Start Group (600734) SWOT Analysis / TOWS Matrix / MBA Resources
Misc. Fabricated Products
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Start Group (China)
Based on various researches at Oak Spring University , Start Group is operating in a macro-environment that has been destablized by – geopolitical disruptions, there is backlash against globalization, there is increasing trade war between United States & China, technology disruption, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic ,
central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Start Group can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Start Group, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Start Group 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 Start Group can be done for the following purposes –
1. Strategic planning of Start Group
2. Improving business portfolio management of Start Group
3. Assessing feasibility of the new initiative in China
4. Making a Misc. Fabricated Products sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Start Group
Strengths of Start Group | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Start Group are -
Superior customer experience
– The customer experience strategy of Start Group in Misc. Fabricated Products industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Start Group is one of the most innovative firm in Misc. Fabricated Products sector.
Training and development
– Start Group has one of the best training and development program in Basic Materials 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.
Highly skilled collaborators
– Start Group has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Misc. Fabricated Products industry. Secondly the value chain collaborators of Start Group have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Start Group has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Start Group 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.
Low bargaining power of suppliers
– Suppliers of Start Group in the Basic Materials sector have low bargaining power. Start Group has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Start Group to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy of Start Group comprises – understanding the underlying the factors in the Misc. Fabricated Products 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.
Ability to lead change in Misc. Fabricated Products
– Start Group is one of the leading players in the Misc. Fabricated Products industry in China. Over the years it has not only transformed the business landscape in the Misc. Fabricated Products industry in China but also across the existing markets. The ability to lead change has enabled Start Group in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Start Group
– The covid-19 pandemic has put organizational resilience at the centre of everthing Start Group does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Misc. Fabricated Products industry
– Start Group has clearly differentiated products in the market place. This has enabled Start Group to fetch slight price premium compare to the competitors in the Misc. Fabricated Products industry. The sustainable margins have also helped Start Group to invest into research and development (R&D) and innovation.
Strong track record of project management in the Misc. Fabricated Products industry
– Start Group is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Start Group 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 Start Group is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Start Group emphasize – knowledge, initiative, and innovation.
Weaknesses of Start Group | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Start Group are -
High dependence on Start Group ‘s star products
– The top 2 products and services of Start Group still accounts for major business revenue. This dependence on star products in Misc. Fabricated Products industry has resulted into insufficient focus on developing new products, even though Start Group has relatively successful track record of launching new products.
No frontier risks strategy
– From the 10K / annual statement of Start Group, it seems that company is thinking out the frontier risks that can impact Misc. Fabricated Products 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.
Interest costs
– Compare to the competition, Start Group 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 Start Group needs to have more collaboration between its sales team and marketing team. Sales professionals in the Misc. Fabricated Products industry have deep experience in developing customer relationships. Marketing department at Start Group can leverage the sales team experience to cultivate customer relationships as Start Group is planning to shift buying processes online.
Lack of clear differentiation of Start Group products
– To increase the profitability and margins on the products, Start Group needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Start Group is dominated by functional specialists. It is not different from other players in the Misc. Fabricated Products industry, but Start Group needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Start Group to focus more on services in the Misc. Fabricated Products industry rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee of Start Group is just above the Misc. Fabricated Products 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.
Products dominated business model
– Even though Start Group has some of the most successful models in the Misc. Fabricated Products industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Start Group should strive to include more intangible value offerings along with its core products and services.
Skills based hiring in Misc. Fabricated Products industry
– The stress on hiring functional specialists at Start Group 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Start Group is slow explore the new channels of communication. These new channels of communication can help Start Group to provide better information regarding Misc. Fabricated Products products and services. It can also build an online community to further reach out to potential customers.
Employees’ less understanding of Start Group strategy
– From the outside it seems that the employees of Start Group 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.
Start Group Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Start Group are -
Learning at scale
– Online learning technologies has now opened space for Start Group 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.
Buying journey improvements
– Start Group can improve the customer journey of consumers in the Misc. Fabricated Products 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.
Creating value in data economy
– The success of analytics program of Start Group has opened avenues for new revenue streams for the organization in Misc. Fabricated Products industry. This can help Start Group to build a more holistic ecosystem for Start Group products in the Misc. Fabricated Products industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Start Group 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 Start Group 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, Start Group can use these opportunities to build new business models that can help the communities that Start Group operates in. Secondly it can use opportunities from government spending in Misc. Fabricated Products sector.
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. Start Group can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Start Group 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.
Leveraging digital technologies
– Start Group 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.
Developing new processes and practices
– Start Group can develop new processes and procedures in Misc. Fabricated Products 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Misc. Fabricated Products industry, but it has also influenced the consumer preferences. Start Group can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Misc. Fabricated Products industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Start Group 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. Start Group 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.
Use of Bitcoin and other crypto currencies for transactions in Misc. Fabricated Products industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Start Group in the Misc. Fabricated Products industry. Now Start Group can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Start Group has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Misc. Fabricated Products sector. This continuous investment in analytics has enabled Start Group to build a competitive advantage using analytics. The analytics driven competitive advantage can help Start Group to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Start Group External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Start Group are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Misc. Fabricated Products industry are lowering. It can presents Start Group with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Misc. Fabricated Products sector.
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 Start Group in the Misc. Fabricated Products sector and impact the bottomline of the organization.
Regulatory challenges
– Start Group 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 Misc. Fabricated Products industry regulations.
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. Start Group 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.
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.
High dependence on third party suppliers
– Start Group 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
– Start Group has witnessed rapid integration of technology during Covid-19 in the Misc. Fabricated Products industry. As one of the leading players in the industry, Start Group needs to keep up with the evolution of technology in the Misc. Fabricated Products 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Start Group may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Misc. Fabricated Products sector.
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 Start Group business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Start Group 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 Misc. Fabricated Products industry and other sectors.
Environmental challenges
– Start Group 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. Start Group can take advantage of this fund but it will also bring new competitors in the Misc. Fabricated Products industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Start Group 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 Start Group 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. Start Group needs to understand the core reasons impacting the Misc. Fabricated Products industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Start Group Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Start Group 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 Start Group 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 Start Group 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 Start Group 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 Start Group needs to make to build a sustainable competitive advantage.
