SWOT Analysis / TOWS Matrix for Chongqing Lummy Pharmaceutical (China)
Based on various researches at Oak Spring University , Chongqing Lummy Pharmaceutical is operating in a macro-environment that has been destablized by – wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models,
challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Chongqing Lummy Pharmaceutical
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Chongqing Lummy Pharmaceutical can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Chongqing Lummy Pharmaceutical, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Chongqing Lummy Pharmaceutical 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 Chongqing Lummy Pharmaceutical can be done for the following purposes –
1. Strategic planning of Chongqing Lummy Pharmaceutical
2. Improving business portfolio management of Chongqing Lummy Pharmaceutical
3. Assessing feasibility of the new initiative in China
4. Making a Biotechnology & Drugs sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Chongqing Lummy Pharmaceutical
Strengths of Chongqing Lummy Pharmaceutical | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Chongqing Lummy Pharmaceutical are -
Ability to recruit top talent
– Chongqing Lummy Pharmaceutical is one of the leading players in the Biotechnology & Drugs 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.
Cross disciplinary teams
– Horizontal connected teams at the Chongqing Lummy Pharmaceutical 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.
High brand equity
– Chongqing Lummy Pharmaceutical has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Chongqing Lummy Pharmaceutical to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Chongqing Lummy Pharmaceutical 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 Chongqing Lummy Pharmaceutical is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Chongqing Lummy Pharmaceutical emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Biotechnology & Drugs industry
– Chongqing Lummy Pharmaceutical has clearly differentiated products in the market place. This has enabled Chongqing Lummy Pharmaceutical to fetch slight price premium compare to the competitors in the Biotechnology & Drugs industry. The sustainable margins have also helped Chongqing Lummy Pharmaceutical to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Chongqing Lummy Pharmaceutical has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Chongqing Lummy Pharmaceutical 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.
Strong track record of project management in the Biotechnology & Drugs industry
– Chongqing Lummy Pharmaceutical is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Chongqing Lummy Pharmaceutical has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Biotechnology & Drugs industry. Secondly the value chain collaborators of Chongqing Lummy Pharmaceutical have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Biotechnology & Drugs industry
- digital transformation varies from industry to industry. For Chongqing Lummy Pharmaceutical digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Chongqing Lummy Pharmaceutical 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.
Low bargaining power of suppliers
– Suppliers of Chongqing Lummy Pharmaceutical in the Healthcare sector have low bargaining power. Chongqing Lummy Pharmaceutical has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Chongqing Lummy Pharmaceutical to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Chongqing Lummy Pharmaceutical is present in almost all the verticals within the Biotechnology & Drugs industry. This has provided Chongqing Lummy Pharmaceutical 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.
Analytics focus
– Chongqing Lummy Pharmaceutical 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 Biotechnology & Drugs 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.
Weaknesses of Chongqing Lummy Pharmaceutical | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Chongqing Lummy Pharmaceutical are -
Interest costs
– Compare to the competition, Chongqing Lummy Pharmaceutical 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.
Aligning sales with marketing
– From the outside it seems that Chongqing Lummy Pharmaceutical needs to have more collaboration between its sales team and marketing team. Sales professionals in the Biotechnology & Drugs industry have deep experience in developing customer relationships. Marketing department at Chongqing Lummy Pharmaceutical can leverage the sales team experience to cultivate customer relationships as Chongqing Lummy Pharmaceutical is planning to shift buying processes online.
Products dominated business model
– Even though Chongqing Lummy Pharmaceutical has some of the most successful models in the Biotechnology & Drugs industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Chongqing Lummy Pharmaceutical should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative at Chongqing Lummy Pharmaceutical, in the dynamic environment of Biotechnology & Drugs industry it has struggled to respond to the nimble upstart competition. Chongqing Lummy Pharmaceutical has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Chongqing Lummy Pharmaceutical 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.
Capital Spending Reduction
– Even during the low interest decade, Chongqing Lummy Pharmaceutical 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 Biotechnology & Drugs industry using digital technology.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Chongqing Lummy Pharmaceutical is slow explore the new channels of communication. These new channels of communication can help Chongqing Lummy Pharmaceutical to provide better information regarding Biotechnology & Drugs products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As Chongqing Lummy Pharmaceutical is one of the leading players in the Biotechnology & Drugs industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Biotechnology & Drugs industry in last five years.
Slow decision making process
– As mentioned earlier in the report, Chongqing Lummy Pharmaceutical has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Biotechnology & Drugs industry over the last five years. Chongqing Lummy Pharmaceutical 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.
Low market penetration in new markets
– Outside its home market of China, Chongqing Lummy Pharmaceutical needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee of Chongqing Lummy Pharmaceutical is just above the Biotechnology & Drugs 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.
Chongqing Lummy Pharmaceutical Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Chongqing Lummy Pharmaceutical are -
Use of Bitcoin and other crypto currencies for transactions in Biotechnology & Drugs industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Chongqing Lummy Pharmaceutical in the Biotechnology & Drugs industry. Now Chongqing Lummy Pharmaceutical can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Biotechnology & Drugs industry, but it has also influenced the consumer preferences. Chongqing Lummy Pharmaceutical can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Chongqing Lummy Pharmaceutical 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.
Using analytics as competitive advantage
– Chongqing Lummy Pharmaceutical has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Biotechnology & Drugs sector. This continuous investment in analytics has enabled Chongqing Lummy Pharmaceutical to build a competitive advantage using analytics. The analytics driven competitive advantage can help Chongqing Lummy Pharmaceutical to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Chongqing Lummy Pharmaceutical 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.
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. Chongqing Lummy Pharmaceutical can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Chongqing Lummy Pharmaceutical can improve the customer journey of consumers in the Biotechnology & Drugs 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, Chongqing Lummy Pharmaceutical can use these opportunities to build new business models that can help the communities that Chongqing Lummy Pharmaceutical operates in. Secondly it can use opportunities from government spending in Biotechnology & Drugs sector.
Better consumer reach
– The expansion of the 5G network will help Chongqing Lummy Pharmaceutical to increase its market reach. Chongqing Lummy Pharmaceutical 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Chongqing Lummy Pharmaceutical to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Chongqing Lummy Pharmaceutical to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Chongqing Lummy Pharmaceutical can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Chongqing Lummy Pharmaceutical 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 Biotechnology & Drugs industry.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Chongqing Lummy Pharmaceutical in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Biotechnology & Drugs industry, and it will provide faster access to the consumers.
Threats Chongqing Lummy Pharmaceutical External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Chongqing Lummy Pharmaceutical are -
Stagnating economy with rate increase
– Chongqing Lummy Pharmaceutical 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 Biotechnology & Drugs industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Chongqing Lummy Pharmaceutical in Biotechnology & Drugs industry. The Biotechnology & Drugs 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.
High dependence on third party suppliers
– Chongqing Lummy Pharmaceutical 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 Chongqing Lummy Pharmaceutical is facing in Biotechnology & Drugs sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Chongqing Lummy Pharmaceutical needs to understand the core reasons impacting the Biotechnology & Drugs industry. This will help it in building a better workplace.
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 Chongqing Lummy Pharmaceutical business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Chongqing Lummy Pharmaceutical may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Biotechnology & Drugs sector.
Consumer confidence and its impact on Chongqing Lummy Pharmaceutical 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 Biotechnology & Drugs industry and other sectors.
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 Chongqing Lummy Pharmaceutical.
Easy access to finance
– Easy access to finance in Biotechnology & Drugs industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Chongqing Lummy Pharmaceutical can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Chongqing Lummy Pharmaceutical 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.
Technology acceleration in Forth Industrial Revolution
– Chongqing Lummy Pharmaceutical has witnessed rapid integration of technology during Covid-19 in the Biotechnology & Drugs industry. As one of the leading players in the industry, Chongqing Lummy Pharmaceutical needs to keep up with the evolution of technology in the Biotechnology & Drugs 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Biotechnology & Drugs industry are lowering. It can presents Chongqing Lummy Pharmaceutical with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Biotechnology & Drugs sector.
Weighted SWOT Analysis of Chongqing Lummy Pharmaceutical Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Chongqing Lummy Pharmaceutical 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 Chongqing Lummy Pharmaceutical 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 Chongqing Lummy Pharmaceutical 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 Chongqing Lummy Pharmaceutical 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 Chongqing Lummy Pharmaceutical needs to make to build a sustainable competitive advantage.
