Luoyang Longhua Heat Trans Energy (300263) SWOT Analysis / TOWS Matrix / MBA Resources
Misc. Capital Goods
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Luoyang Longhua Heat Trans Energy (China)
Based on various researches at Oak Spring University , Luoyang Longhua Heat Trans Energy is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic ,
central banks are concerned over increasing inflation, geopolitical disruptions, etc
Introduction to SWOT Analysis of Luoyang Longhua Heat Trans Energy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Luoyang Longhua Heat Trans Energy can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Luoyang Longhua Heat Trans Energy, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Luoyang Longhua Heat Trans Energy 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 Luoyang Longhua Heat Trans Energy can be done for the following purposes –
1. Strategic planning of Luoyang Longhua Heat Trans Energy
2. Improving business portfolio management of Luoyang Longhua Heat Trans Energy
3. Assessing feasibility of the new initiative in China
4. Making a Misc. Capital Goods sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Luoyang Longhua Heat Trans Energy
Strengths of Luoyang Longhua Heat Trans Energy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Luoyang Longhua Heat Trans Energy are -
Innovation driven organization
– Luoyang Longhua Heat Trans Energy is one of the most innovative firm in Misc. Capital Goods sector.
Organizational Resilience of Luoyang Longhua Heat Trans Energy
– The covid-19 pandemic has put organizational resilience at the centre of everthing Luoyang Longhua Heat Trans Energy does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Misc. Capital Goods industry
- digital transformation varies from industry to industry. For Luoyang Longhua Heat Trans Energy digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Luoyang Longhua Heat Trans Energy 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.
Successful track record of launching new products
– Luoyang Longhua Heat Trans Energy has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Luoyang Longhua Heat Trans Energy 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 Luoyang Longhua Heat Trans Energy 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.
Ability to recruit top talent
– Luoyang Longhua Heat Trans Energy is one of the leading players in the Misc. Capital Goods 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.
Strong track record of project management in the Misc. Capital Goods industry
– Luoyang Longhua Heat Trans Energy is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Luoyang Longhua Heat Trans Energy 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 Misc. Capital Goods 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.
High switching costs
– The high switching costs that Luoyang Longhua Heat Trans Energy 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.
Training and development
– Luoyang Longhua Heat Trans Energy has one of the best training and development program in Capital Goods 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.
Low bargaining power of suppliers
– Suppliers of Luoyang Longhua Heat Trans Energy in the Capital Goods sector have low bargaining power. Luoyang Longhua Heat Trans Energy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Luoyang Longhua Heat Trans Energy to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Luoyang Longhua Heat Trans Energy 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 Luoyang Longhua Heat Trans Energy is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Luoyang Longhua Heat Trans Energy emphasize – knowledge, initiative, and innovation.
Weaknesses of Luoyang Longhua Heat Trans Energy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Luoyang Longhua Heat Trans Energy are -
Skills based hiring in Misc. Capital Goods industry
– The stress on hiring functional specialists at Luoyang Longhua Heat Trans Energy 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.
Interest costs
– Compare to the competition, Luoyang Longhua Heat Trans Energy 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.
Employees’ less understanding of Luoyang Longhua Heat Trans Energy strategy
– From the outside it seems that the employees of Luoyang Longhua Heat Trans Energy 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.
Increasing silos among functional specialists
– The organizational structure of Luoyang Longhua Heat Trans Energy is dominated by functional specialists. It is not different from other players in the Misc. Capital Goods industry, but Luoyang Longhua Heat Trans Energy needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Luoyang Longhua Heat Trans Energy to focus more on services in the Misc. Capital Goods industry rather than just following the product oriented approach.
Need for greater diversity
– Luoyang Longhua Heat Trans Energy 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.
Compensation and incentives
– The revenue per employee of Luoyang Longhua Heat Trans Energy is just above the Misc. Capital Goods 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 harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Luoyang Longhua Heat Trans Energy is slow explore the new channels of communication. These new channels of communication can help Luoyang Longhua Heat Trans Energy to provide better information regarding Misc. Capital Goods products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As Luoyang Longhua Heat Trans Energy is one of the leading players in the Misc. Capital Goods industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Misc. Capital Goods industry in last five years.
High cash cycle compare to competitors
Luoyang Longhua Heat Trans Energy has a high cash cycle compare to other players in the Misc. Capital Goods industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Aligning sales with marketing
– From the outside it seems that Luoyang Longhua Heat Trans Energy needs to have more collaboration between its sales team and marketing team. Sales professionals in the Misc. Capital Goods industry have deep experience in developing customer relationships. Marketing department at Luoyang Longhua Heat Trans Energy can leverage the sales team experience to cultivate customer relationships as Luoyang Longhua Heat Trans Energy is planning to shift buying processes online.
Products dominated business model
– Even though Luoyang Longhua Heat Trans Energy has some of the most successful models in the Misc. Capital Goods industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Luoyang Longhua Heat Trans Energy should strive to include more intangible value offerings along with its core products and services.
Luoyang Longhua Heat Trans Energy Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Luoyang Longhua Heat Trans Energy are -
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Misc. Capital Goods industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Luoyang Longhua Heat Trans Energy 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. Luoyang Longhua Heat Trans Energy 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.
Building a culture of innovation
– managers at Luoyang Longhua Heat Trans Energy 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 Misc. Capital Goods industry.
Learning at scale
– Online learning technologies has now opened space for Luoyang Longhua Heat Trans Energy 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Luoyang Longhua Heat Trans Energy is facing challenges because of the dominance of functional experts in the organization. Luoyang Longhua Heat Trans Energy can utilize new technology in the field of Misc. Capital Goods industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Better consumer reach
– The expansion of the 5G network will help Luoyang Longhua Heat Trans Energy to increase its market reach. Luoyang Longhua Heat Trans Energy 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.
Use of Bitcoin and other crypto currencies for transactions in Misc. Capital Goods industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Luoyang Longhua Heat Trans Energy in the Misc. Capital Goods industry. Now Luoyang Longhua Heat Trans Energy can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Luoyang Longhua Heat Trans Energy 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
– Luoyang Longhua Heat Trans Energy can develop new processes and procedures in Misc. Capital Goods 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Luoyang Longhua Heat Trans Energy in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Misc. Capital Goods industry, and it will provide faster access to the consumers.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Luoyang Longhua Heat Trans Energy 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 Luoyang Longhua Heat Trans Energy to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Luoyang Longhua Heat Trans Energy can use the latest technology developments to improve its manufacturing and designing process in Misc. Capital Goods 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.
Loyalty marketing
– Luoyang Longhua Heat Trans Energy 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.
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. Luoyang Longhua Heat Trans Energy can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Luoyang Longhua Heat Trans Energy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Luoyang Longhua Heat Trans Energy are -
Stagnating economy with rate increase
– Luoyang Longhua Heat Trans Energy 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 Misc. Capital Goods industry.
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 Luoyang Longhua Heat Trans Energy.
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 Luoyang Longhua Heat Trans Energy in the Misc. Capital Goods sector and impact the bottomline of the organization.
Environmental challenges
– Luoyang Longhua Heat Trans Energy 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. Luoyang Longhua Heat Trans Energy can take advantage of this fund but it will also bring new competitors in the Misc. Capital Goods industry.
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, Luoyang Longhua Heat Trans Energy 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. Capital Goods sector.
Consumer confidence and its impact on Luoyang Longhua Heat Trans Energy 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. Capital Goods industry and other sectors.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Luoyang Longhua Heat Trans Energy 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 Luoyang Longhua Heat Trans Energy prominent markets.
High dependence on third party suppliers
– Luoyang Longhua Heat Trans Energy 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.
Easy access to finance
– Easy access to finance in Misc. Capital Goods industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Luoyang Longhua Heat Trans Energy can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Luoyang Longhua Heat Trans Energy in Misc. Capital Goods industry. The Misc. Capital Goods 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 Luoyang Longhua Heat Trans Energy business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Luoyang Longhua Heat Trans Energy is facing in Misc. Capital Goods sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Luoyang Longhua Heat Trans Energy Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Luoyang Longhua Heat Trans Energy 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 Luoyang Longhua Heat Trans Energy 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 Luoyang Longhua Heat Trans Energy 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 Luoyang Longhua Heat Trans Energy 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 Luoyang Longhua Heat Trans Energy needs to make to build a sustainable competitive advantage.