Based on various researches at Oak Spring University , HMT Xiamen Tech Materials is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, technology disruption, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, etc
Introduction to SWOT Analysis of HMT Xiamen Tech Materials
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that HMT Xiamen Tech Materials can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the HMT Xiamen Tech Materials, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which HMT Xiamen Tech Materials 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 HMT Xiamen Tech Materials can be done for the following purposes –
1. Strategic planning of HMT Xiamen Tech Materials
2. Improving business portfolio management of HMT Xiamen Tech Materials
3. Assessing feasibility of the new initiative in China
4. Making a Textiles - Non Apparel sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of HMT Xiamen Tech Materials
Strengths of HMT Xiamen Tech Materials | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of HMT Xiamen Tech Materials are -
Low bargaining power of suppliers
– Suppliers of HMT Xiamen Tech Materials in the Consumer Cyclical sector have low bargaining power. HMT Xiamen Tech Materials has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps HMT Xiamen Tech Materials to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Textiles - Non Apparel industry
- digital transformation varies from industry to industry. For HMT Xiamen Tech Materials digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. HMT Xiamen Tech Materials 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.
Successful track record of launching new products
– HMT Xiamen Tech Materials has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. HMT Xiamen Tech Materials has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Diverse revenue streams
– HMT Xiamen Tech Materials is present in almost all the verticals within the Textiles - Non Apparel industry. This has provided HMT Xiamen Tech Materials 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.
Learning organization
- HMT Xiamen Tech Materials is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at HMT Xiamen Tech Materials is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at HMT Xiamen Tech Materials emphasize – knowledge, initiative, and innovation.
Ability to lead change in Textiles - Non Apparel
– HMT Xiamen Tech Materials is one of the leading players in the Textiles - Non Apparel industry in China. Over the years it has not only transformed the business landscape in the Textiles - Non Apparel industry in China but also across the existing markets. The ability to lead change has enabled HMT Xiamen Tech Materials in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– HMT Xiamen Tech Materials is one of the leading players in the Textiles - Non Apparel 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.
High brand equity
– HMT Xiamen Tech Materials has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled HMT Xiamen Tech Materials to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– HMT Xiamen Tech Materials has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Textiles - Non Apparel industry. Secondly the value chain collaborators of HMT Xiamen Tech Materials have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that HMT Xiamen Tech Materials 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.
Effective Research and Development (R&D)
– HMT Xiamen Tech Materials has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – HMT Xiamen Tech Materials staying ahead in the Textiles - Non Apparel industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– HMT Xiamen Tech Materials 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 Textiles - Non Apparel 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.
Weaknesses of HMT Xiamen Tech Materials | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of HMT Xiamen Tech Materials are -
Aligning sales with marketing
– From the outside it seems that HMT Xiamen Tech Materials needs to have more collaboration between its sales team and marketing team. Sales professionals in the Textiles - Non Apparel industry have deep experience in developing customer relationships. Marketing department at HMT Xiamen Tech Materials can leverage the sales team experience to cultivate customer relationships as HMT Xiamen Tech Materials is planning to shift buying processes online.
Lack of clear differentiation of HMT Xiamen Tech Materials products
– To increase the profitability and margins on the products, HMT Xiamen Tech Materials needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the Textiles - Non Apparel industry, HMT Xiamen Tech Materials 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.
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 HMT Xiamen Tech Materials supply chain. Even after few cautionary changes, HMT Xiamen Tech Materials is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left HMT Xiamen Tech Materials vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, HMT Xiamen Tech Materials has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Textiles - Non Apparel industry over the last five years. HMT Xiamen Tech Materials even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Low market penetration in new markets
– Outside its home market of China, HMT Xiamen Tech Materials needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though HMT Xiamen Tech Materials has some of the most successful models in the Textiles - Non Apparel industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. HMT Xiamen Tech Materials should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As HMT Xiamen Tech Materials is one of the leading players in the Textiles - Non Apparel industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Textiles - Non Apparel industry in last five years.
High operating costs
– Compare to the competitors, HMT Xiamen Tech Materials has high operating costs in the Textiles - Non Apparel industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract HMT Xiamen Tech Materials lucrative customers.
Need for greater diversity
– HMT Xiamen Tech Materials 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 HMT Xiamen Tech Materials is just above the Textiles - Non Apparel 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.
HMT Xiamen Tech Materials Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of HMT Xiamen Tech Materials are -
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. HMT Xiamen Tech Materials 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 HMT Xiamen Tech Materials 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
– HMT Xiamen Tech Materials 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.
Buying journey improvements
– HMT Xiamen Tech Materials can improve the customer journey of consumers in the Textiles - Non Apparel 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, HMT Xiamen Tech Materials is facing challenges because of the dominance of functional experts in the organization. HMT Xiamen Tech Materials can utilize new technology in the field of Textiles - Non Apparel industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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 HMT Xiamen Tech Materials 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.
Building a culture of innovation
– managers at HMT Xiamen Tech Materials 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 Textiles - Non Apparel industry.
Using analytics as competitive advantage
– HMT Xiamen Tech Materials has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Textiles - Non Apparel sector. This continuous investment in analytics has enabled HMT Xiamen Tech Materials to build a competitive advantage using analytics. The analytics driven competitive advantage can help HMT Xiamen Tech Materials to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, HMT Xiamen Tech Materials 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.
Learning at scale
– Online learning technologies has now opened space for HMT Xiamen Tech Materials 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 HMT Xiamen Tech Materials has opened avenues for new revenue streams for the organization in Textiles - Non Apparel industry. This can help HMT Xiamen Tech Materials to build a more holistic ecosystem for HMT Xiamen Tech Materials products in the Textiles - Non Apparel industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– HMT Xiamen Tech Materials can use the latest technology developments to improve its manufacturing and designing process in Textiles - Non Apparel 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.
Developing new processes and practices
– HMT Xiamen Tech Materials can develop new processes and procedures in Textiles - Non Apparel 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.
Threats HMT Xiamen Tech Materials External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of HMT Xiamen Tech Materials are -
Stagnating economy with rate increase
– HMT Xiamen Tech Materials 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 Textiles - Non Apparel industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for HMT Xiamen Tech Materials in Textiles - Non Apparel industry. The Textiles - Non Apparel 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.
Easy access to finance
– Easy access to finance in Textiles - Non Apparel industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. HMT Xiamen Tech Materials can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 HMT Xiamen Tech Materials.
Shortening product life cycle
– it is one of the major threat that HMT Xiamen Tech Materials is facing in Textiles - Non Apparel sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. HMT Xiamen Tech Materials 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.
Increasing wage structure of HMT Xiamen Tech Materials
– 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 HMT Xiamen Tech Materials.
High dependence on third party suppliers
– HMT Xiamen Tech Materials high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for HMT Xiamen Tech Materials in the Textiles - Non Apparel sector and impact the bottomline of the organization.
Consumer confidence and its impact on HMT Xiamen Tech Materials demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in Textiles - Non Apparel industry and other sectors.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, HMT Xiamen Tech Materials 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 HMT Xiamen Tech Materials 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, HMT Xiamen Tech Materials may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Textiles - Non Apparel sector.
Weighted SWOT Analysis of HMT Xiamen Tech Materials Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at HMT Xiamen Tech Materials 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 HMT Xiamen Tech Materials 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 HMT Xiamen Tech Materials 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 HMT Xiamen Tech Materials 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 HMT Xiamen Tech Materials needs to make to build a sustainable competitive advantage.