SWOT Analysis / TOWS Matrix for Jiangsu Xinquan Automotive (China)
Based on various researches at Oak Spring University , Jiangsu Xinquan Automotive is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, technology disruption, there is backlash against globalization, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models,
wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Jiangsu Xinquan Automotive
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Jiangsu Xinquan Automotive can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Jiangsu Xinquan Automotive, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Jiangsu Xinquan Automotive 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 Jiangsu Xinquan Automotive can be done for the following purposes –
1. Strategic planning of Jiangsu Xinquan Automotive
2. Improving business portfolio management of Jiangsu Xinquan Automotive
3. Assessing feasibility of the new initiative in China
4. Making a Auto & Truck Parts sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Jiangsu Xinquan Automotive
Strengths of Jiangsu Xinquan Automotive | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Jiangsu Xinquan Automotive are -
High brand equity
– Jiangsu Xinquan Automotive has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Jiangsu Xinquan Automotive to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy of Jiangsu Xinquan Automotive comprises – understanding the underlying the factors in the Auto & Truck Parts industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Digital Transformation in Auto & Truck Parts industry
- digital transformation varies from industry to industry. For Jiangsu Xinquan Automotive digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Jiangsu Xinquan Automotive 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.
Superior customer experience
– The customer experience strategy of Jiangsu Xinquan Automotive in Auto & Truck Parts industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Jiangsu Xinquan Automotive 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.
Learning organization
- Jiangsu Xinquan Automotive 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 Jiangsu Xinquan Automotive is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Jiangsu Xinquan Automotive emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Jiangsu Xinquan Automotive is present in almost all the verticals within the Auto & Truck Parts industry. This has provided Jiangsu Xinquan Automotive 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.
Strong track record of project management in the Auto & Truck Parts industry
– Jiangsu Xinquan Automotive 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 Auto & Truck Parts industry
– Jiangsu Xinquan Automotive has clearly differentiated products in the market place. This has enabled Jiangsu Xinquan Automotive to fetch slight price premium compare to the competitors in the Auto & Truck Parts industry. The sustainable margins have also helped Jiangsu Xinquan Automotive to invest into research and development (R&D) and innovation.
Ability to lead change in Auto & Truck Parts
– Jiangsu Xinquan Automotive is one of the leading players in the Auto & Truck Parts industry in China. Over the years it has not only transformed the business landscape in the Auto & Truck Parts industry in China but also across the existing markets. The ability to lead change has enabled Jiangsu Xinquan Automotive in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Jiangsu Xinquan Automotive is one of the most innovative firm in Auto & Truck Parts sector.
Ability to recruit top talent
– Jiangsu Xinquan Automotive is one of the leading players in the Auto & Truck Parts 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.
Weaknesses of Jiangsu Xinquan Automotive | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Jiangsu Xinquan Automotive are -
Low market penetration in new markets
– Outside its home market of China, Jiangsu Xinquan Automotive needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Jiangsu Xinquan Automotive products
– To increase the profitability and margins on the products, Jiangsu Xinquan Automotive needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– From the outside it seems that Jiangsu Xinquan Automotive needs to have more collaboration between its sales team and marketing team. Sales professionals in the Auto & Truck Parts industry have deep experience in developing customer relationships. Marketing department at Jiangsu Xinquan Automotive can leverage the sales team experience to cultivate customer relationships as Jiangsu Xinquan Automotive is planning to shift buying processes online.
High dependence on Jiangsu Xinquan Automotive ‘s star products
– The top 2 products and services of Jiangsu Xinquan Automotive still accounts for major business revenue. This dependence on star products in Auto & Truck Parts industry has resulted into insufficient focus on developing new products, even though Jiangsu Xinquan Automotive has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Jiangsu Xinquan Automotive 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 Auto & Truck Parts industry using digital technology.
Skills based hiring in Auto & Truck Parts industry
– The stress on hiring functional specialists at Jiangsu Xinquan Automotive 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.
Slow to strategic competitive environment developments
– As Jiangsu Xinquan Automotive is one of the leading players in the Auto & Truck Parts industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Auto & Truck Parts industry in last five years.
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 Jiangsu Xinquan Automotive supply chain. Even after few cautionary changes, Jiangsu Xinquan Automotive is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Jiangsu Xinquan Automotive vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Jiangsu Xinquan Automotive is dominated by functional specialists. It is not different from other players in the Auto & Truck Parts industry, but Jiangsu Xinquan Automotive needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Jiangsu Xinquan Automotive to focus more on services in the Auto & Truck Parts industry rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Jiangsu Xinquan Automotive has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Auto & Truck Parts industry over the last five years. Jiangsu Xinquan Automotive 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.
Employees’ less understanding of Jiangsu Xinquan Automotive strategy
– From the outside it seems that the employees of Jiangsu Xinquan Automotive 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.
Jiangsu Xinquan Automotive Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Jiangsu Xinquan Automotive are -
Learning at scale
– Online learning technologies has now opened space for Jiangsu Xinquan Automotive 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.
Better consumer reach
– The expansion of the 5G network will help Jiangsu Xinquan Automotive to increase its market reach. Jiangsu Xinquan Automotive 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.
Creating value in data economy
– The success of analytics program of Jiangsu Xinquan Automotive has opened avenues for new revenue streams for the organization in Auto & Truck Parts industry. This can help Jiangsu Xinquan Automotive to build a more holistic ecosystem for Jiangsu Xinquan Automotive products in the Auto & Truck Parts industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Jiangsu Xinquan Automotive is facing challenges because of the dominance of functional experts in the organization. Jiangsu Xinquan Automotive can utilize new technology in the field of Auto & Truck Parts industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Buying journey improvements
– Jiangsu Xinquan Automotive can improve the customer journey of consumers in the Auto & Truck Parts 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Jiangsu Xinquan Automotive can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Jiangsu Xinquan Automotive 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 Jiangsu Xinquan Automotive to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Jiangsu Xinquan Automotive 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.
Building a culture of innovation
– managers at Jiangsu Xinquan Automotive 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 Auto & Truck Parts industry.
Using analytics as competitive advantage
– Jiangsu Xinquan Automotive has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Auto & Truck Parts sector. This continuous investment in analytics has enabled Jiangsu Xinquan Automotive to build a competitive advantage using analytics. The analytics driven competitive advantage can help Jiangsu Xinquan Automotive to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Jiangsu Xinquan Automotive can use these opportunities to build new business models that can help the communities that Jiangsu Xinquan Automotive operates in. Secondly it can use opportunities from government spending in Auto & Truck Parts sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Jiangsu Xinquan Automotive in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Auto & Truck Parts industry, and it will provide faster access to the consumers.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Auto & Truck Parts industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Jiangsu Xinquan Automotive 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. Jiangsu Xinquan Automotive 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.
Threats Jiangsu Xinquan Automotive External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Jiangsu Xinquan Automotive 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.
Consumer confidence and its impact on Jiangsu Xinquan Automotive 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 Auto & Truck Parts industry and other sectors.
Regulatory challenges
– Jiangsu Xinquan Automotive 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 Auto & Truck Parts industry regulations.
Increasing wage structure of Jiangsu Xinquan Automotive
– 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 Jiangsu Xinquan Automotive.
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. Jiangsu Xinquan Automotive needs to understand the core reasons impacting the Auto & Truck Parts industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Jiangsu Xinquan Automotive is facing in Auto & Truck Parts sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Jiangsu Xinquan Automotive 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 Auto & Truck Parts 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.
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 Jiangsu Xinquan Automotive in the Auto & Truck Parts 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, Jiangsu Xinquan Automotive may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Auto & Truck Parts sector.
High dependence on third party suppliers
– Jiangsu Xinquan Automotive 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Jiangsu Xinquan Automotive 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 Jiangsu Xinquan Automotive prominent markets.
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 Jiangsu Xinquan Automotive business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Jiangsu Xinquan Automotive Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Jiangsu Xinquan Automotive 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 Jiangsu Xinquan Automotive 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 Jiangsu Xinquan Automotive 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 Jiangsu Xinquan Automotive 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 Jiangsu Xinquan Automotive needs to make to build a sustainable competitive advantage.