Based on various researches at Oak Spring University , Qingdao Hiron Commercial Cold Chain is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization,
increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, etc
Introduction to SWOT Analysis of Qingdao Hiron Commercial Cold Chain
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Qingdao Hiron Commercial Cold Chain can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Qingdao Hiron Commercial Cold Chain, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Qingdao Hiron Commercial Cold Chain 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 Qingdao Hiron Commercial Cold Chain can be done for the following purposes –
1. Strategic planning of Qingdao Hiron Commercial Cold Chain
2. Improving business portfolio management of Qingdao Hiron Commercial Cold Chain
3. Assessing feasibility of the new initiative in China
4. Making a sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Qingdao Hiron Commercial Cold Chain
Strengths of Qingdao Hiron Commercial Cold Chain | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Qingdao Hiron Commercial Cold Chain are -
Superior customer experience
– The customer experience strategy of Qingdao Hiron Commercial Cold Chain in industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in industry
- digital transformation varies from industry to industry. For Qingdao Hiron Commercial Cold Chain digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Qingdao Hiron Commercial Cold Chain 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.
Sustainable margins compare to other players in industry
– Qingdao Hiron Commercial Cold Chain has clearly differentiated products in the market place. This has enabled Qingdao Hiron Commercial Cold Chain to fetch slight price premium compare to the competitors in the industry. The sustainable margins have also helped Qingdao Hiron Commercial Cold Chain to invest into research and development (R&D) and innovation.
Training and development
– Qingdao Hiron Commercial Cold Chain has one of the best training and development program in 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.
Innovation driven organization
– Qingdao Hiron Commercial Cold Chain is one of the most innovative firm in sector.
High switching costs
– The high switching costs that Qingdao Hiron Commercial Cold Chain 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.
Organizational Resilience of Qingdao Hiron Commercial Cold Chain
– The covid-19 pandemic has put organizational resilience at the centre of everthing Qingdao Hiron Commercial Cold Chain does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy of Qingdao Hiron Commercial Cold Chain comprises – understanding the underlying the factors in the 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.
Effective Research and Development (R&D)
– Qingdao Hiron Commercial Cold Chain has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Qingdao Hiron Commercial Cold Chain staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Qingdao Hiron Commercial Cold Chain has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Qingdao Hiron Commercial Cold Chain to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Qingdao Hiron Commercial Cold Chain in the sector have low bargaining power. Qingdao Hiron Commercial Cold Chain has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Qingdao Hiron Commercial Cold Chain to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management in the industry
– Qingdao Hiron Commercial Cold Chain is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses of Qingdao Hiron Commercial Cold Chain | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Qingdao Hiron Commercial Cold Chain are -
Skills based hiring in industry
– The stress on hiring functional specialists at Qingdao Hiron Commercial Cold Chain 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.
Products dominated business model
– Even though Qingdao Hiron Commercial Cold Chain has some of the most successful models in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Qingdao Hiron Commercial Cold Chain should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Qingdao Hiron Commercial Cold Chain has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High dependence on Qingdao Hiron Commercial Cold Chain ‘s star products
– The top 2 products and services of Qingdao Hiron Commercial Cold Chain still accounts for major business revenue. This dependence on star products in industry has resulted into insufficient focus on developing new products, even though Qingdao Hiron Commercial Cold Chain has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of China, Qingdao Hiron Commercial Cold Chain needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Qingdao Hiron Commercial Cold Chain is slow explore the new channels of communication. These new channels of communication can help Qingdao Hiron Commercial Cold Chain to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Increasing silos among functional specialists
– The organizational structure of Qingdao Hiron Commercial Cold Chain is dominated by functional specialists. It is not different from other players in the industry, but Qingdao Hiron Commercial Cold Chain needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Qingdao Hiron Commercial Cold Chain to focus more on services in the industry rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Qingdao Hiron Commercial Cold Chain 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 industry using digital technology.
Need for greater diversity
– Qingdao Hiron Commercial Cold Chain 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.
Compensation and incentives
– The revenue per employee of Qingdao Hiron Commercial Cold Chain is just above the 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.
Employees’ less understanding of Qingdao Hiron Commercial Cold Chain strategy
– From the outside it seems that the employees of Qingdao Hiron Commercial Cold Chain don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Qingdao Hiron Commercial Cold Chain Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Qingdao Hiron Commercial Cold Chain are -
Developing new processes and practices
– Qingdao Hiron Commercial Cold Chain can develop new processes and procedures in 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Qingdao Hiron Commercial Cold Chain is facing challenges because of the dominance of functional experts in the organization. Qingdao Hiron Commercial Cold Chain can utilize new technology in the field of industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Loyalty marketing
– Qingdao Hiron Commercial Cold Chain 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.
Building a culture of innovation
– managers at Qingdao Hiron Commercial Cold Chain 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 industry.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Qingdao Hiron Commercial Cold Chain 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 Qingdao Hiron Commercial Cold Chain to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Qingdao Hiron Commercial Cold Chain can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Qingdao Hiron Commercial Cold Chain 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.
Leveraging digital technologies
– Qingdao Hiron Commercial Cold Chain 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.
Using analytics as competitive advantage
– Qingdao Hiron Commercial Cold Chain has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in sector. This continuous investment in analytics has enabled Qingdao Hiron Commercial Cold Chain to build a competitive advantage using analytics. The analytics driven competitive advantage can help Qingdao Hiron Commercial Cold Chain to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Qingdao Hiron Commercial Cold Chain 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.
Creating value in data economy
– The success of analytics program of Qingdao Hiron Commercial Cold Chain has opened avenues for new revenue streams for the organization in industry. This can help Qingdao Hiron Commercial Cold Chain to build a more holistic ecosystem for Qingdao Hiron Commercial Cold Chain products in the industry by providing – data insight services, data privacy related products, data based consulting services, etc.
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. Qingdao Hiron Commercial Cold Chain can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Qingdao Hiron Commercial Cold Chain can improve the customer journey of consumers in the 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.
Threats Qingdao Hiron Commercial Cold Chain External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Qingdao Hiron Commercial Cold Chain are -
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.
Environmental challenges
– Qingdao Hiron Commercial Cold Chain 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. Qingdao Hiron Commercial Cold Chain can take advantage of this fund but it will also bring new competitors in the industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to industry are lowering. It can presents Qingdao Hiron Commercial Cold Chain with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Qingdao Hiron Commercial Cold Chain in the sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Qingdao Hiron Commercial Cold Chain 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
– Qingdao Hiron Commercial Cold Chain has witnessed rapid integration of technology during Covid-19 in the industry. As one of the leading players in the industry, Qingdao Hiron Commercial Cold Chain needs to keep up with the evolution of technology in the 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.
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. Qingdao Hiron Commercial Cold Chain 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.
Shortening product life cycle
– it is one of the major threat that Qingdao Hiron Commercial Cold Chain is facing in sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Qingdao Hiron Commercial Cold Chain 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 industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Qingdao Hiron Commercial Cold Chain may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Qingdao Hiron Commercial Cold Chain 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 Qingdao Hiron Commercial Cold Chain prominent markets.
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.
High dependence on third party suppliers
– Qingdao Hiron Commercial Cold Chain 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.
Weighted SWOT Analysis of Qingdao Hiron Commercial Cold Chain Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Qingdao Hiron Commercial Cold Chain 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 Qingdao Hiron Commercial Cold Chain 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 Qingdao Hiron Commercial Cold Chain 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 Qingdao Hiron Commercial Cold Chain 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 Qingdao Hiron Commercial Cold Chain needs to make to build a sustainable competitive advantage.