Luoyang Bearing A (2046) SWOT Analysis / TOWS Matrix / MBA Resources
Misc. Fabricated Products
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Luoyang Bearing A (China)
Based on various researches at Oak Spring University , Luoyang Bearing A is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, technology disruption, cloud computing is disrupting traditional business models, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs,
there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Luoyang Bearing A
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Luoyang Bearing A can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Luoyang Bearing A, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Luoyang Bearing 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.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Luoyang Bearing A can be done for the following purposes –
1. Strategic planning of Luoyang Bearing A
2. Improving business portfolio management of Luoyang Bearing A
3. Assessing feasibility of the new initiative in China
4. Making a Misc. Fabricated Products sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Luoyang Bearing A
Strengths of Luoyang Bearing A | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Luoyang Bearing A are -
Cross disciplinary teams
– Horizontal connected teams at the Luoyang Bearing A 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.
Ability to lead change in Misc. Fabricated Products
– Luoyang Bearing A is one of the leading players in the Misc. Fabricated Products industry in China. Over the years it has not only transformed the business landscape in the Misc. Fabricated Products industry in China but also across the existing markets. The ability to lead change has enabled Luoyang Bearing A in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Misc. Fabricated Products industry
- digital transformation varies from industry to industry. For Luoyang Bearing A digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Luoyang Bearing A 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.
Learning organization
- Luoyang Bearing 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 Luoyang Bearing A is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Luoyang Bearing A emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Misc. Fabricated Products industry
– Luoyang Bearing A has clearly differentiated products in the market place. This has enabled Luoyang Bearing A to fetch slight price premium compare to the competitors in the Misc. Fabricated Products industry. The sustainable margins have also helped Luoyang Bearing A to invest into research and development (R&D) and innovation.
Organizational Resilience of Luoyang Bearing A
– The covid-19 pandemic has put organizational resilience at the centre of everthing Luoyang Bearing A does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Luoyang Bearing A has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Luoyang Bearing 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.
High switching costs
– The high switching costs that Luoyang Bearing 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.
High brand equity
– Luoyang Bearing A has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Luoyang Bearing A to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Luoyang Bearing A is present in almost all the verticals within the Misc. Fabricated Products industry. This has provided Luoyang Bearing 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.
Effective Research and Development (R&D)
– Luoyang Bearing A has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Luoyang Bearing A staying ahead in the Misc. Fabricated Products industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Luoyang Bearing A in the Basic Materials sector have low bargaining power. Luoyang Bearing A has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Luoyang Bearing A to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses of Luoyang Bearing A | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Luoyang Bearing A are -
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 Luoyang Bearing A supply chain. Even after few cautionary changes, Luoyang Bearing A is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Luoyang Bearing A vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners in Misc. Fabricated Products industry
– because of the regulatory requirements in China, Luoyang Bearing A 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 Misc. Fabricated Products industry.
High operating costs
– Compare to the competitors, Luoyang Bearing A has high operating costs in the Misc. Fabricated Products industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Luoyang Bearing A lucrative customers.
Employees’ less understanding of Luoyang Bearing A strategy
– From the outside it seems that the employees of Luoyang Bearing A 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.
Products dominated business model
– Even though Luoyang Bearing A has some of the most successful models in the Misc. Fabricated Products industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Luoyang Bearing A should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Luoyang Bearing A 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 Misc. Fabricated Products industry using digital technology.
No frontier risks strategy
– From the 10K / annual statement of Luoyang Bearing A, it seems that company is thinking out the frontier risks that can impact Misc. Fabricated Products 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, Luoyang Bearing 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 Misc. Fabricated Products industry over the last five years. Luoyang Bearing 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.
Aligning sales with marketing
– From the outside it seems that Luoyang Bearing A needs to have more collaboration between its sales team and marketing team. Sales professionals in the Misc. Fabricated Products industry have deep experience in developing customer relationships. Marketing department at Luoyang Bearing A can leverage the sales team experience to cultivate customer relationships as Luoyang Bearing A is planning to shift buying processes online.
High dependence on Luoyang Bearing A ‘s star products
– The top 2 products and services of Luoyang Bearing A still accounts for major business revenue. This dependence on star products in Misc. Fabricated Products industry has resulted into insufficient focus on developing new products, even though Luoyang Bearing A has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Luoyang Bearing A is dominated by functional specialists. It is not different from other players in the Misc. Fabricated Products industry, but Luoyang Bearing A needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Luoyang Bearing A to focus more on services in the Misc. Fabricated Products industry rather than just following the product oriented approach.
Luoyang Bearing A Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Luoyang Bearing A are -
Developing new processes and practices
– Luoyang Bearing A can develop new processes and procedures in Misc. Fabricated Products 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.
Building a culture of innovation
– managers at Luoyang Bearing 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 Misc. Fabricated Products industry.
Buying journey improvements
– Luoyang Bearing A can improve the customer journey of consumers in the Misc. Fabricated Products 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Luoyang Bearing A can use these opportunities to build new business models that can help the communities that Luoyang Bearing A operates in. Secondly it can use opportunities from government spending in Misc. Fabricated Products sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Luoyang Bearing A in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Misc. Fabricated Products industry, and it will provide faster access to the consumers.
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. Luoyang Bearing A can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Luoyang Bearing A 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.
Use of Bitcoin and other crypto currencies for transactions in Misc. Fabricated Products industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Luoyang Bearing A in the Misc. Fabricated Products industry. Now Luoyang Bearing A can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Luoyang Bearing A has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Misc. Fabricated Products industry, but it has also influenced the consumer preferences. Luoyang Bearing A can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Luoyang Bearing A has opened avenues for new revenue streams for the organization in Misc. Fabricated Products industry. This can help Luoyang Bearing A to build a more holistic ecosystem for Luoyang Bearing A products in the Misc. Fabricated Products industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Luoyang Bearing A 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Misc. Fabricated Products industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Luoyang Bearing 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. Luoyang Bearing 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.
Threats Luoyang Bearing A External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Luoyang Bearing A are -
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. Luoyang Bearing A 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.
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 Luoyang Bearing A in the Misc. Fabricated Products sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Luoyang Bearing A 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.
Shortening product life cycle
– it is one of the major threat that Luoyang Bearing A is facing in Misc. Fabricated Products sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Luoyang Bearing A has witnessed rapid integration of technology during Covid-19 in the Misc. Fabricated Products industry. As one of the leading players in the industry, Luoyang Bearing A needs to keep up with the evolution of technology in the Misc. Fabricated Products 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.
Environmental challenges
– Luoyang Bearing 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. Luoyang Bearing A can take advantage of this fund but it will also bring new competitors in the Misc. Fabricated Products industry.
Stagnating economy with rate increase
– Luoyang Bearing 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 Misc. Fabricated Products industry.
Consumer confidence and its impact on Luoyang Bearing A 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 Misc. Fabricated Products industry and other sectors.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Luoyang Bearing 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 Luoyang Bearing A prominent markets.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Luoyang Bearing A business can come under increasing regulations regarding data privacy, data security, etc.
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.
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. Luoyang Bearing A needs to understand the core reasons impacting the Misc. Fabricated Products industry. This will help it in building a better workplace.
Increasing wage structure of Luoyang Bearing 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 Luoyang Bearing A.
Weighted SWOT Analysis of Luoyang Bearing A Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Luoyang Bearing 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 Luoyang Bearing 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 Luoyang Bearing 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 Luoyang Bearing 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 Luoyang Bearing A needs to make to build a sustainable competitive advantage.