Based on various researches at Oak Spring University , Jiangsu Yulong Steel Pipe is operating in a macro-environment that has been destablized by – increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, technology disruption, wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, supply chains are disrupted by pandemic ,
digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, etc
Introduction to SWOT Analysis of Jiangsu Yulong Steel Pipe
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Jiangsu Yulong Steel Pipe can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Jiangsu Yulong Steel Pipe, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Jiangsu Yulong Steel Pipe 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 Yulong Steel Pipe can be done for the following purposes –
1. Strategic planning of Jiangsu Yulong Steel Pipe
2. Improving business portfolio management of Jiangsu Yulong Steel Pipe
3. Assessing feasibility of the new initiative in China
4. Making a Constr. - Supplies & Fixtures sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Jiangsu Yulong Steel Pipe
Strengths of Jiangsu Yulong Steel Pipe | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Jiangsu Yulong Steel Pipe are -
Sustainable margins compare to other players in Constr. - Supplies & Fixtures industry
– Jiangsu Yulong Steel Pipe has clearly differentiated products in the market place. This has enabled Jiangsu Yulong Steel Pipe to fetch slight price premium compare to the competitors in the Constr. - Supplies & Fixtures industry. The sustainable margins have also helped Jiangsu Yulong Steel Pipe to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Jiangsu Yulong Steel Pipe 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.
Highly skilled collaborators
– Jiangsu Yulong Steel Pipe has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Constr. - Supplies & Fixtures industry. Secondly the value chain collaborators of Jiangsu Yulong Steel Pipe have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Jiangsu Yulong Steel Pipe in the Capital Goods sector have low bargaining power. Jiangsu Yulong Steel Pipe has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Jiangsu Yulong Steel Pipe to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Jiangsu Yulong Steel Pipe in Constr. - Supplies & Fixtures industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Jiangsu Yulong Steel Pipe has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Jiangsu Yulong Steel Pipe staying ahead in the Constr. - Supplies & Fixtures industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Jiangsu Yulong Steel Pipe are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Strong track record of project management in the Constr. - Supplies & Fixtures industry
– Jiangsu Yulong Steel Pipe is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Jiangsu Yulong Steel Pipe has one of the best training and development program in Capital Goods industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Learning organization
- Jiangsu Yulong Steel Pipe 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 Yulong Steel Pipe is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Jiangsu Yulong Steel Pipe emphasize – knowledge, initiative, and innovation.
Ability to lead change in Constr. - Supplies & Fixtures
– Jiangsu Yulong Steel Pipe is one of the leading players in the Constr. - Supplies & Fixtures industry in China. Over the years it has not only transformed the business landscape in the Constr. - Supplies & Fixtures industry in China but also across the existing markets. The ability to lead change has enabled Jiangsu Yulong Steel Pipe in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Jiangsu Yulong Steel Pipe is present in almost all the verticals within the Constr. - Supplies & Fixtures industry. This has provided Jiangsu Yulong Steel Pipe 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.
Weaknesses of Jiangsu Yulong Steel Pipe | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Jiangsu Yulong Steel Pipe are -
High operating costs
– Compare to the competitors, Jiangsu Yulong Steel Pipe has high operating costs in the Constr. - Supplies & Fixtures industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Jiangsu Yulong Steel Pipe lucrative customers.
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 Yulong Steel Pipe supply chain. Even after few cautionary changes, Jiangsu Yulong Steel Pipe is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Jiangsu Yulong Steel Pipe vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Jiangsu Yulong Steel Pipe has a high cash cycle compare to other players in the Constr. - Supplies & Fixtures industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Compensation and incentives
– The revenue per employee of Jiangsu Yulong Steel Pipe is just above the Constr. - Supplies & Fixtures 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.
Interest costs
– Compare to the competition, Jiangsu Yulong Steel Pipe 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.
High dependence on Jiangsu Yulong Steel Pipe ‘s star products
– The top 2 products and services of Jiangsu Yulong Steel Pipe still accounts for major business revenue. This dependence on star products in Constr. - Supplies & Fixtures industry has resulted into insufficient focus on developing new products, even though Jiangsu Yulong Steel Pipe has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative at Jiangsu Yulong Steel Pipe, in the dynamic environment of Constr. - Supplies & Fixtures industry it has struggled to respond to the nimble upstart competition. Jiangsu Yulong Steel Pipe has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– From the 10K / annual statement of Jiangsu Yulong Steel Pipe, it seems that company is thinking out the frontier risks that can impact Constr. - Supplies & Fixtures 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.
Skills based hiring in Constr. - Supplies & Fixtures industry
– The stress on hiring functional specialists at Jiangsu Yulong Steel Pipe 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 Yulong Steel Pipe is one of the leading players in the Constr. - Supplies & Fixtures industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Constr. - Supplies & Fixtures industry in last five years.
Aligning sales with marketing
– From the outside it seems that Jiangsu Yulong Steel Pipe needs to have more collaboration between its sales team and marketing team. Sales professionals in the Constr. - Supplies & Fixtures industry have deep experience in developing customer relationships. Marketing department at Jiangsu Yulong Steel Pipe can leverage the sales team experience to cultivate customer relationships as Jiangsu Yulong Steel Pipe is planning to shift buying processes online.
Jiangsu Yulong Steel Pipe Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Jiangsu Yulong Steel Pipe are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Jiangsu Yulong Steel Pipe 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Jiangsu Yulong Steel Pipe 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 Yulong Steel Pipe to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Jiangsu Yulong Steel Pipe has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Constr. - Supplies & Fixtures sector. This continuous investment in analytics has enabled Jiangsu Yulong Steel Pipe to build a competitive advantage using analytics. The analytics driven competitive advantage can help Jiangsu Yulong Steel Pipe 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 Yulong Steel Pipe can use these opportunities to build new business models that can help the communities that Jiangsu Yulong Steel Pipe operates in. Secondly it can use opportunities from government spending in Constr. - Supplies & Fixtures sector.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Constr. - Supplies & Fixtures industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Jiangsu Yulong Steel Pipe 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 Yulong Steel Pipe 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Jiangsu Yulong Steel Pipe is facing challenges because of the dominance of functional experts in the organization. Jiangsu Yulong Steel Pipe can utilize new technology in the field of Constr. - Supplies & Fixtures industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Jiangsu Yulong Steel Pipe can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Jiangsu Yulong Steel Pipe 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 Yulong Steel Pipe to increase its market reach. Jiangsu Yulong Steel Pipe 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Jiangsu Yulong Steel Pipe can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Constr. - Supplies & Fixtures industry, but it has also influenced the consumer preferences. Jiangsu Yulong Steel Pipe can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Jiangsu Yulong Steel Pipe 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 Constr. - Supplies & Fixtures industry.
Use of Bitcoin and other crypto currencies for transactions in Constr. - Supplies & Fixtures industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Jiangsu Yulong Steel Pipe in the Constr. - Supplies & Fixtures industry. Now Jiangsu Yulong Steel Pipe can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Jiangsu Yulong Steel Pipe External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Jiangsu Yulong Steel Pipe are -
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 Jiangsu Yulong Steel Pipe.
Technology acceleration in Forth Industrial Revolution
– Jiangsu Yulong Steel Pipe has witnessed rapid integration of technology during Covid-19 in the Constr. - Supplies & Fixtures industry. As one of the leading players in the industry, Jiangsu Yulong Steel Pipe needs to keep up with the evolution of technology in the Constr. - Supplies & Fixtures 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.
High dependence on third party suppliers
– Jiangsu Yulong Steel Pipe 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Jiangsu Yulong Steel Pipe may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Constr. - Supplies & Fixtures sector.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Constr. - Supplies & Fixtures industry are lowering. It can presents Jiangsu Yulong Steel Pipe with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Constr. - Supplies & Fixtures 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.
Consumer confidence and its impact on Jiangsu Yulong Steel Pipe 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 Constr. - Supplies & Fixtures industry and other sectors.
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, Jiangsu Yulong Steel Pipe 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 Yulong Steel Pipe prominent markets.
Increasing wage structure of Jiangsu Yulong Steel Pipe
– 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 Yulong Steel Pipe.
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 Yulong Steel Pipe in the Constr. - Supplies & Fixtures sector and impact the bottomline of the organization.
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. Jiangsu Yulong Steel Pipe 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 Jiangsu Yulong Steel Pipe business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Jiangsu Yulong Steel Pipe Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Jiangsu Yulong Steel Pipe 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 Yulong Steel Pipe 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 Yulong Steel Pipe 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 Yulong Steel Pipe 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 Yulong Steel Pipe needs to make to build a sustainable competitive advantage.