SWOT Analysis / TOWS Matrix for Xiamen Changelight (China)
Based on various researches at Oak Spring University , Xiamen Changelight is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies,
there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Xiamen Changelight
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Xiamen Changelight can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Xiamen Changelight, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Xiamen Changelight 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 Xiamen Changelight can be done for the following purposes –
1. Strategic planning of Xiamen Changelight
2. Improving business portfolio management of Xiamen Changelight
3. Assessing feasibility of the new initiative in China
4. Making a Semiconductors sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Xiamen Changelight
Strengths of Xiamen Changelight | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Xiamen Changelight are -
Highly skilled collaborators
– Xiamen Changelight has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Semiconductors industry. Secondly the value chain collaborators of Xiamen Changelight have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Xiamen Changelight 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.
Low bargaining power of suppliers
– Suppliers of Xiamen Changelight in the Technology sector have low bargaining power. Xiamen Changelight has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Xiamen Changelight to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Xiamen Changelight has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Xiamen Changelight staying ahead in the Semiconductors industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Xiamen Changelight has one of the best training and development program in Technology 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.
Learning organization
- Xiamen Changelight 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 Xiamen Changelight is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Xiamen Changelight emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Xiamen Changelight is one of the leading players in the Semiconductors 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
– Xiamen Changelight has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Xiamen Changelight to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Semiconductors industry
- digital transformation varies from industry to industry. For Xiamen Changelight digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Xiamen Changelight 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.
Diverse revenue streams
– Xiamen Changelight is present in almost all the verticals within the Semiconductors industry. This has provided Xiamen Changelight 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.
Sustainable margins compare to other players in Semiconductors industry
– Xiamen Changelight has clearly differentiated products in the market place. This has enabled Xiamen Changelight to fetch slight price premium compare to the competitors in the Semiconductors industry. The sustainable margins have also helped Xiamen Changelight to invest into research and development (R&D) and innovation.
Ability to lead change in Semiconductors
– Xiamen Changelight is one of the leading players in the Semiconductors industry in China. Over the years it has not only transformed the business landscape in the Semiconductors industry in China but also across the existing markets. The ability to lead change has enabled Xiamen Changelight in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses of Xiamen Changelight | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Xiamen Changelight are -
High dependence on Xiamen Changelight ‘s star products
– The top 2 products and services of Xiamen Changelight still accounts for major business revenue. This dependence on star products in Semiconductors industry has resulted into insufficient focus on developing new products, even though Xiamen Changelight has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the Semiconductors industry, Xiamen Changelight 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.
Capital Spending Reduction
– Even during the low interest decade, Xiamen Changelight 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 Semiconductors industry using digital technology.
Compensation and incentives
– The revenue per employee of Xiamen Changelight is just above the Semiconductors 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.
Increasing silos among functional specialists
– The organizational structure of Xiamen Changelight is dominated by functional specialists. It is not different from other players in the Semiconductors industry, but Xiamen Changelight needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Xiamen Changelight to focus more on services in the Semiconductors industry rather than just following the product oriented approach.
Need for greater diversity
– Xiamen Changelight 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.
High cash cycle compare to competitors
Xiamen Changelight has a high cash cycle compare to other players in the Semiconductors industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Lack of clear differentiation of Xiamen Changelight products
– To increase the profitability and margins on the products, Xiamen Changelight needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Xiamen Changelight is slow explore the new channels of communication. These new channels of communication can help Xiamen Changelight to provide better information regarding Semiconductors products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, Xiamen Changelight has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Semiconductors industry over the last five years. Xiamen Changelight 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.
Interest costs
– Compare to the competition, Xiamen Changelight 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.
Xiamen Changelight Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Xiamen Changelight are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Xiamen Changelight 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 Xiamen Changelight to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Xiamen Changelight has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Semiconductors sector. This continuous investment in analytics has enabled Xiamen Changelight to build a competitive advantage using analytics. The analytics driven competitive advantage can help Xiamen Changelight to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Xiamen Changelight 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 Xiamen Changelight to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Xiamen Changelight can use the latest technology developments to improve its manufacturing and designing process in Semiconductors 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Xiamen Changelight can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Semiconductors industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Xiamen Changelight 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. Xiamen Changelight 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Xiamen Changelight is facing challenges because of the dominance of functional experts in the organization. Xiamen Changelight can utilize new technology in the field of Semiconductors industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Use of Bitcoin and other crypto currencies for transactions in Semiconductors industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Xiamen Changelight in the Semiconductors industry. Now Xiamen Changelight can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Xiamen Changelight 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.
Buying journey improvements
– Xiamen Changelight can improve the customer journey of consumers in the Semiconductors 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Xiamen Changelight in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Semiconductors industry, and it will provide faster access to the consumers.
Learning at scale
– Online learning technologies has now opened space for Xiamen Changelight 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.
Loyalty marketing
– Xiamen Changelight 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 Xiamen Changelight External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Xiamen Changelight are -
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. Xiamen Changelight 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.
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 Xiamen Changelight business can come under increasing regulations regarding data privacy, data security, etc.
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 dependence on third party suppliers
– Xiamen Changelight 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.
Shortening product life cycle
– it is one of the major threat that Xiamen Changelight is facing in Semiconductors sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Xiamen Changelight in the Semiconductors sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Xiamen Changelight has witnessed rapid integration of technology during Covid-19 in the Semiconductors industry. As one of the leading players in the industry, Xiamen Changelight needs to keep up with the evolution of technology in the Semiconductors 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.
Stagnating economy with rate increase
– Xiamen Changelight 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 Semiconductors industry.
Increasing wage structure of Xiamen Changelight
– 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 Xiamen Changelight.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Semiconductors industry are lowering. It can presents Xiamen Changelight with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Semiconductors sector.
Consumer confidence and its impact on Xiamen Changelight 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 Semiconductors industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Xiamen Changelight may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Semiconductors sector.
Weighted SWOT Analysis of Xiamen Changelight Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Xiamen Changelight 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 Xiamen Changelight 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 Xiamen Changelight 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 Xiamen Changelight 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 Xiamen Changelight needs to make to build a sustainable competitive advantage.