Dongfang Therm A (958) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Dongfang Therm A (China)

Based on various researches at Oak Spring University , Dongfang Therm A is operating in a macro-environment that has been destablized by – increasing energy prices, technology disruption, geopolitical disruptions, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, wage bills are increasing, etc

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Introduction to SWOT Analysis of Dongfang Therm A

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

According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

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

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

The strengths of Dongfang Therm A are -

Innovation driven organization

– Dongfang Therm A is one of the most innovative firm in Business Services sector.

Strong track record of project management in the Business Services industry

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

Learning organization

- Dongfang Therm A is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Dongfang Therm A is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Dongfang Therm A emphasize – knowledge, initiative, and innovation.

High switching costs

– The high switching costs that Dongfang Therm A has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.

Ability to lead change in Business Services

– Dongfang Therm A is one of the leading players in the Business Services industry in China. Over the years it has not only transformed the business landscape in the Business Services industry in China but also across the existing markets. The ability to lead change has enabled Dongfang Therm A in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Effective Research and Development (R&D)

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

Analytics focus

– Dongfang Therm A is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the Business Services 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.

Diverse revenue streams

– Dongfang Therm A is present in almost all the verticals within the Business Services industry. This has provided Dongfang Therm A a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.

Ability to recruit top talent

– Dongfang Therm A is one of the leading players in the Business Services 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.

Successful track record of launching new products

– Dongfang Therm A has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Dongfang Therm A 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.

Training and development

– Dongfang Therm A has one of the best training and development program in Services 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.

Highly skilled collaborators

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

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

The weaknesses of Dongfang Therm A are -

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Dongfang Therm A is slow explore the new channels of communication. These new channels of communication can help Dongfang Therm A to provide better information regarding Business Services products and services. It can also build an online community to further reach out to potential customers.

Skills based hiring in Business Services industry

– The stress on hiring functional specialists at Dongfang Therm A has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.

Workers concerns about automation

– As automation is fast increasing in the Business Services industry, Dongfang Therm A 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.

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

Compensation and incentives

– The revenue per employee of Dongfang Therm A is just above the Business Services 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 Dongfang Therm A ‘s star products

– The top 2 products and services of Dongfang Therm A still accounts for major business revenue. This dependence on star products in Business Services industry has resulted into insufficient focus on developing new products, even though Dongfang Therm A has relatively successful track record of launching new products.

Aligning sales with marketing

– From the outside it seems that Dongfang Therm A needs to have more collaboration between its sales team and marketing team. Sales professionals in the Business Services industry have deep experience in developing customer relationships. Marketing department at Dongfang Therm A can leverage the sales team experience to cultivate customer relationships as Dongfang Therm A is planning to shift buying processes online.

Increasing silos among functional specialists

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

Slow to strategic competitive environment developments

– As Dongfang Therm A is one of the leading players in the Business Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Business Services industry in last five years.

Need for greater diversity

– Dongfang Therm A has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.

Slow decision making process

– As mentioned earlier in the report, Dongfang Therm A has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Business Services industry over the last five years. Dongfang Therm A 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.

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

The opportunities of Dongfang Therm A are -

Creating value in data economy

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

Building a culture of innovation

– managers at Dongfang Therm A 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 Business Services industry.

Leveraging digital technologies

– Dongfang Therm A 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.

Better consumer reach

– The expansion of the 5G network will help Dongfang Therm A to increase its market reach. Dongfang Therm A will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.

Reforming the budgeting process

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

Low interest rates

– Even though inflation is raising its head in most developed economies, Dongfang Therm A 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, Dongfang Therm A can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help Dongfang Therm A to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Increase in government spending

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

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Business Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Dongfang Therm A can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Dongfang Therm A can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.

Buying journey improvements

– Dongfang Therm A can improve the customer journey of consumers in the Business Services 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.

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. Dongfang Therm A can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Manufacturing automation

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

Using analytics as competitive advantage

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

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Threats Dongfang Therm A External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Dongfang Therm A are -

Stagnating economy with rate increase

– Dongfang Therm A can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the Business Services industry.

Learning curve for new practices

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

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.

Barriers of entry lowering

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

Shortening product life cycle

– it is one of the major threat that Dongfang Therm A is facing in Business Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Easy access to finance

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

Environmental challenges

– Dongfang Therm A needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Dongfang Therm A can take advantage of this fund but it will also bring new competitors in the Business Services industry.

Increasing wage structure of Dongfang Therm A

– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Dongfang Therm A.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Dongfang Therm A in Business Services industry. The Business Services 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.

Technology acceleration in Forth Industrial Revolution

– Dongfang Therm A has witnessed rapid integration of technology during Covid-19 in the Business Services industry. As one of the leading players in the industry, Dongfang Therm A needs to keep up with the evolution of technology in the Business Services 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.

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 Dongfang Therm A in the Business Services sector and impact the bottomline of the organization.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Dongfang Therm A 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 Dongfang Therm A prominent markets.

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. Dongfang Therm A needs to understand the core reasons impacting the Business Services industry. This will help it in building a better workplace.

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Weighted SWOT Analysis of Dongfang Therm A Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Dongfang Therm A needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants. We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –

First stage for doing weighted SWOT analysis of Dongfang Therm A is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.

Second stage for conducting weighted SWOT analysis of Dongfang Therm A is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.

Third stage of constructing weighted SWOT analysis of Dongfang Therm A to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Dongfang Therm A needs to make to build a sustainable competitive advantage.

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