Guangtai Equip A (2111) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Guangtai Equip A (China)

Based on various researches at Oak Spring University , Guangtai Equip A is operating in a macro-environment that has been destablized by – banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, increasing energy prices, increasing commodity prices, increasing transportation and logistics costs, technology disruption, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, etc

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Introduction to SWOT Analysis of Guangtai Equip A

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Guangtai Equip A can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Guangtai Equip A, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Guangtai Equip A 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Guangtai Equip A can be done for the following purposes –
1. Strategic planning of Guangtai Equip A
2. Improving business portfolio management of Guangtai Equip A
3. Assessing feasibility of the new initiative in China
4. Making a Recreational Products sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Guangtai Equip A

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Strengths of Guangtai Equip A | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Guangtai Equip A are -

Learning organization

- Guangtai Equip A 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 Guangtai Equip A is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Guangtai Equip A emphasize – knowledge, initiative, and innovation.

Analytics focus

– Guangtai Equip A 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 Recreational Products 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.

Organizational Resilience of Guangtai Equip A

– The covid-19 pandemic has put organizational resilience at the centre of everthing Guangtai Equip A does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Strong track record of project management in the Recreational Products industry

– Guangtai Equip A is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Sustainable margins compare to other players in Recreational Products industry

– Guangtai Equip A has clearly differentiated products in the market place. This has enabled Guangtai Equip A to fetch slight price premium compare to the competitors in the Recreational Products industry. The sustainable margins have also helped Guangtai Equip A to invest into research and development (R&D) and innovation.

Diverse revenue streams

– Guangtai Equip A is present in almost all the verticals within the Recreational Products industry. This has provided Guangtai Equip A 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.

Superior customer experience

– The customer experience strategy of Guangtai Equip A in Recreational Products industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Ability to recruit top talent

– Guangtai Equip A is one of the leading players in the Recreational Products 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.

Highly skilled collaborators

– Guangtai Equip A has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Recreational Products industry. Secondly the value chain collaborators of Guangtai Equip A have helped the firm to develop new products and bring them quickly to the marketplace.

Effective Research and Development (R&D)

– Guangtai Equip A has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Guangtai Equip A staying ahead in the Recreational Products industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

High switching costs

– The high switching costs that Guangtai Equip A 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 Guangtai Equip A in the Consumer Cyclical sector have low bargaining power. Guangtai Equip A has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Guangtai Equip A to manage not only supply disruptions but also source products at highly competitive prices.

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Weaknesses of Guangtai Equip A | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Guangtai Equip A are -

High bargaining power of channel partners in Recreational Products industry

– because of the regulatory requirements in China, Guangtai Equip A is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Recreational Products industry.

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 Guangtai Equip A supply chain. Even after few cautionary changes, Guangtai Equip A is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Guangtai Equip A vulnerable to further global disruptions in South East Asia.

Compensation and incentives

– The revenue per employee of Guangtai Equip A is just above the Recreational 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.

High cash cycle compare to competitors

Guangtai Equip A has a high cash cycle compare to other players in the Recreational Products industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Need for greater diversity

– Guangtai Equip A 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.

Increasing silos among functional specialists

– The organizational structure of Guangtai Equip A is dominated by functional specialists. It is not different from other players in the Recreational Products industry, but Guangtai Equip A needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Guangtai Equip A to focus more on services in the Recreational Products industry rather than just following the product oriented approach.

Capital Spending Reduction

– Even during the low interest decade, Guangtai Equip A 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 Recreational Products industry using digital technology.

Employees’ less understanding of Guangtai Equip A strategy

– From the outside it seems that the employees of Guangtai Equip A 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.

Products dominated business model

– Even though Guangtai Equip A has some of the most successful models in the Recreational Products industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Guangtai Equip A should strive to include more intangible value offerings along with its core products and services.

Skills based hiring in Recreational Products industry

– The stress on hiring functional specialists at Guangtai Equip A 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.

Ability to respond to the competition

– As the decision making is very deliberative at Guangtai Equip A, in the dynamic environment of Recreational Products industry it has struggled to respond to the nimble upstart competition. Guangtai Equip A has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

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Guangtai Equip A Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Guangtai Equip A are -

Better consumer reach

– The expansion of the 5G network will help Guangtai Equip A to increase its market reach. Guangtai Equip A 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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Recreational Products industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Guangtai Equip A 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. Guangtai Equip A 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Guangtai Equip A can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Guangtai Equip A can use these opportunities to build new business models that can help the communities that Guangtai Equip A operates in. Secondly it can use opportunities from government spending in Recreational Products sector.

Creating value in data economy

– The success of analytics program of Guangtai Equip A has opened avenues for new revenue streams for the organization in Recreational Products industry. This can help Guangtai Equip A to build a more holistic ecosystem for Guangtai Equip A products in the Recreational Products industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Guangtai Equip A in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Recreational Products industry, and it will provide faster access to the consumers.

Using analytics as competitive advantage

– Guangtai Equip A has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Recreational Products sector. This continuous investment in analytics has enabled Guangtai Equip A to build a competitive advantage using analytics. The analytics driven competitive advantage can help Guangtai Equip A to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Manufacturing automation

– Guangtai Equip A can use the latest technology developments to improve its manufacturing and designing process in Recreational Products sector. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.

Learning at scale

– Online learning technologies has now opened space for Guangtai Equip A 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

– Guangtai Equip A can improve the customer journey of consumers in the Recreational 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.

Developing new processes and practices

– Guangtai Equip A can develop new processes and procedures in Recreational 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Guangtai Equip A is facing challenges because of the dominance of functional experts in the organization. Guangtai Equip A can utilize new technology in the field of Recreational Products industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Guangtai Equip A 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 Guangtai Equip A to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

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Threats Guangtai Equip A External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Guangtai Equip A are -

Consumer confidence and its impact on Guangtai Equip A 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 Recreational Products industry and other sectors.

High dependence on third party suppliers

– Guangtai Equip A 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.

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. Guangtai Equip A 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.

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. Guangtai Equip A needs to understand the core reasons impacting the Recreational Products industry. This will help it in building a better workplace.

Environmental challenges

– Guangtai Equip A 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. Guangtai Equip A can take advantage of this fund but it will also bring new competitors in the Recreational Products industry.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Recreational Products industry are lowering. It can presents Guangtai Equip A with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Recreational Products sector.

Increasing wage structure of Guangtai Equip A

– 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 Guangtai Equip A.

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 Guangtai Equip A in the Recreational Products sector and impact the bottomline of the organization.

Easy access to finance

– Easy access to finance in Recreational Products industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Guangtai Equip A can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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 Guangtai Equip A.

Stagnating economy with rate increase

– Guangtai Equip A 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 Recreational Products industry.

Regulatory challenges

– Guangtai Equip A 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 Recreational Products industry regulations.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Guangtai Equip A may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Recreational Products sector.

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Weighted SWOT Analysis of Guangtai Equip A Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Guangtai Equip A 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 Guangtai Equip A 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 Guangtai Equip A 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 Guangtai Equip A 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 Guangtai Equip A needs to make to build a sustainable competitive advantage.

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