Tongyu Heavy Industry (300185) SWOT Analysis / TOWS Matrix / MBA Resources
Misc. Fabricated Products
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Tongyu Heavy Industry (China)
Based on various researches at Oak Spring University , Tongyu Heavy Industry is operating in a macro-environment that has been destablized by – cloud computing is disrupting traditional business models, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation,
talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Tongyu Heavy Industry
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Tongyu Heavy Industry can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tongyu Heavy Industry, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tongyu Heavy Industry 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 Tongyu Heavy Industry can be done for the following purposes –
1. Strategic planning of Tongyu Heavy Industry
2. Improving business portfolio management of Tongyu Heavy Industry
3. Assessing feasibility of the new initiative in China
4. Making a Misc. Fabricated Products sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Tongyu Heavy Industry
Strengths of Tongyu Heavy Industry | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tongyu Heavy Industry are -
Highly skilled collaborators
– Tongyu Heavy Industry has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Misc. Fabricated Products industry. Secondly the value chain collaborators of Tongyu Heavy Industry have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Tongyu Heavy Industry in the Basic Materials sector have low bargaining power. Tongyu Heavy Industry has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tongyu Heavy Industry to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Tongyu Heavy Industry has one of the best training and development program in Basic Materials industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Analytics focus
– Tongyu Heavy Industry 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 Misc. Fabricated Products 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)
– Tongyu Heavy Industry has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Tongyu Heavy Industry staying ahead in the Misc. Fabricated Products industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy of Tongyu Heavy Industry comprises – understanding the underlying the factors in the Misc. Fabricated Products 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.
Organizational Resilience of Tongyu Heavy Industry
– The covid-19 pandemic has put organizational resilience at the centre of everthing Tongyu Heavy Industry does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Tongyu Heavy Industry 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.
Diverse revenue streams
– Tongyu Heavy Industry is present in almost all the verticals within the Misc. Fabricated Products industry. This has provided Tongyu Heavy Industry 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.
Cross disciplinary teams
– Horizontal connected teams at the Tongyu Heavy Industry 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.
Successful track record of launching new products
– Tongyu Heavy Industry has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Tongyu Heavy Industry 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.
Digital Transformation in Misc. Fabricated Products industry
- digital transformation varies from industry to industry. For Tongyu Heavy Industry digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Tongyu Heavy Industry 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.
Weaknesses of Tongyu Heavy Industry | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Tongyu Heavy Industry are -
High cash cycle compare to competitors
Tongyu Heavy Industry has a high cash cycle compare to other players in the Misc. Fabricated Products industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Capital Spending Reduction
– Even during the low interest decade, Tongyu Heavy Industry 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 Misc. Fabricated Products industry using digital technology.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Tongyu Heavy Industry is slow explore the new channels of communication. These new channels of communication can help Tongyu Heavy Industry to provide better information regarding Misc. Fabricated Products products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Tongyu Heavy Industry 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.
Lack of clear differentiation of Tongyu Heavy Industry products
– To increase the profitability and margins on the products, Tongyu Heavy Industry needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of China, Tongyu Heavy Industry needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative at Tongyu Heavy Industry, in the dynamic environment of Misc. Fabricated Products industry it has struggled to respond to the nimble upstart competition. Tongyu Heavy Industry has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on Tongyu Heavy Industry ‘s star products
– The top 2 products and services of Tongyu Heavy Industry still accounts for major business revenue. This dependence on star products in Misc. Fabricated Products industry has resulted into insufficient focus on developing new products, even though Tongyu Heavy Industry has relatively successful track record of launching new products.
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 Tongyu Heavy Industry supply chain. Even after few cautionary changes, Tongyu Heavy Industry is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Tongyu Heavy Industry vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Tongyu Heavy Industry 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.
Increasing silos among functional specialists
– The organizational structure of Tongyu Heavy Industry is dominated by functional specialists. It is not different from other players in the Misc. Fabricated Products industry, but Tongyu Heavy Industry needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Tongyu Heavy Industry to focus more on services in the Misc. Fabricated Products industry rather than just following the product oriented approach.
Tongyu Heavy Industry Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Tongyu Heavy Industry are -
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Misc. Fabricated Products industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Tongyu Heavy Industry 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. Tongyu Heavy Industry 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.
Manufacturing automation
– Tongyu Heavy Industry can use the latest technology developments to improve its manufacturing and designing process in Misc. Fabricated Products 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.
Better consumer reach
– The expansion of the 5G network will help Tongyu Heavy Industry to increase its market reach. Tongyu Heavy Industry 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Misc. Fabricated Products industry, but it has also influenced the consumer preferences. Tongyu Heavy Industry 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, Tongyu Heavy Industry can use these opportunities to build new business models that can help the communities that Tongyu Heavy Industry operates in. Secondly it can use opportunities from government spending in Misc. Fabricated Products sector.
Using analytics as competitive advantage
– Tongyu Heavy Industry has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Misc. Fabricated Products sector. This continuous investment in analytics has enabled Tongyu Heavy Industry to build a competitive advantage using analytics. The analytics driven competitive advantage can help Tongyu Heavy Industry to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Tongyu Heavy Industry 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 Tongyu Heavy Industry to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Tongyu Heavy Industry is facing challenges because of the dominance of functional experts in the organization. Tongyu Heavy Industry can utilize new technology in the field of Misc. Fabricated Products industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Buying journey improvements
– Tongyu Heavy Industry can improve the customer journey of consumers in the Misc. Fabricated Products 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.
Creating value in data economy
– The success of analytics program of Tongyu Heavy Industry has opened avenues for new revenue streams for the organization in Misc. Fabricated Products industry. This can help Tongyu Heavy Industry to build a more holistic ecosystem for Tongyu Heavy Industry products in the Misc. Fabricated Products industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Tongyu Heavy Industry 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 Tongyu Heavy Industry to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Tongyu Heavy Industry 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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Tongyu Heavy Industry can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Tongyu Heavy Industry External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Tongyu Heavy Industry are -
High dependence on third party suppliers
– Tongyu Heavy Industry 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.
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 Tongyu Heavy Industry in the Misc. Fabricated Products sector and impact the bottomline of the organization.
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 Tongyu Heavy Industry business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Tongyu Heavy Industry 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 Misc. Fabricated Products industry regulations.
Environmental challenges
– Tongyu Heavy Industry 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. Tongyu Heavy Industry can take advantage of this fund but it will also bring new competitors in the Misc. Fabricated Products 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.
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 Tongyu Heavy Industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Misc. Fabricated Products industry are lowering. It can presents Tongyu Heavy Industry with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Misc. Fabricated Products sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Tongyu Heavy Industry 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 Tongyu Heavy Industry prominent markets.
Easy access to finance
– Easy access to finance in Misc. Fabricated Products industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Tongyu Heavy Industry can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Tongyu Heavy Industry has witnessed rapid integration of technology during Covid-19 in the Misc. Fabricated Products industry. As one of the leading players in the industry, Tongyu Heavy Industry needs to keep up with the evolution of technology in the Misc. Fabricated Products 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 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. Tongyu Heavy Industry needs to understand the core reasons impacting the Misc. Fabricated Products industry. This will help it in building a better workplace.
Increasing wage structure of Tongyu Heavy Industry
– 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 Tongyu Heavy Industry.
Weighted SWOT Analysis of Tongyu Heavy Industry Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Tongyu Heavy Industry 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 Tongyu Heavy Industry 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 Tongyu Heavy Industry 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 Tongyu Heavy Industry 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 Tongyu Heavy Industry needs to make to build a sustainable competitive advantage.