SWOT Analysis / TOWS Matrix for Sichuan Goldstone Equipment (China)
Based on various researches at Oak Spring University , Sichuan Goldstone Equipment is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, increasing energy prices, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, geopolitical disruptions,
increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Sichuan Goldstone Equipment
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Sichuan Goldstone Equipment can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sichuan Goldstone Equipment, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sichuan Goldstone Equipment 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 Sichuan Goldstone Equipment can be done for the following purposes –
1. Strategic planning of Sichuan Goldstone Equipment
2. Improving business portfolio management of Sichuan Goldstone Equipment
3. Assessing feasibility of the new initiative in China
4. Making a Fabricated Plastic & Rubber sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sichuan Goldstone Equipment
Strengths of Sichuan Goldstone Equipment | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sichuan Goldstone Equipment are -
High brand equity
– Sichuan Goldstone Equipment has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sichuan Goldstone Equipment to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Sichuan Goldstone Equipment has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Sichuan Goldstone Equipment staying ahead in the Fabricated Plastic & Rubber industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Sichuan Goldstone Equipment is one of the leading players in the Fabricated Plastic & Rubber 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.
Diverse revenue streams
– Sichuan Goldstone Equipment is present in almost all the verticals within the Fabricated Plastic & Rubber industry. This has provided Sichuan Goldstone Equipment 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.
Innovation driven organization
– Sichuan Goldstone Equipment is one of the most innovative firm in Fabricated Plastic & Rubber sector.
Training and development
– Sichuan Goldstone Equipment has one of the best training and development program in Basic Materials industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
High switching costs
– The high switching costs that Sichuan Goldstone Equipment 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.
Sustainable margins compare to other players in Fabricated Plastic & Rubber industry
– Sichuan Goldstone Equipment has clearly differentiated products in the market place. This has enabled Sichuan Goldstone Equipment to fetch slight price premium compare to the competitors in the Fabricated Plastic & Rubber industry. The sustainable margins have also helped Sichuan Goldstone Equipment to invest into research and development (R&D) and innovation.
Digital Transformation in Fabricated Plastic & Rubber industry
- digital transformation varies from industry to industry. For Sichuan Goldstone Equipment digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sichuan Goldstone Equipment 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
– Sichuan Goldstone Equipment has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sichuan Goldstone Equipment 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.
Ability to lead change in Fabricated Plastic & Rubber
– Sichuan Goldstone Equipment is one of the leading players in the Fabricated Plastic & Rubber industry in China. Over the years it has not only transformed the business landscape in the Fabricated Plastic & Rubber industry in China but also across the existing markets. The ability to lead change has enabled Sichuan Goldstone Equipment in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Sichuan Goldstone Equipment 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 Sichuan Goldstone Equipment is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Sichuan Goldstone Equipment emphasize – knowledge, initiative, and innovation.
Weaknesses of Sichuan Goldstone Equipment | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sichuan Goldstone Equipment are -
Employees’ less understanding of Sichuan Goldstone Equipment strategy
– From the outside it seems that the employees of Sichuan Goldstone Equipment 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.
Interest costs
– Compare to the competition, Sichuan Goldstone Equipment 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.
Compensation and incentives
– The revenue per employee of Sichuan Goldstone Equipment is just above the Fabricated Plastic & Rubber 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 dependence on Sichuan Goldstone Equipment ‘s star products
– The top 2 products and services of Sichuan Goldstone Equipment still accounts for major business revenue. This dependence on star products in Fabricated Plastic & Rubber industry has resulted into insufficient focus on developing new products, even though Sichuan Goldstone Equipment has relatively successful track record of launching new products.
High cash cycle compare to competitors
Sichuan Goldstone Equipment has a high cash cycle compare to other players in the Fabricated Plastic & Rubber 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 Sichuan Goldstone Equipment supply chain. Even after few cautionary changes, Sichuan Goldstone Equipment is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sichuan Goldstone Equipment vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Sichuan Goldstone Equipment has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Fabricated Plastic & Rubber industry over the last five years. Sichuan Goldstone Equipment 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.
Capital Spending Reduction
– Even during the low interest decade, Sichuan Goldstone Equipment 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 Fabricated Plastic & Rubber industry using digital technology.
Workers concerns about automation
– As automation is fast increasing in the Fabricated Plastic & Rubber industry, Sichuan Goldstone Equipment 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.
Increasing silos among functional specialists
– The organizational structure of Sichuan Goldstone Equipment is dominated by functional specialists. It is not different from other players in the Fabricated Plastic & Rubber industry, but Sichuan Goldstone Equipment needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sichuan Goldstone Equipment to focus more on services in the Fabricated Plastic & Rubber industry rather than just following the product oriented approach.
No frontier risks strategy
– From the 10K / annual statement of Sichuan Goldstone Equipment, it seems that company is thinking out the frontier risks that can impact Fabricated Plastic & Rubber 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.
Sichuan Goldstone Equipment Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Sichuan Goldstone Equipment are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sichuan Goldstone Equipment can use these opportunities to build new business models that can help the communities that Sichuan Goldstone Equipment operates in. Secondly it can use opportunities from government spending in Fabricated Plastic & Rubber sector.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Sichuan Goldstone Equipment can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Sichuan Goldstone Equipment in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Fabricated Plastic & Rubber industry, and it will provide faster access to the consumers.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Sichuan Goldstone Equipment can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Sichuan Goldstone Equipment 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.
Creating value in data economy
– The success of analytics program of Sichuan Goldstone Equipment has opened avenues for new revenue streams for the organization in Fabricated Plastic & Rubber industry. This can help Sichuan Goldstone Equipment to build a more holistic ecosystem for Sichuan Goldstone Equipment products in the Fabricated Plastic & Rubber industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Sichuan Goldstone Equipment 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.
Using analytics as competitive advantage
– Sichuan Goldstone Equipment has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Fabricated Plastic & Rubber sector. This continuous investment in analytics has enabled Sichuan Goldstone Equipment to build a competitive advantage using analytics. The analytics driven competitive advantage can help Sichuan Goldstone Equipment to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Sichuan Goldstone Equipment 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Sichuan Goldstone Equipment 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 Sichuan Goldstone Equipment to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Use of Bitcoin and other crypto currencies for transactions in Fabricated Plastic & Rubber industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Sichuan Goldstone Equipment in the Fabricated Plastic & Rubber industry. Now Sichuan Goldstone Equipment can target international markets with far fewer capital restrictions requirements than the existing system.
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 Sichuan Goldstone Equipment 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.
Building a culture of innovation
– managers at Sichuan Goldstone Equipment 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 Fabricated Plastic & Rubber industry.
Threats Sichuan Goldstone Equipment External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Sichuan Goldstone Equipment are -
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.
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.
Increasing wage structure of Sichuan Goldstone Equipment
– 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 Sichuan Goldstone Equipment.
Environmental challenges
– Sichuan Goldstone Equipment 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. Sichuan Goldstone Equipment can take advantage of this fund but it will also bring new competitors in the Fabricated Plastic & Rubber industry.
Technology acceleration in Forth Industrial Revolution
– Sichuan Goldstone Equipment has witnessed rapid integration of technology during Covid-19 in the Fabricated Plastic & Rubber industry. As one of the leading players in the industry, Sichuan Goldstone Equipment needs to keep up with the evolution of technology in the Fabricated Plastic & Rubber 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sichuan Goldstone Equipment in Fabricated Plastic & Rubber industry. The Fabricated Plastic & Rubber 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.
Stagnating economy with rate increase
– Sichuan Goldstone Equipment 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 Fabricated Plastic & Rubber 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 Sichuan Goldstone Equipment in the Fabricated Plastic & Rubber sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Sichuan Goldstone Equipment may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Fabricated Plastic & Rubber sector.
Shortening product life cycle
– it is one of the major threat that Sichuan Goldstone Equipment is facing in Fabricated Plastic & Rubber sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Fabricated Plastic & Rubber industry are lowering. It can presents Sichuan Goldstone Equipment with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Fabricated Plastic & Rubber sector.
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. Sichuan Goldstone Equipment 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 dependence on third party suppliers
– Sichuan Goldstone Equipment 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.
Weighted SWOT Analysis of Sichuan Goldstone Equipment Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Sichuan Goldstone Equipment 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 Sichuan Goldstone Equipment 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 Sichuan Goldstone Equipment 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 Sichuan Goldstone Equipment 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 Sichuan Goldstone Equipment needs to make to build a sustainable competitive advantage.