Based on various researches at Oak Spring University , Qingdao Hiron Commercial Cold Chain is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, increasing commodity prices, increasing energy prices,
wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, 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 -
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.
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.
Ability to recruit top talent
– Qingdao Hiron Commercial Cold Chain is one of the leading players in the 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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Qingdao Hiron Commercial Cold Chain 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.
Analytics focus
– Qingdao Hiron Commercial Cold Chain 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 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.
Innovation driven organization
– Qingdao Hiron Commercial Cold Chain is one of the most innovative firm in sector.
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.
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.
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.
Diverse revenue streams
– Qingdao Hiron Commercial Cold Chain is present in almost all the verticals within the industry. This has provided Qingdao Hiron Commercial Cold Chain 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.
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.
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 -
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 Qingdao Hiron Commercial Cold Chain supply chain. Even after few cautionary changes, Qingdao Hiron Commercial Cold Chain is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Qingdao Hiron Commercial Cold Chain vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Qingdao Hiron Commercial Cold Chain 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.
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.
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.
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.
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.
Aligning sales with marketing
– From the outside it seems that Qingdao Hiron Commercial Cold Chain needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department at Qingdao Hiron Commercial Cold Chain can leverage the sales team experience to cultivate customer relationships as Qingdao Hiron Commercial Cold Chain is planning to shift buying processes online.
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.
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.
High bargaining power of channel partners in industry
– because of the regulatory requirements in China, Qingdao Hiron Commercial Cold Chain 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 industry.
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.
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 -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Qingdao Hiron Commercial Cold Chain can use these opportunities to build new business models that can help the communities that Qingdao Hiron Commercial Cold Chain operates in. Secondly it can use opportunities from government spending in sector.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Qingdao Hiron Commercial Cold Chain in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the industry, and it will provide faster access to the consumers.
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.
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.
Manufacturing automation
– Qingdao Hiron Commercial Cold Chain can use the latest technology developments to improve its manufacturing and designing process in 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.
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.
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.
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.
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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Qingdao Hiron Commercial Cold Chain 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. Qingdao Hiron Commercial Cold Chain 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in industry, but it has also influenced the consumer preferences. Qingdao Hiron Commercial Cold Chain 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 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.
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 -
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.
Regulatory challenges
– Qingdao Hiron Commercial Cold Chain 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 industry regulations.
Increasing wage structure of Qingdao Hiron Commercial Cold Chain
– 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 Qingdao Hiron Commercial Cold Chain.
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.
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.
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. Qingdao Hiron Commercial Cold Chain needs to understand the core reasons impacting the industry. This will help it in building a better workplace.
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 Qingdao Hiron Commercial Cold Chain.
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 Qingdao Hiron Commercial Cold Chain business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
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 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
– 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.