SWOT Analysis / TOWS Matrix for Zhejiang Huatong (China)
Based on various researches at Oak Spring University , Zhejiang Huatong is operating in a macro-environment that has been destablized by – increasing commodity prices, supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy,
geopolitical disruptions, central banks are concerned over increasing inflation, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Zhejiang Huatong can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Zhejiang Huatong, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Zhejiang Huatong 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 Zhejiang Huatong can be done for the following purposes –
1. Strategic planning of Zhejiang Huatong
2. Improving business portfolio management of Zhejiang Huatong
3. Assessing feasibility of the new initiative in China
4. Making a Fish/Livestock sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Zhejiang Huatong
Strengths of Zhejiang Huatong | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Zhejiang Huatong are -
Training and development
– Zhejiang Huatong has one of the best training and development program in Consumer/Non-Cyclical 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.
Ability to lead change in Fish/Livestock
– Zhejiang Huatong is one of the leading players in the Fish/Livestock industry in China. Over the years it has not only transformed the business landscape in the Fish/Livestock industry in China but also across the existing markets. The ability to lead change has enabled Zhejiang Huatong in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Zhejiang Huatong 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.
Learning organization
- Zhejiang Huatong 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 Zhejiang Huatong is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Zhejiang Huatong emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Fish/Livestock industry
– Zhejiang Huatong has clearly differentiated products in the market place. This has enabled Zhejiang Huatong to fetch slight price premium compare to the competitors in the Fish/Livestock industry. The sustainable margins have also helped Zhejiang Huatong to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Zhejiang Huatong in Fish/Livestock industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Zhejiang Huatong has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Fish/Livestock industry. Secondly the value chain collaborators of Zhejiang Huatong have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Zhejiang Huatong is one of the most innovative firm in Fish/Livestock sector.
Successful track record of launching new products
– Zhejiang Huatong has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Zhejiang Huatong 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.
Diverse revenue streams
– Zhejiang Huatong is present in almost all the verticals within the Fish/Livestock industry. This has provided Zhejiang Huatong 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
– Zhejiang Huatong is one of the leading players in the Fish/Livestock 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.
Effective Research and Development (R&D)
– Zhejiang Huatong has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Zhejiang Huatong staying ahead in the Fish/Livestock industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses of Zhejiang Huatong | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Zhejiang Huatong are -
Employees’ less understanding of Zhejiang Huatong strategy
– From the outside it seems that the employees of Zhejiang Huatong 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.
Ability to respond to the competition
– As the decision making is very deliberative at Zhejiang Huatong, in the dynamic environment of Fish/Livestock industry it has struggled to respond to the nimble upstart competition. Zhejiang Huatong has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Zhejiang Huatong has some of the most successful models in the Fish/Livestock industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Zhejiang Huatong should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners in Fish/Livestock industry
– because of the regulatory requirements in China, Zhejiang Huatong 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 Fish/Livestock industry.
High cash cycle compare to competitors
Zhejiang Huatong has a high cash cycle compare to other players in the Fish/Livestock industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Zhejiang Huatong is slow explore the new channels of communication. These new channels of communication can help Zhejiang Huatong to provide better information regarding Fish/Livestock products and services. It can also build an online community to further reach out to potential customers.
Increasing silos among functional specialists
– The organizational structure of Zhejiang Huatong is dominated by functional specialists. It is not different from other players in the Fish/Livestock industry, but Zhejiang Huatong needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Zhejiang Huatong to focus more on services in the Fish/Livestock industry rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee of Zhejiang Huatong is just above the Fish/Livestock 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.
No frontier risks strategy
– From the 10K / annual statement of Zhejiang Huatong, it seems that company is thinking out the frontier risks that can impact Fish/Livestock 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.
Slow decision making process
– As mentioned earlier in the report, Zhejiang Huatong has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Fish/Livestock industry over the last five years. Zhejiang Huatong 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.
Aligning sales with marketing
– From the outside it seems that Zhejiang Huatong needs to have more collaboration between its sales team and marketing team. Sales professionals in the Fish/Livestock industry have deep experience in developing customer relationships. Marketing department at Zhejiang Huatong can leverage the sales team experience to cultivate customer relationships as Zhejiang Huatong is planning to shift buying processes online.
Zhejiang Huatong Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Zhejiang Huatong are -
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. Zhejiang Huatong can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Zhejiang Huatong 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 Zhejiang Huatong to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Zhejiang Huatong can develop new processes and procedures in Fish/Livestock 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Zhejiang Huatong 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Fish/Livestock industry, but it has also influenced the consumer preferences. Zhejiang Huatong 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 Zhejiang Huatong 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 Fish/Livestock industry.
Learning at scale
– Online learning technologies has now opened space for Zhejiang Huatong 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 Zhejiang Huatong to increase its market reach. Zhejiang Huatong 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.
Use of Bitcoin and other crypto currencies for transactions in Fish/Livestock industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Zhejiang Huatong in the Fish/Livestock industry. Now Zhejiang Huatong can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Zhejiang Huatong can use these opportunities to build new business models that can help the communities that Zhejiang Huatong operates in. Secondly it can use opportunities from government spending in Fish/Livestock sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Zhejiang Huatong can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Zhejiang Huatong can use the latest technology developments to improve its manufacturing and designing process in Fish/Livestock 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.
Leveraging digital technologies
– Zhejiang Huatong 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.
Threats Zhejiang Huatong External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Zhejiang Huatong 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.
Regulatory challenges
– Zhejiang Huatong 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 Fish/Livestock industry regulations.
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. Zhejiang Huatong needs to understand the core reasons impacting the Fish/Livestock industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Zhejiang Huatong is facing in Fish/Livestock sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Zhejiang Huatong
– 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 Zhejiang Huatong.
Easy access to finance
– Easy access to finance in Fish/Livestock industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Zhejiang Huatong can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Zhejiang Huatong may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Fish/Livestock sector.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Fish/Livestock industry are lowering. It can presents Zhejiang Huatong with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Fish/Livestock sector.
Consumer confidence and its impact on Zhejiang Huatong 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 Fish/Livestock industry and other sectors.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Zhejiang Huatong 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 Zhejiang Huatong prominent markets.
Technology acceleration in Forth Industrial Revolution
– Zhejiang Huatong has witnessed rapid integration of technology during Covid-19 in the Fish/Livestock industry. As one of the leading players in the industry, Zhejiang Huatong needs to keep up with the evolution of technology in the Fish/Livestock 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.
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. Zhejiang Huatong 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 Zhejiang Huatong business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Zhejiang Huatong Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Zhejiang Huatong 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 Zhejiang Huatong 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 Zhejiang Huatong 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 Zhejiang Huatong 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 Zhejiang Huatong needs to make to build a sustainable competitive advantage.
