SWOT Analysis / TOWS Matrix for Wuhan Sanzhen (China)
Based on various researches at Oak Spring University , Wuhan Sanzhen is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, there is backlash against globalization, supply chains are disrupted by pandemic , technology disruption, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies,
challanges to central banks by blockchain based private currencies, increasing energy prices, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Wuhan Sanzhen can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Wuhan Sanzhen, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Wuhan Sanzhen 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 Wuhan Sanzhen can be done for the following purposes –
1. Strategic planning of Wuhan Sanzhen
2. Improving business portfolio management of Wuhan Sanzhen
3. Assessing feasibility of the new initiative in China
4. Making a Waste Management Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Wuhan Sanzhen
Strengths of Wuhan Sanzhen | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Wuhan Sanzhen are -
Low bargaining power of suppliers
– Suppliers of Wuhan Sanzhen in the Services sector have low bargaining power. Wuhan Sanzhen has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Wuhan Sanzhen to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Wuhan Sanzhen has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Wuhan Sanzhen staying ahead in the Waste Management Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Wuhan Sanzhen has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Wuhan Sanzhen to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Wuhan Sanzhen has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Wuhan Sanzhen 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.
Strong track record of project management in the Waste Management Services industry
– Wuhan Sanzhen is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Wuhan Sanzhen has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Waste Management Services industry. Secondly the value chain collaborators of Wuhan Sanzhen have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Waste Management Services industry
– Wuhan Sanzhen has clearly differentiated products in the market place. This has enabled Wuhan Sanzhen to fetch slight price premium compare to the competitors in the Waste Management Services industry. The sustainable margins have also helped Wuhan Sanzhen to invest into research and development (R&D) and innovation.
Ability to lead change in Waste Management Services
– Wuhan Sanzhen is one of the leading players in the Waste Management Services industry in China. Over the years it has not only transformed the business landscape in the Waste Management Services industry in China but also across the existing markets. The ability to lead change has enabled Wuhan Sanzhen in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Wuhan Sanzhen 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 Waste Management Services 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.
Digital Transformation in Waste Management Services industry
- digital transformation varies from industry to industry. For Wuhan Sanzhen digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Wuhan Sanzhen 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.
Cross disciplinary teams
– Horizontal connected teams at the Wuhan Sanzhen 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.
Innovation driven organization
– Wuhan Sanzhen is one of the most innovative firm in Waste Management Services sector.
Weaknesses of Wuhan Sanzhen | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Wuhan Sanzhen are -
Aligning sales with marketing
– From the outside it seems that Wuhan Sanzhen needs to have more collaboration between its sales team and marketing team. Sales professionals in the Waste Management Services industry have deep experience in developing customer relationships. Marketing department at Wuhan Sanzhen can leverage the sales team experience to cultivate customer relationships as Wuhan Sanzhen is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of China, Wuhan Sanzhen needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– From the 10K / annual statement of Wuhan Sanzhen, it seems that company is thinking out the frontier risks that can impact Waste Management Services 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.
High cash cycle compare to competitors
Wuhan Sanzhen has a high cash cycle compare to other players in the Waste Management Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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 Wuhan Sanzhen supply chain. Even after few cautionary changes, Wuhan Sanzhen is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Wuhan Sanzhen vulnerable to further global disruptions in South East Asia.
Skills based hiring in Waste Management Services industry
– The stress on hiring functional specialists at Wuhan Sanzhen 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.
Workers concerns about automation
– As automation is fast increasing in the Waste Management Services industry, Wuhan Sanzhen 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.
Need for greater diversity
– Wuhan Sanzhen 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.
Ability to respond to the competition
– As the decision making is very deliberative at Wuhan Sanzhen, in the dynamic environment of Waste Management Services industry it has struggled to respond to the nimble upstart competition. Wuhan Sanzhen has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee of Wuhan Sanzhen is just above the Waste Management 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.
Capital Spending Reduction
– Even during the low interest decade, Wuhan Sanzhen 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 Waste Management Services industry using digital technology.
Wuhan Sanzhen Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Wuhan Sanzhen are -
Better consumer reach
– The expansion of the 5G network will help Wuhan Sanzhen to increase its market reach. Wuhan Sanzhen 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.
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 Wuhan Sanzhen 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Wuhan Sanzhen can use these opportunities to build new business models that can help the communities that Wuhan Sanzhen operates in. Secondly it can use opportunities from government spending in Waste Management Services sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Wuhan Sanzhen 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 Wuhan Sanzhen to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Wuhan Sanzhen 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.
Buying journey improvements
– Wuhan Sanzhen can improve the customer journey of consumers in the Waste Management 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.
Learning at scale
– Online learning technologies has now opened space for Wuhan Sanzhen 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.
Building a culture of innovation
– managers at Wuhan Sanzhen 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 Waste Management Services industry.
Low interest rates
– Even though inflation is raising its head in most developed economies, Wuhan Sanzhen 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Wuhan Sanzhen 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 Wuhan Sanzhen to hire the very best people irrespective of their geographical location.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Waste Management Services industry, but it has also influenced the consumer preferences. Wuhan Sanzhen can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Use of Bitcoin and other crypto currencies for transactions in Waste Management Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Wuhan Sanzhen in the Waste Management Services industry. Now Wuhan Sanzhen 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. Wuhan Sanzhen can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Wuhan Sanzhen External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Wuhan Sanzhen are -
High dependence on third party suppliers
– Wuhan Sanzhen 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 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Wuhan Sanzhen may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Waste Management Services sector.
Stagnating economy with rate increase
– Wuhan Sanzhen 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 Waste Management Services industry.
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 Wuhan Sanzhen in the Waste Management Services sector and impact the bottomline of the organization.
Regulatory challenges
– Wuhan Sanzhen 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 Waste Management Services industry regulations.
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 Wuhan Sanzhen.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Wuhan Sanzhen in Waste Management Services industry. The Waste Management Services 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.
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 Wuhan Sanzhen business can come under increasing regulations regarding data privacy, data security, 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.
Environmental challenges
– Wuhan Sanzhen 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. Wuhan Sanzhen can take advantage of this fund but it will also bring new competitors in the Waste Management Services industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Wuhan Sanzhen 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 Wuhan Sanzhen 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. Wuhan Sanzhen needs to understand the core reasons impacting the Waste Management Services industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Wuhan Sanzhen Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Wuhan Sanzhen 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 Wuhan Sanzhen 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 Wuhan Sanzhen 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 Wuhan Sanzhen 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 Wuhan Sanzhen needs to make to build a sustainable competitive advantage.