Xinjiang Xintai Natural Gas (603393) SWOT Analysis / TOWS Matrix / MBA Resources
Natural Gas Utilities
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Xinjiang Xintai Natural Gas (China)
Based on various researches at Oak Spring University , Xinjiang Xintai Natural Gas is operating in a macro-environment that has been destablized by – wage bills are increasing, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization,
increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Xinjiang Xintai Natural Gas
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Xinjiang Xintai Natural Gas can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Xinjiang Xintai Natural Gas, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Xinjiang Xintai Natural Gas 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 Xinjiang Xintai Natural Gas can be done for the following purposes –
1. Strategic planning of Xinjiang Xintai Natural Gas
2. Improving business portfolio management of Xinjiang Xintai Natural Gas
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 Xinjiang Xintai Natural Gas
Strengths of Xinjiang Xintai Natural Gas | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Xinjiang Xintai Natural Gas are -
Highly skilled collaborators
– Xinjiang Xintai Natural Gas 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 Xinjiang Xintai Natural Gas have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Xinjiang Xintai Natural Gas 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 Xinjiang Xintai Natural Gas is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Xinjiang Xintai Natural Gas emphasize – knowledge, initiative, and innovation.
Training and development
– Xinjiang Xintai Natural Gas 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.
Successful track record of launching new products
– Xinjiang Xintai Natural Gas has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Xinjiang Xintai Natural Gas 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.
Cross disciplinary teams
– Horizontal connected teams at the Xinjiang Xintai Natural Gas are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Operational resilience
– The operational resilience strategy of Xinjiang Xintai Natural Gas 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.
Ability to lead change in Natural Gas Utilities
– Xinjiang Xintai Natural Gas 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 Xinjiang Xintai Natural Gas in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Xinjiang Xintai Natural Gas 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.
Innovation driven organization
– Xinjiang Xintai Natural Gas is one of the most innovative firm in Natural Gas Utilities sector.
Organizational Resilience of Xinjiang Xintai Natural Gas
– The covid-19 pandemic has put organizational resilience at the centre of everthing Xinjiang Xintai Natural Gas does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management in the Natural Gas Utilities industry
– Xinjiang Xintai Natural Gas is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Natural Gas Utilities industry
– Xinjiang Xintai Natural Gas has clearly differentiated products in the market place. This has enabled Xinjiang Xintai Natural Gas to fetch slight price premium compare to the competitors in the Natural Gas Utilities industry. The sustainable margins have also helped Xinjiang Xintai Natural Gas to invest into research and development (R&D) and innovation.
Weaknesses of Xinjiang Xintai Natural Gas | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Xinjiang Xintai Natural Gas are -
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Xinjiang Xintai Natural Gas supply chain. Even after few cautionary changes, Xinjiang Xintai Natural Gas is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Xinjiang Xintai Natural Gas vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of China, Xinjiang Xintai Natural Gas needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, Xinjiang Xintai Natural Gas 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 Xinjiang Xintai Natural Gas lucrative customers.
High dependence on Xinjiang Xintai Natural Gas ‘s star products
– The top 2 products and services of Xinjiang Xintai Natural Gas 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 Xinjiang Xintai Natural Gas has relatively successful track record of launching new products.
Need for greater diversity
– Xinjiang Xintai Natural Gas 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.
Products dominated business model
– Even though Xinjiang Xintai Natural Gas has some of the most successful models in the Natural Gas Utilities industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Xinjiang Xintai Natural Gas should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Xinjiang Xintai Natural Gas 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. Xinjiang Xintai Natural Gas 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.
Aligning sales with marketing
– From the outside it seems that Xinjiang Xintai Natural Gas 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 Xinjiang Xintai Natural Gas can leverage the sales team experience to cultivate customer relationships as Xinjiang Xintai Natural Gas is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee of Xinjiang Xintai Natural Gas is just above the Natural Gas Utilities 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.
Skills based hiring in Natural Gas Utilities industry
– The stress on hiring functional specialists at Xinjiang Xintai Natural Gas 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 cash cycle compare to competitors
Xinjiang Xintai Natural Gas has a high cash cycle compare to other players in the Natural Gas Utilities industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Xinjiang Xintai Natural Gas Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Xinjiang Xintai Natural Gas are -
Better consumer reach
– The expansion of the 5G network will help Xinjiang Xintai Natural Gas to increase its market reach. Xinjiang Xintai Natural Gas 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Xinjiang Xintai Natural Gas 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 Xinjiang Xintai Natural Gas 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
– Xinjiang Xintai Natural Gas 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, Xinjiang Xintai Natural Gas 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Xinjiang Xintai Natural Gas can use these opportunities to build new business models that can help the communities that Xinjiang Xintai Natural Gas operates in. Secondly it can use opportunities from government spending in Natural Gas Utilities sector.
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 Xinjiang Xintai Natural Gas 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Xinjiang Xintai Natural Gas 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.
Building a culture of innovation
– managers at Xinjiang Xintai Natural Gas 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.
Learning at scale
– Online learning technologies has now opened space for Xinjiang Xintai Natural Gas 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 Xinjiang Xintai Natural Gas can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Xinjiang Xintai Natural Gas 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
– Xinjiang Xintai Natural Gas 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Natural Gas Utilities industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Xinjiang Xintai Natural Gas 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. Xinjiang Xintai Natural Gas 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.
Threats Xinjiang Xintai Natural Gas External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Xinjiang Xintai Natural Gas are -
Regulatory challenges
– Xinjiang Xintai Natural Gas 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Xinjiang Xintai Natural Gas 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Natural Gas Utilities industry are lowering. It can presents Xinjiang Xintai Natural Gas 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.
Consumer confidence and its impact on Xinjiang Xintai Natural Gas 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.
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.
Increasing wage structure of Xinjiang Xintai Natural Gas
– 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 Xinjiang Xintai Natural Gas.
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. Xinjiang Xintai Natural Gas needs to understand the core reasons impacting the Natural Gas Utilities industry. This will help it in building a better workplace.
Environmental challenges
– Xinjiang Xintai Natural Gas 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. Xinjiang Xintai Natural Gas can take advantage of this fund but it will also bring new competitors in the Natural Gas Utilities industry.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Stagnating economy with rate increase
– Xinjiang Xintai Natural Gas 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.
Technology acceleration in Forth Industrial Revolution
– Xinjiang Xintai Natural Gas has witnessed rapid integration of technology during Covid-19 in the Natural Gas Utilities industry. As one of the leading players in the industry, Xinjiang Xintai Natural Gas 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.
High dependence on third party suppliers
– Xinjiang Xintai Natural Gas 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.
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. Xinjiang Xintai Natural Gas 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 Xinjiang Xintai Natural Gas Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Xinjiang Xintai Natural Gas 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 Xinjiang Xintai Natural Gas 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 Xinjiang Xintai Natural Gas 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 Xinjiang Xintai Natural Gas 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 Xinjiang Xintai Natural Gas needs to make to build a sustainable competitive advantage.