SWOT Analysis / TOWS Matrix for Xiangxue Pharmaceutical (China)
Based on various researches at Oak Spring University , Xiangxue Pharmaceutical is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, technology disruption, there is backlash against globalization, cloud computing is disrupting traditional business models, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing,
talent flight as more people leaving formal jobs, increasing energy prices, etc
Introduction to SWOT Analysis of Xiangxue Pharmaceutical
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Xiangxue Pharmaceutical can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Xiangxue Pharmaceutical, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Xiangxue Pharmaceutical 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 Xiangxue Pharmaceutical can be done for the following purposes –
1. Strategic planning of Xiangxue Pharmaceutical
2. Improving business portfolio management of Xiangxue Pharmaceutical
3. Assessing feasibility of the new initiative in China
4. Making a Biotechnology & Drugs sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Xiangxue Pharmaceutical
Strengths of Xiangxue Pharmaceutical | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Xiangxue Pharmaceutical are -
Analytics focus
– Xiangxue Pharmaceutical 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 Biotechnology & Drugs 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.
Training and development
– Xiangxue Pharmaceutical has one of the best training and development program in Healthcare 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.
Ability to recruit top talent
– Xiangxue Pharmaceutical is one of the leading players in the Biotechnology & Drugs 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.
Ability to lead change in Biotechnology & Drugs
– Xiangxue Pharmaceutical is one of the leading players in the Biotechnology & Drugs industry in China. Over the years it has not only transformed the business landscape in the Biotechnology & Drugs industry in China but also across the existing markets. The ability to lead change has enabled Xiangxue Pharmaceutical in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Xiangxue Pharmaceutical
– The covid-19 pandemic has put organizational resilience at the centre of everthing Xiangxue Pharmaceutical does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Xiangxue Pharmaceutical is one of the most innovative firm in Biotechnology & Drugs sector.
Low bargaining power of suppliers
– Suppliers of Xiangxue Pharmaceutical in the Healthcare sector have low bargaining power. Xiangxue Pharmaceutical has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Xiangxue Pharmaceutical to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Xiangxue Pharmaceutical 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 Xiangxue Pharmaceutical is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Xiangxue Pharmaceutical emphasize – knowledge, initiative, and innovation.
Strong track record of project management in the Biotechnology & Drugs industry
– Xiangxue Pharmaceutical is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Xiangxue Pharmaceutical 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.
Sustainable margins compare to other players in Biotechnology & Drugs industry
– Xiangxue Pharmaceutical has clearly differentiated products in the market place. This has enabled Xiangxue Pharmaceutical to fetch slight price premium compare to the competitors in the Biotechnology & Drugs industry. The sustainable margins have also helped Xiangxue Pharmaceutical to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Xiangxue Pharmaceutical has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Biotechnology & Drugs industry. Secondly the value chain collaborators of Xiangxue Pharmaceutical have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses of Xiangxue Pharmaceutical | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Xiangxue Pharmaceutical are -
No frontier risks strategy
– From the 10K / annual statement of Xiangxue Pharmaceutical, it seems that company is thinking out the frontier risks that can impact Biotechnology & Drugs industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Ability to respond to the competition
– As the decision making is very deliberative at Xiangxue Pharmaceutical, in the dynamic environment of Biotechnology & Drugs industry it has struggled to respond to the nimble upstart competition. Xiangxue Pharmaceutical has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Xiangxue Pharmaceutical products
– To increase the profitability and margins on the products, Xiangxue Pharmaceutical needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Xiangxue Pharmaceutical is dominated by functional specialists. It is not different from other players in the Biotechnology & Drugs industry, but Xiangxue Pharmaceutical needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Xiangxue Pharmaceutical to focus more on services in the Biotechnology & Drugs industry rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Xiangxue Pharmaceutical 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 Biotechnology & Drugs industry using digital technology.
Compensation and incentives
– The revenue per employee of Xiangxue Pharmaceutical is just above the Biotechnology & Drugs 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.
Slow to strategic competitive environment developments
– As Xiangxue Pharmaceutical is one of the leading players in the Biotechnology & Drugs industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Biotechnology & Drugs industry in last five years.
Employees’ less understanding of Xiangxue Pharmaceutical strategy
– From the outside it seems that the employees of Xiangxue Pharmaceutical 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 Xiangxue Pharmaceutical ‘s star products
– The top 2 products and services of Xiangxue Pharmaceutical still accounts for major business revenue. This dependence on star products in Biotechnology & Drugs industry has resulted into insufficient focus on developing new products, even though Xiangxue Pharmaceutical has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Xiangxue Pharmaceutical 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.
Aligning sales with marketing
– From the outside it seems that Xiangxue Pharmaceutical needs to have more collaboration between its sales team and marketing team. Sales professionals in the Biotechnology & Drugs industry have deep experience in developing customer relationships. Marketing department at Xiangxue Pharmaceutical can leverage the sales team experience to cultivate customer relationships as Xiangxue Pharmaceutical is planning to shift buying processes online.
Xiangxue Pharmaceutical Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Xiangxue Pharmaceutical are -
Manufacturing automation
– Xiangxue Pharmaceutical can use the latest technology developments to improve its manufacturing and designing process in Biotechnology & Drugs 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.
Learning at scale
– Online learning technologies has now opened space for Xiangxue Pharmaceutical 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.
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 Xiangxue Pharmaceutical 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 Xiangxue Pharmaceutical 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 Biotechnology & Drugs industry.
Buying journey improvements
– Xiangxue Pharmaceutical can improve the customer journey of consumers in the Biotechnology & Drugs 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 Xiangxue Pharmaceutical to increase its market reach. Xiangxue Pharmaceutical 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Xiangxue Pharmaceutical can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Xiangxue Pharmaceutical in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Biotechnology & Drugs industry, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Xiangxue Pharmaceutical has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Biotechnology & Drugs sector. This continuous investment in analytics has enabled Xiangxue Pharmaceutical to build a competitive advantage using analytics. The analytics driven competitive advantage can help Xiangxue Pharmaceutical to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Use of Bitcoin and other crypto currencies for transactions in Biotechnology & Drugs industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Xiangxue Pharmaceutical in the Biotechnology & Drugs industry. Now Xiangxue Pharmaceutical can target international markets with far fewer capital restrictions requirements than the existing system.
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. Xiangxue Pharmaceutical can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Xiangxue Pharmaceutical can develop new processes and procedures in Biotechnology & Drugs 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.
Loyalty marketing
– Xiangxue Pharmaceutical 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.
Threats Xiangxue Pharmaceutical External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Xiangxue Pharmaceutical are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Xiangxue Pharmaceutical may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Biotechnology & Drugs sector.
Easy access to finance
– Easy access to finance in Biotechnology & Drugs industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Xiangxue Pharmaceutical can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Xiangxue Pharmaceutical 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 Xiangxue Pharmaceutical prominent markets.
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 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. Xiangxue Pharmaceutical needs to understand the core reasons impacting the Biotechnology & Drugs industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Xiangxue Pharmaceutical 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 Biotechnology & Drugs industry.
High dependence on third party suppliers
– Xiangxue Pharmaceutical 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.
Environmental challenges
– Xiangxue Pharmaceutical 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. Xiangxue Pharmaceutical can take advantage of this fund but it will also bring new competitors in the Biotechnology & Drugs 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 Xiangxue Pharmaceutical business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Xiangxue Pharmaceutical
– 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 Xiangxue Pharmaceutical.
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. Xiangxue Pharmaceutical 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Biotechnology & Drugs industry are lowering. It can presents Xiangxue Pharmaceutical with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Biotechnology & Drugs sector.
Shortening product life cycle
– it is one of the major threat that Xiangxue Pharmaceutical is facing in Biotechnology & Drugs sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Xiangxue Pharmaceutical Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Xiangxue Pharmaceutical 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 Xiangxue Pharmaceutical 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 Xiangxue Pharmaceutical 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 Xiangxue Pharmaceutical 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 Xiangxue Pharmaceutical needs to make to build a sustainable competitive advantage.