Edifier Technology Co Ltd (2351) SWOT Analysis / TOWS Matrix / MBA Resources
Audio & Video Equipment
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Edifier Technology Co Ltd (China)
Based on various researches at Oak Spring University , Edifier Technology Co Ltd is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic ,
cloud computing is disrupting traditional business models, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Edifier Technology Co Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Edifier Technology Co Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Edifier Technology Co Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Edifier Technology Co Ltd 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 Edifier Technology Co Ltd can be done for the following purposes –
1. Strategic planning of Edifier Technology Co Ltd
2. Improving business portfolio management of Edifier Technology Co Ltd
3. Assessing feasibility of the new initiative in China
4. Making a Audio & Video Equipment sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Edifier Technology Co Ltd
Strengths of Edifier Technology Co Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Edifier Technology Co Ltd are -
Training and development
– Edifier Technology Co Ltd has one of the best training and development program in Consumer 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.
Highly skilled collaborators
– Edifier Technology Co Ltd has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Audio & Video Equipment industry. Secondly the value chain collaborators of Edifier Technology Co Ltd have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Edifier Technology Co Ltd 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.
Strong track record of project management in the Audio & Video Equipment industry
– Edifier Technology Co Ltd is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Edifier Technology Co Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Edifier Technology Co Ltd 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.
Learning organization
- Edifier Technology Co Ltd 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 Edifier Technology Co Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Edifier Technology Co Ltd emphasize – knowledge, initiative, and innovation.
High brand equity
– Edifier Technology Co Ltd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Edifier Technology Co Ltd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Edifier Technology Co Ltd is one of the most innovative firm in Audio & Video Equipment sector.
Low bargaining power of suppliers
– Suppliers of Edifier Technology Co Ltd in the Consumer Cyclical sector have low bargaining power. Edifier Technology Co Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Edifier Technology Co Ltd to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Edifier Technology Co Ltd 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 Audio & Video Equipment 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.
Sustainable margins compare to other players in Audio & Video Equipment industry
– Edifier Technology Co Ltd has clearly differentiated products in the market place. This has enabled Edifier Technology Co Ltd to fetch slight price premium compare to the competitors in the Audio & Video Equipment industry. The sustainable margins have also helped Edifier Technology Co Ltd to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Edifier Technology Co Ltd 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.
Weaknesses of Edifier Technology Co Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Edifier Technology Co Ltd are -
Skills based hiring in Audio & Video Equipment industry
– The stress on hiring functional specialists at Edifier Technology Co Ltd 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.
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 Edifier Technology Co Ltd supply chain. Even after few cautionary changes, Edifier Technology Co Ltd is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Edifier Technology Co Ltd vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, Edifier Technology Co Ltd has high operating costs in the Audio & Video Equipment industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Edifier Technology Co Ltd lucrative customers.
Lack of clear differentiation of Edifier Technology Co Ltd products
– To increase the profitability and margins on the products, Edifier Technology Co Ltd needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on Edifier Technology Co Ltd ‘s star products
– The top 2 products and services of Edifier Technology Co Ltd still accounts for major business revenue. This dependence on star products in Audio & Video Equipment industry has resulted into insufficient focus on developing new products, even though Edifier Technology Co Ltd has relatively successful track record of launching new products.
Need for greater diversity
– Edifier Technology Co Ltd 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.
High bargaining power of channel partners in Audio & Video Equipment industry
– because of the regulatory requirements in China, Edifier Technology Co Ltd 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 Audio & Video Equipment industry.
Ability to respond to the competition
– As the decision making is very deliberative at Edifier Technology Co Ltd, in the dynamic environment of Audio & Video Equipment industry it has struggled to respond to the nimble upstart competition. Edifier Technology Co Ltd has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Edifier Technology Co Ltd 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 Audio & Video Equipment industry using digital technology.
Workers concerns about automation
– As automation is fast increasing in the Audio & Video Equipment industry, Edifier Technology Co Ltd 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Edifier Technology Co Ltd is slow explore the new channels of communication. These new channels of communication can help Edifier Technology Co Ltd to provide better information regarding Audio & Video Equipment products and services. It can also build an online community to further reach out to potential customers.
Edifier Technology Co Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Edifier Technology Co Ltd are -
Creating value in data economy
– The success of analytics program of Edifier Technology Co Ltd has opened avenues for new revenue streams for the organization in Audio & Video Equipment industry. This can help Edifier Technology Co Ltd to build a more holistic ecosystem for Edifier Technology Co Ltd products in the Audio & Video Equipment industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Edifier Technology Co Ltd to increase its market reach. Edifier Technology Co Ltd 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 Edifier Technology Co Ltd 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 Edifier Technology Co Ltd to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Edifier Technology Co Ltd 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.
Buying journey improvements
– Edifier Technology Co Ltd can improve the customer journey of consumers in the Audio & Video Equipment 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.
Developing new processes and practices
– Edifier Technology Co Ltd can develop new processes and procedures in Audio & Video Equipment 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Edifier Technology Co Ltd is facing challenges because of the dominance of functional experts in the organization. Edifier Technology Co Ltd can utilize new technology in the field of Audio & Video Equipment industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Loyalty marketing
– Edifier Technology Co Ltd 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.
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. Edifier Technology Co Ltd can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Edifier Technology Co Ltd can use the latest technology developments to improve its manufacturing and designing process in Audio & Video Equipment 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
– Edifier Technology Co Ltd 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Edifier Technology Co Ltd 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 Edifier Technology Co Ltd to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Use of Bitcoin and other crypto currencies for transactions in Audio & Video Equipment industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Edifier Technology Co Ltd in the Audio & Video Equipment industry. Now Edifier Technology Co Ltd can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Edifier Technology Co Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Edifier Technology Co Ltd are -
Technology acceleration in Forth Industrial Revolution
– Edifier Technology Co Ltd has witnessed rapid integration of technology during Covid-19 in the Audio & Video Equipment industry. As one of the leading players in the industry, Edifier Technology Co Ltd needs to keep up with the evolution of technology in the Audio & Video Equipment 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.
Stagnating economy with rate increase
– Edifier Technology Co Ltd 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 Audio & Video Equipment industry.
Consumer confidence and its impact on Edifier Technology Co Ltd 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 Audio & Video Equipment industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Edifier Technology Co Ltd may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Audio & Video Equipment sector.
Increasing wage structure of Edifier Technology Co Ltd
– 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 Edifier Technology Co Ltd.
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.
Easy access to finance
– Easy access to finance in Audio & Video Equipment industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Edifier Technology Co Ltd can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Shortening product life cycle
– it is one of the major threat that Edifier Technology Co Ltd is facing in Audio & Video Equipment sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Edifier Technology Co Ltd 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 Audio & Video Equipment industry regulations.
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 Edifier Technology Co Ltd in the Audio & Video Equipment sector and impact the bottomline of the organization.
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. Edifier Technology Co Ltd needs to understand the core reasons impacting the Audio & Video Equipment 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 Edifier Technology Co Ltd business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Edifier Technology Co Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Edifier Technology Co Ltd 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 Edifier Technology Co Ltd 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 Edifier Technology Co Ltd 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 Edifier Technology Co Ltd 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 Edifier Technology Co Ltd needs to make to build a sustainable competitive advantage.