Shanxi Guoxin Energy B (900913) SWOT Analysis / TOWS Matrix / MBA Resources
Natural Gas Utilities
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Shanxi Guoxin Energy B (China)
Based on various researches at Oak Spring University , Shanxi Guoxin Energy B is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , increasing commodity prices,
technology disruption, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Shanxi Guoxin Energy B
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Shanxi Guoxin Energy B can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shanxi Guoxin Energy B, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shanxi Guoxin Energy B 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 Shanxi Guoxin Energy B can be done for the following purposes –
1. Strategic planning of Shanxi Guoxin Energy B
2. Improving business portfolio management of Shanxi Guoxin Energy B
3. Assessing feasibility of the new initiative in China
4. Making a Natural Gas Utilities sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Shanxi Guoxin Energy B
Strengths of Shanxi Guoxin Energy B | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shanxi Guoxin Energy B are -
Sustainable margins compare to other players in Natural Gas Utilities industry
– Shanxi Guoxin Energy B has clearly differentiated products in the market place. This has enabled Shanxi Guoxin Energy B to fetch slight price premium compare to the competitors in the Natural Gas Utilities industry. The sustainable margins have also helped Shanxi Guoxin Energy B to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy of Shanxi Guoxin Energy B comprises – understanding the underlying the factors in the Natural Gas Utilities 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.
Digital Transformation in Natural Gas Utilities industry
- digital transformation varies from industry to industry. For Shanxi Guoxin Energy B digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shanxi Guoxin Energy B 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.
Superior customer experience
– The customer experience strategy of Shanxi Guoxin Energy B in Natural Gas Utilities industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Shanxi Guoxin Energy B has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Natural Gas Utilities industry. Secondly the value chain collaborators of Shanxi Guoxin Energy B have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Shanxi Guoxin Energy B in the Utilities sector have low bargaining power. Shanxi Guoxin Energy B has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shanxi Guoxin Energy B to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Shanxi Guoxin Energy B 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 Shanxi Guoxin Energy B is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Shanxi Guoxin Energy B emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Shanxi Guoxin Energy B
– The covid-19 pandemic has put organizational resilience at the centre of everthing Shanxi Guoxin Energy B does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Shanxi Guoxin Energy B has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Shanxi Guoxin Energy B 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
– Shanxi Guoxin Energy B 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 Natural Gas Utilities 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.
Effective Research and Development (R&D)
– Shanxi Guoxin Energy B has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Shanxi Guoxin Energy B staying ahead in the Natural Gas Utilities industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Natural Gas Utilities
– Shanxi Guoxin Energy B is one of the leading players in the Natural Gas Utilities industry in China. Over the years it has not only transformed the business landscape in the Natural Gas Utilities industry in China but also across the existing markets. The ability to lead change has enabled Shanxi Guoxin Energy B in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses of Shanxi Guoxin Energy B | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shanxi Guoxin Energy B are -
Workers concerns about automation
– As automation is fast increasing in the Natural Gas Utilities industry, Shanxi Guoxin Energy B 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.
Employees’ less understanding of Shanxi Guoxin Energy B strategy
– From the outside it seems that the employees of Shanxi Guoxin Energy B don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High bargaining power of channel partners in Natural Gas Utilities industry
– because of the regulatory requirements in China, Shanxi Guoxin Energy B 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 Natural Gas Utilities industry.
Slow decision making process
– As mentioned earlier in the report, Shanxi Guoxin Energy B has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Natural Gas Utilities industry over the last five years. Shanxi Guoxin Energy B 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, Shanxi Guoxin Energy B 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 Natural Gas Utilities industry using digital technology.
High dependence on Shanxi Guoxin Energy B ‘s star products
– The top 2 products and services of Shanxi Guoxin Energy B still accounts for major business revenue. This dependence on star products in Natural Gas Utilities industry has resulted into insufficient focus on developing new products, even though Shanxi Guoxin Energy B has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative at Shanxi Guoxin Energy B, in the dynamic environment of Natural Gas Utilities industry it has struggled to respond to the nimble upstart competition. Shanxi Guoxin Energy B 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 Shanxi Guoxin Energy B is dominated by functional specialists. It is not different from other players in the Natural Gas Utilities industry, but Shanxi Guoxin Energy B needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Shanxi Guoxin Energy B to focus more on services in the Natural Gas Utilities industry rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Shanxi Guoxin Energy B 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 to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Shanxi Guoxin Energy B is slow explore the new channels of communication. These new channels of communication can help Shanxi Guoxin Energy B to provide better information regarding Natural Gas Utilities products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Shanxi Guoxin Energy B 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.
Shanxi Guoxin Energy B Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Shanxi Guoxin Energy B are -
Use of Bitcoin and other crypto currencies for transactions in Natural Gas Utilities industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Shanxi Guoxin Energy B in the Natural Gas Utilities industry. Now Shanxi Guoxin Energy B can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Shanxi Guoxin Energy B can develop new processes and procedures in Natural Gas Utilities 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Shanxi Guoxin Energy B 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Shanxi Guoxin Energy B 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 Shanxi Guoxin Energy B to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Shanxi Guoxin Energy B has opened avenues for new revenue streams for the organization in Natural Gas Utilities industry. This can help Shanxi Guoxin Energy B to build a more holistic ecosystem for Shanxi Guoxin Energy B products in the Natural Gas Utilities industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Shanxi Guoxin Energy B in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Natural Gas Utilities industry, and it will provide faster access to the consumers.
Learning at scale
– Online learning technologies has now opened space for Shanxi Guoxin Energy B 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Shanxi Guoxin Energy B can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Natural Gas Utilities industry, but it has also influenced the consumer preferences. Shanxi Guoxin Energy B can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Shanxi Guoxin Energy B can use these opportunities to build new business models that can help the communities that Shanxi Guoxin Energy B operates in. Secondly it can use opportunities from government spending in Natural Gas Utilities sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Shanxi Guoxin Energy B is facing challenges because of the dominance of functional experts in the organization. Shanxi Guoxin Energy B can utilize new technology in the field of Natural Gas Utilities industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Buying journey improvements
– Shanxi Guoxin Energy B can improve the customer journey of consumers in the Natural Gas Utilities 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.
Leveraging digital technologies
– Shanxi Guoxin Energy B 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 Shanxi Guoxin Energy B External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Shanxi Guoxin Energy B are -
Consumer confidence and its impact on Shanxi Guoxin Energy B 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 Natural Gas Utilities industry and other sectors.
Shortening product life cycle
– it is one of the major threat that Shanxi Guoxin Energy B is facing in Natural Gas Utilities 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. Shanxi Guoxin Energy B 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Shanxi Guoxin Energy B 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 Shanxi Guoxin Energy B prominent markets.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Shanxi Guoxin Energy B may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Natural Gas Utilities sector.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Natural Gas Utilities industry are lowering. It can presents Shanxi Guoxin Energy B with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Natural Gas Utilities sector.
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 Shanxi Guoxin Energy B.
Stagnating economy with rate increase
– Shanxi Guoxin Energy B 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 Natural Gas Utilities 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 Shanxi Guoxin Energy B business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Shanxi Guoxin Energy B
– 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 Shanxi Guoxin Energy B.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Shanxi Guoxin Energy B in Natural Gas Utilities industry. The Natural Gas Utilities 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.
Weighted SWOT Analysis of Shanxi Guoxin Energy B Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Shanxi Guoxin Energy B 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 Shanxi Guoxin Energy B 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 Shanxi Guoxin Energy B 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 Shanxi Guoxin Energy B 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 Shanxi Guoxin Energy B needs to make to build a sustainable competitive advantage.