access to finance in Construction Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Shenzhen Wongtee can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Shenzhen Wongtee 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 Construction Services industry.
Environmental challenges
– Shenzhen Wongtee 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. Shenzhen Wongtee can take advantage of this fund but it will also bring new competitors in the Construction Services industry.
Consumer confidence and its impact on Shenzhen Wongtee 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 Construction Services industry and other sectors.
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 Shenzhen Wongtee in the Construction Services sector and impact the bottomline of the organization.
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. Shenzhen Wongtee needs to understand the core reasons impacting the Construction Services industry. This will help it in building a better workplace.
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 Shenzhen Wongtee.
Weighted SWOT Analysis of Shenzhen Wongtee Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Shenzhen Wongtee 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 Shenzhen Wongtee 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 Shenzhen Wongtee 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 Shenzhen Wongtee 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 Shenzhen Wongtee needs to make to build a sustainable competitive advantage.