Top Energy Shanxi (600780) SWOT Analysis / TOWS Matrix / MBA Resources
Electric Utilities
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Top Energy Shanxi (China)
Based on various researches at Oak Spring University , Top Energy Shanxi is operating in a macro-environment that has been destablized by – wage bills are increasing, increasing energy prices, geopolitical disruptions, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs,
supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Top Energy Shanxi
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Top Energy Shanxi can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Top Energy Shanxi, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Top Energy Shanxi 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 Top Energy Shanxi can be done for the following purposes –
1. Strategic planning of Top Energy Shanxi
2. Improving business portfolio management of Top Energy Shanxi
3. Assessing feasibility of the new initiative in China
4. Making a Electric Utilities sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Top Energy Shanxi
Strengths of Top Energy Shanxi | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Top Energy Shanxi are -
Learning organization
- Top Energy Shanxi 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 Top Energy Shanxi is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Top Energy Shanxi emphasize – knowledge, initiative, and innovation.
Ability to lead change in Electric Utilities
– Top Energy Shanxi is one of the leading players in the Electric Utilities industry in China. Over the years it has not only transformed the business landscape in the Electric Utilities industry in China but also across the existing markets. The ability to lead change has enabled Top Energy Shanxi in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Top Energy Shanxi 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 Electric Utilities 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.
Low bargaining power of suppliers
– Suppliers of Top Energy Shanxi in the Utilities sector have low bargaining power. Top Energy Shanxi has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Top Energy Shanxi to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Top Energy Shanxi has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Electric Utilities industry. Secondly the value chain collaborators of Top Energy Shanxi have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Electric Utilities industry
- digital transformation varies from industry to industry. For Top Energy Shanxi digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Top Energy Shanxi 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.
Diverse revenue streams
– Top Energy Shanxi is present in almost all the verticals within the Electric Utilities industry. This has provided Top Energy Shanxi 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
– Top Energy Shanxi is one of the most innovative firm in Electric Utilities sector.
High switching costs
– The high switching costs that Top Energy Shanxi 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.
Organizational Resilience of Top Energy Shanxi
– The covid-19 pandemic has put organizational resilience at the centre of everthing Top Energy Shanxi does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Top Energy Shanxi has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Top Energy Shanxi staying ahead in the Electric Utilities industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Top Energy Shanxi has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Top Energy Shanxi 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.
Weaknesses of Top Energy Shanxi | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Top Energy Shanxi are -
High bargaining power of channel partners in Electric Utilities industry
– because of the regulatory requirements in China, Top Energy Shanxi 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 Electric Utilities industry.
Slow to strategic competitive environment developments
– As Top Energy Shanxi is one of the leading players in the Electric Utilities industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Electric Utilities industry in last five years.
Increasing silos among functional specialists
– The organizational structure of Top Energy Shanxi is dominated by functional specialists. It is not different from other players in the Electric Utilities industry, but Top Energy Shanxi needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Top Energy Shanxi to focus more on services in the Electric Utilities industry rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, Top Energy Shanxi has high operating costs in the Electric Utilities industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Top Energy Shanxi lucrative customers.
High dependence on Top Energy Shanxi ‘s star products
– The top 2 products and services of Top Energy Shanxi still accounts for major business revenue. This dependence on star products in Electric Utilities industry has resulted into insufficient focus on developing new products, even though Top Energy Shanxi has relatively successful track record of launching new products.
Employees’ less understanding of Top Energy Shanxi strategy
– From the outside it seems that the employees of Top Energy Shanxi 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.
Aligning sales with marketing
– From the outside it seems that Top Energy Shanxi needs to have more collaboration between its sales team and marketing team. Sales professionals in the Electric Utilities industry have deep experience in developing customer relationships. Marketing department at Top Energy Shanxi can leverage the sales team experience to cultivate customer relationships as Top Energy Shanxi is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Top Energy Shanxi 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 Electric Utilities industry using digital technology.
Low market penetration in new markets
– Outside its home market of China, Top Energy Shanxi needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Top Energy Shanxi is slow explore the new channels of communication. These new channels of communication can help Top Energy Shanxi to provide better information regarding Electric Utilities products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative at Top Energy Shanxi, in the dynamic environment of Electric Utilities industry it has struggled to respond to the nimble upstart competition. Top Energy Shanxi has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Top Energy Shanxi Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Top Energy Shanxi are -
Learning at scale
– Online learning technologies has now opened space for Top Energy Shanxi 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
– Top Energy Shanxi can improve the customer journey of consumers in the Electric Utilities 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.
Better consumer reach
– The expansion of the 5G network will help Top Energy Shanxi to increase its market reach. Top Energy Shanxi 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.
Building a culture of innovation
– managers at Top Energy Shanxi 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 Electric Utilities industry.
Leveraging digital technologies
– Top Energy Shanxi 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
– Top Energy Shanxi can develop new processes and procedures in Electric Utilities 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 Top Energy Shanxi in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Electric Utilities industry, and it will provide faster access to the consumers.
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 Top Energy Shanxi 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Top Energy Shanxi is facing challenges because of the dominance of functional experts in the organization. Top Energy Shanxi can utilize new technology in the field of Electric Utilities industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Using analytics as competitive advantage
– Top Energy Shanxi has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Electric Utilities sector. This continuous investment in analytics has enabled Top Energy Shanxi to build a competitive advantage using analytics. The analytics driven competitive advantage can help Top Energy Shanxi to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Top Energy Shanxi has opened avenues for new revenue streams for the organization in Electric Utilities industry. This can help Top Energy Shanxi to build a more holistic ecosystem for Top Energy Shanxi products in the Electric Utilities industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Electric Utilities industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Top Energy Shanxi 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. Top Energy Shanxi 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 Top Energy Shanxi can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Top Energy Shanxi External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Top Energy Shanxi are -
Regulatory challenges
– Top Energy Shanxi 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 Electric Utilities industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Electric Utilities industry are lowering. It can presents Top Energy Shanxi with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Electric Utilities sector.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Top Energy Shanxi may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Electric Utilities sector.
Increasing wage structure of Top Energy Shanxi
– 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 Top Energy Shanxi.
Shortening product life cycle
– it is one of the major threat that Top Energy Shanxi is facing in Electric Utilities sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Top Energy Shanxi in the Electric Utilities sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Top Energy Shanxi has witnessed rapid integration of technology during Covid-19 in the Electric Utilities industry. As one of the leading players in the industry, Top Energy Shanxi needs to keep up with the evolution of technology in the Electric Utilities 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.
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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Top Energy Shanxi 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 Top Energy Shanxi prominent markets.
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. Top Energy Shanxi 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.
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 Top Energy Shanxi business can come under increasing regulations regarding data privacy, data security, etc.
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. Top Energy Shanxi needs to understand the core reasons impacting the Electric Utilities industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Top Energy Shanxi Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Top Energy Shanxi 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 Top Energy Shanxi 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 Top Energy Shanxi 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 Top Energy Shanxi 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 Top Energy Shanxi needs to make to build a sustainable competitive advantage.
