Based on various researches at Oak Spring University , Qingdao Hiron Commercial Cold Chain is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, wage bills are increasing, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google,
increasing energy prices, central banks are concerned over increasing inflation, 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 -
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 -
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.
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.
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.
Workers concerns about automation
– As automation is fast increasing in the industry, Qingdao Hiron Commercial Cold Chain needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Lack of clear differentiation of Qingdao Hiron Commercial Cold Chain products
– To increase the profitability and margins on the products, Qingdao Hiron Commercial Cold Chain needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
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.
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 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.
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 -
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.
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.
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.
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.
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.
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.
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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Qingdao Hiron Commercial Cold Chain 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 Qingdao Hiron Commercial Cold Chain to hire the very best people irrespective of their geographical location.
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.
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 Qingdao Hiron Commercial Cold Chain 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.
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 -
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.
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.
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.
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.
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.
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.
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.
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 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.
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.
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.
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.
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.
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.