SWOT Analysis / TOWS Matrix for Chengdu Santai Holding (China)
Based on various researches at Oak Spring University , Chengdu Santai Holding is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs,
geopolitical disruptions, technology disruption, etc
Introduction to SWOT Analysis of Chengdu Santai Holding
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Chengdu Santai Holding can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Chengdu Santai Holding, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Chengdu Santai Holding 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 Chengdu Santai Holding can be done for the following purposes –
1. Strategic planning of Chengdu Santai Holding
2. Improving business portfolio management of Chengdu Santai Holding
3. Assessing feasibility of the new initiative in China
4. Making a Security Systems & Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Chengdu Santai Holding
Strengths of Chengdu Santai Holding | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Chengdu Santai Holding are -
Low bargaining power of suppliers
– Suppliers of Chengdu Santai Holding in the Services sector have low bargaining power. Chengdu Santai Holding has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Chengdu Santai Holding to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Security Systems & Services industry
– Chengdu Santai Holding has clearly differentiated products in the market place. This has enabled Chengdu Santai Holding to fetch slight price premium compare to the competitors in the Security Systems & Services industry. The sustainable margins have also helped Chengdu Santai Holding to invest into research and development (R&D) and innovation.
Organizational Resilience of Chengdu Santai Holding
– The covid-19 pandemic has put organizational resilience at the centre of everthing Chengdu Santai Holding does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Chengdu Santai Holding has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Chengdu Santai Holding 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.
Cross disciplinary teams
– Horizontal connected teams at the Chengdu Santai Holding 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.
Learning organization
- Chengdu Santai Holding 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 Chengdu Santai Holding is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Chengdu Santai Holding emphasize – knowledge, initiative, and innovation.
Ability to lead change in Security Systems & Services
– Chengdu Santai Holding is one of the leading players in the Security Systems & Services industry in China. Over the years it has not only transformed the business landscape in the Security Systems & Services industry in China but also across the existing markets. The ability to lead change has enabled Chengdu Santai Holding in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Chengdu Santai Holding is present in almost all the verticals within the Security Systems & Services industry. This has provided Chengdu Santai Holding 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 brand equity
– Chengdu Santai Holding has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Chengdu Santai Holding to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management in the Security Systems & Services industry
– Chengdu Santai Holding is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Chengdu Santai Holding is one of the most innovative firm in Security Systems & Services sector.
High switching costs
– The high switching costs that Chengdu Santai Holding 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 Chengdu Santai Holding | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Chengdu Santai Holding are -
Products dominated business model
– Even though Chengdu Santai Holding has some of the most successful models in the Security Systems & Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Chengdu Santai Holding should strive to include more intangible value offerings along with its core products and services.
Employees’ less understanding of Chengdu Santai Holding strategy
– From the outside it seems that the employees of Chengdu Santai Holding 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 operating costs
– Compare to the competitors, Chengdu Santai Holding has high operating costs in the Security Systems & Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Chengdu Santai Holding lucrative customers.
Lack of clear differentiation of Chengdu Santai Holding products
– To increase the profitability and margins on the products, Chengdu Santai Holding needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Chengdu Santai Holding 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 Security Systems & Services industry using digital technology.
Compensation and incentives
– The revenue per employee of Chengdu Santai Holding is just above the Security Systems & Services industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High bargaining power of channel partners in Security Systems & Services industry
– because of the regulatory requirements in China, Chengdu Santai Holding 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 Security Systems & Services industry.
Skills based hiring in Security Systems & Services industry
– The stress on hiring functional specialists at Chengdu Santai Holding 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.
Need for greater diversity
– Chengdu Santai Holding 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.
Low market penetration in new markets
– Outside its home market of China, Chengdu Santai Holding needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– From the outside it seems that Chengdu Santai Holding needs to have more collaboration between its sales team and marketing team. Sales professionals in the Security Systems & Services industry have deep experience in developing customer relationships. Marketing department at Chengdu Santai Holding can leverage the sales team experience to cultivate customer relationships as Chengdu Santai Holding is planning to shift buying processes online.
Chengdu Santai Holding Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Chengdu Santai Holding are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Chengdu Santai Holding can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Use of Bitcoin and other crypto currencies for transactions in Security Systems & Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Chengdu Santai Holding in the Security Systems & Services industry. Now Chengdu Santai Holding can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Chengdu Santai Holding 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 Chengdu Santai Holding to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Chengdu Santai Holding 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 Security Systems & Services industry.
Leveraging digital technologies
– Chengdu Santai Holding 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Security Systems & Services industry, but it has also influenced the consumer preferences. Chengdu Santai Holding can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Chengdu Santai Holding can improve the customer journey of consumers in the Security Systems & Services 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.
Better consumer reach
– The expansion of the 5G network will help Chengdu Santai Holding to increase its market reach. Chengdu Santai Holding will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Chengdu Santai Holding is facing challenges because of the dominance of functional experts in the organization. Chengdu Santai Holding can utilize new technology in the field of Security Systems & Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Developing new processes and practices
– Chengdu Santai Holding can develop new processes and procedures in Security Systems & Services 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, Chengdu Santai Holding 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 Chengdu Santai Holding to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Chengdu Santai Holding 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Chengdu Santai Holding can use these opportunities to build new business models that can help the communities that Chengdu Santai Holding operates in. Secondly it can use opportunities from government spending in Security Systems & Services sector.
Threats Chengdu Santai Holding External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Chengdu Santai Holding are -
High dependence on third party suppliers
– Chengdu Santai Holding 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.
Technology acceleration in Forth Industrial Revolution
– Chengdu Santai Holding has witnessed rapid integration of technology during Covid-19 in the Security Systems & Services industry. As one of the leading players in the industry, Chengdu Santai Holding needs to keep up with the evolution of technology in the Security Systems & Services 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.
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 Chengdu Santai Holding.
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.
Stagnating economy with rate increase
– Chengdu Santai Holding 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 Security Systems & Services industry.
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 Chengdu Santai Holding business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Chengdu Santai Holding may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Security Systems & Services sector.
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. Chengdu Santai Holding 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 Chengdu Santai Holding
– 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 Chengdu Santai Holding.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Chengdu Santai Holding 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 Chengdu Santai Holding prominent markets.
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. Chengdu Santai Holding needs to understand the core reasons impacting the Security Systems & Services industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Chengdu Santai Holding is facing in Security Systems & Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Security Systems & Services industry are lowering. It can presents Chengdu Santai Holding with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Security Systems & Services sector.
Weighted SWOT Analysis of Chengdu Santai Holding Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Chengdu Santai Holding 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 Chengdu Santai Holding 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 Chengdu Santai Holding 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 Chengdu Santai Holding 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 Chengdu Santai Holding needs to make to build a sustainable competitive advantage.