Based on various researches at Oak Spring University , Beijing VRV Software Corp Ltd is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%,
increasing transportation and logistics costs, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Beijing VRV Software Corp Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Beijing VRV Software Corp Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Beijing VRV Software Corp Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Beijing VRV Software Corp Ltd 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 Beijing VRV Software Corp Ltd can be done for the following purposes –
1. Strategic planning of Beijing VRV Software Corp Ltd
2. Improving business portfolio management of Beijing VRV Software Corp Ltd
3. Assessing feasibility of the new initiative in China
4. Making a Software & Programming sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Beijing VRV Software Corp Ltd
Strengths of Beijing VRV Software Corp Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Beijing VRV Software Corp Ltd are -
Superior customer experience
– The customer experience strategy of Beijing VRV Software Corp Ltd in Software & Programming industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Beijing VRV Software Corp Ltd 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 Beijing VRV Software Corp Ltd comprises – understanding the underlying the factors in the Software & Programming 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.
Innovation driven organization
– Beijing VRV Software Corp Ltd is one of the most innovative firm in Software & Programming sector.
Effective Research and Development (R&D)
– Beijing VRV Software Corp Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Beijing VRV Software Corp Ltd staying ahead in the Software & Programming industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Beijing VRV Software Corp Ltd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Beijing VRV Software Corp Ltd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Beijing VRV Software Corp Ltd is one of the leading players in the Software & Programming 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.
Diverse revenue streams
– Beijing VRV Software Corp Ltd is present in almost all the verticals within the Software & Programming industry. This has provided Beijing VRV Software Corp Ltd 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.
Analytics focus
– Beijing VRV Software Corp Ltd 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 Software & Programming 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.
Digital Transformation in Software & Programming industry
- digital transformation varies from industry to industry. For Beijing VRV Software Corp Ltd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Beijing VRV Software Corp Ltd 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.
Ability to lead change in Software & Programming
– Beijing VRV Software Corp Ltd is one of the leading players in the Software & Programming industry in China. Over the years it has not only transformed the business landscape in the Software & Programming industry in China but also across the existing markets. The ability to lead change has enabled Beijing VRV Software Corp Ltd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Beijing VRV Software Corp Ltd
– The covid-19 pandemic has put organizational resilience at the centre of everthing Beijing VRV Software Corp Ltd does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses of Beijing VRV Software Corp Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Beijing VRV Software Corp Ltd are -
Skills based hiring in Software & Programming industry
– The stress on hiring functional specialists at Beijing VRV Software Corp Ltd 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.
No frontier risks strategy
– From the 10K / annual statement of Beijing VRV Software Corp Ltd, it seems that company is thinking out the frontier risks that can impact Software & Programming 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.
Interest costs
– Compare to the competition, Beijing VRV Software Corp Ltd 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 Beijing VRV Software Corp Ltd is dominated by functional specialists. It is not different from other players in the Software & Programming industry, but Beijing VRV Software Corp Ltd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Beijing VRV Software Corp Ltd to focus more on services in the Software & Programming industry rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Beijing VRV Software Corp Ltd is slow explore the new channels of communication. These new channels of communication can help Beijing VRV Software Corp Ltd to provide better information regarding Software & Programming products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee of Beijing VRV Software Corp Ltd is just above the Software & Programming 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.
High bargaining power of channel partners in Software & Programming industry
– because of the regulatory requirements in China, Beijing VRV Software Corp Ltd 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 Software & Programming industry.
High dependence on Beijing VRV Software Corp Ltd ‘s star products
– The top 2 products and services of Beijing VRV Software Corp Ltd still accounts for major business revenue. This dependence on star products in Software & Programming industry has resulted into insufficient focus on developing new products, even though Beijing VRV Software Corp Ltd has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Beijing VRV Software Corp Ltd 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 Software & Programming industry using digital technology.
Slow to strategic competitive environment developments
– As Beijing VRV Software Corp Ltd is one of the leading players in the Software & Programming industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Software & Programming industry in last five years.
Ability to respond to the competition
– As the decision making is very deliberative at Beijing VRV Software Corp Ltd, in the dynamic environment of Software & Programming industry it has struggled to respond to the nimble upstart competition. Beijing VRV Software Corp Ltd has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Beijing VRV Software Corp Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Beijing VRV Software Corp Ltd are -
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 Beijing VRV Software Corp Ltd 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Software & Programming industry, but it has also influenced the consumer preferences. Beijing VRV Software Corp Ltd can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Beijing VRV Software Corp Ltd has opened avenues for new revenue streams for the organization in Software & Programming industry. This can help Beijing VRV Software Corp Ltd to build a more holistic ecosystem for Beijing VRV Software Corp Ltd products in the Software & Programming industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Software & Programming industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Beijing VRV Software Corp Ltd 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. Beijing VRV Software Corp Ltd 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Beijing VRV Software Corp Ltd 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 Beijing VRV Software Corp Ltd to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Beijing VRV Software Corp Ltd 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 Software & Programming industry.
Use of Bitcoin and other crypto currencies for transactions in Software & Programming industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Beijing VRV Software Corp Ltd in the Software & Programming industry. Now Beijing VRV Software Corp Ltd can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Beijing VRV Software Corp Ltd can use these opportunities to build new business models that can help the communities that Beijing VRV Software Corp Ltd operates in. Secondly it can use opportunities from government spending in Software & Programming sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Beijing VRV Software Corp Ltd 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.
Using analytics as competitive advantage
– Beijing VRV Software Corp Ltd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Software & Programming sector. This continuous investment in analytics has enabled Beijing VRV Software Corp Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help Beijing VRV Software Corp Ltd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Beijing VRV Software Corp Ltd can develop new processes and procedures in Software & Programming 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Beijing VRV Software Corp Ltd can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Beijing VRV Software Corp Ltd 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.
Threats Beijing VRV Software Corp Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Beijing VRV Software Corp Ltd are -
Increasing wage structure of Beijing VRV Software Corp Ltd
– 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 Beijing VRV Software Corp Ltd.
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. Beijing VRV Software Corp Ltd needs to understand the core reasons impacting the Software & Programming industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Beijing VRV Software Corp Ltd in Software & Programming industry. The Software & Programming 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.
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.
High dependence on third party suppliers
– Beijing VRV Software Corp Ltd 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.
Shortening product life cycle
– it is one of the major threat that Beijing VRV Software Corp Ltd is facing in Software & Programming sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Beijing VRV Software Corp Ltd.
Stagnating economy with rate increase
– Beijing VRV Software Corp Ltd 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 Software & Programming industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Beijing VRV Software Corp Ltd may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Software & Programming sector.
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.
Technology acceleration in Forth Industrial Revolution
– Beijing VRV Software Corp Ltd has witnessed rapid integration of technology during Covid-19 in the Software & Programming industry. As one of the leading players in the industry, Beijing VRV Software Corp Ltd needs to keep up with the evolution of technology in the Software & Programming 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.
Environmental challenges
– Beijing VRV Software Corp Ltd 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. Beijing VRV Software Corp Ltd can take advantage of this fund but it will also bring new competitors in the Software & Programming industry.
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 Beijing VRV Software Corp Ltd in the Software & Programming sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Beijing VRV Software Corp Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Beijing VRV Software Corp Ltd 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 Beijing VRV Software Corp Ltd 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 Beijing VRV Software Corp Ltd 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 Beijing VRV Software Corp Ltd 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 Beijing VRV Software Corp Ltd needs to make to build a sustainable competitive advantage.