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 – digital marketing is dominated by two big players Facebook and Google, increasing energy prices, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, technology disruption, central banks are concerned over increasing inflation, there is backlash against globalization,
increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, 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 -
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.
Diverse revenue streams
– Shanxi Guoxin Energy B is present in almost all the verticals within the Natural Gas Utilities industry. This has provided Shanxi Guoxin Energy B 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.
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.
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.
Ability to recruit top talent
– Shanxi Guoxin Energy B is one of the leading players in the Natural Gas Utilities industry in China. It is in a position to attract the best talent available in China. The firm has a robust talent identification program that helps in identifying the brightest.
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.
Training and development
– Shanxi Guoxin Energy B has one of the best training and development program in Utilities 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.
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.
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.
High brand equity
– Shanxi Guoxin Energy B has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Shanxi Guoxin Energy B to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Shanxi Guoxin Energy B is one of the most innovative firm in Natural Gas Utilities sector.
High switching costs
– The high switching costs that Shanxi Guoxin Energy B 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.
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 -
Aligning sales with marketing
– From the outside it seems that Shanxi Guoxin Energy B needs to have more collaboration between its sales team and marketing team. Sales professionals in the Natural Gas Utilities industry have deep experience in developing customer relationships. Marketing department at Shanxi Guoxin Energy B can leverage the sales team experience to cultivate customer relationships as Shanxi Guoxin Energy B is planning to shift buying processes online.
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.
Skills based hiring in Natural Gas Utilities industry
– The stress on hiring functional specialists at Shanxi Guoxin Energy B has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High operating costs
– Compare to the competitors, Shanxi Guoxin Energy B has high operating costs in the Natural Gas Utilities industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Shanxi Guoxin Energy B lucrative customers.
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.
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.
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.
Low market penetration in new markets
– Outside its home market of China, Shanxi Guoxin Energy B needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As Shanxi Guoxin Energy B is one of the leading players in the Natural Gas Utilities industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Natural Gas Utilities industry in last five years.
No frontier risks strategy
– From the 10K / annual statement of Shanxi Guoxin Energy B, it seems that company is thinking out the frontier risks that can impact Natural Gas Utilities 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.
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.
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 -
Manufacturing automation
– Shanxi Guoxin Energy B can use the latest technology developments to improve its manufacturing and designing process in Natural Gas Utilities 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.
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.
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.
Building a culture of innovation
– managers at Shanxi Guoxin Energy B 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 Natural Gas Utilities industry.
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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Shanxi Guoxin Energy B 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 Shanxi Guoxin Energy B to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Shanxi Guoxin Energy B 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.
Better consumer reach
– The expansion of the 5G network will help Shanxi Guoxin Energy B to increase its market reach. Shanxi Guoxin Energy B 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.
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.
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.
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 -
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.
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.
High dependence on third party suppliers
– Shanxi Guoxin Energy B 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.
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.
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. Shanxi Guoxin Energy B needs to understand the core reasons impacting the Natural Gas Utilities industry. This will help it in building a better workplace.
Regulatory challenges
– Shanxi Guoxin Energy B needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Natural Gas Utilities industry regulations.
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. 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.
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 acceleration in Forth Industrial Revolution
– Shanxi Guoxin Energy B has witnessed rapid integration of technology during Covid-19 in the Natural Gas Utilities industry. As one of the leading players in the industry, Shanxi Guoxin Energy B needs to keep up with the evolution of technology in the Natural Gas Utilities 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.
Easy access to finance
– Easy access to finance in Natural Gas Utilities industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Shanxi Guoxin Energy B can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
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.