Chengdu IT Academy Sciences (300678) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Chengdu IT Academy Sciences (China)

Based on various researches at Oak Spring University , Chengdu IT Academy Sciences is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, etc

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Introduction to SWOT Analysis of Chengdu IT Academy Sciences

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

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

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Chengdu IT Academy Sciences can be done for the following purposes –
1. Strategic planning of Chengdu IT Academy Sciences
2. Improving business portfolio management of Chengdu IT Academy Sciences
3. Assessing feasibility of the new initiative in China
4. Making a Software & Programming sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Chengdu IT Academy Sciences

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Strengths of Chengdu IT Academy Sciences | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Chengdu IT Academy Sciences are -

Sustainable margins compare to other players in Software & Programming industry

– Chengdu IT Academy Sciences has clearly differentiated products in the market place. This has enabled Chengdu IT Academy Sciences to fetch slight price premium compare to the competitors in the Software & Programming industry. The sustainable margins have also helped Chengdu IT Academy Sciences to invest into research and development (R&D) and innovation.

Digital Transformation in Software & Programming industry

- digital transformation varies from industry to industry. For Chengdu IT Academy Sciences digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Chengdu IT Academy Sciences 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

- Chengdu IT Academy Sciences 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 Chengdu IT Academy Sciences is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Chengdu IT Academy Sciences emphasize – knowledge, initiative, and innovation.

Successful track record of launching new products

– Chengdu IT Academy Sciences has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Chengdu IT Academy Sciences 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.

Operational resilience

– The operational resilience strategy of Chengdu IT Academy Sciences comprises – understanding the underlying the factors in the Software & Programming industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.

Innovation driven organization

– Chengdu IT Academy Sciences is one of the most innovative firm in Software & Programming sector.

Low bargaining power of suppliers

– Suppliers of Chengdu IT Academy Sciences in the Technology sector have low bargaining power. Chengdu IT Academy Sciences has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Chengdu IT Academy Sciences to manage not only supply disruptions but also source products at highly competitive prices.

Ability to lead change in Software & Programming

– Chengdu IT Academy Sciences is one of the leading players in the Software & Programming industry in China. Over the years it has not only transformed the business landscape in the Software & Programming industry in China but also across the existing markets. The ability to lead change has enabled Chengdu IT Academy Sciences in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Training and development

– Chengdu IT Academy Sciences has one of the best training and development program in Technology 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.

Effective Research and Development (R&D)

– Chengdu IT Academy Sciences has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Chengdu IT Academy Sciences staying ahead in the Software & Programming industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Superior customer experience

– The customer experience strategy of Chengdu IT Academy Sciences in Software & Programming industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Ability to recruit top talent

– Chengdu IT Academy Sciences is one of the leading players in the Software & Programming 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.

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Weaknesses of Chengdu IT Academy Sciences | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Chengdu IT Academy Sciences are -

Slow to strategic competitive environment developments

– As Chengdu IT Academy Sciences is one of the leading players in the Software & Programming industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Software & Programming industry in last five years.

High cash cycle compare to competitors

Chengdu IT Academy Sciences has a high cash cycle compare to other players in the Software & Programming industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Lack of clear differentiation of Chengdu IT Academy Sciences products

– To increase the profitability and margins on the products, Chengdu IT Academy Sciences needs to provide more differentiated products than what it is currently offering in the marketplace.

Employees’ less understanding of Chengdu IT Academy Sciences strategy

– From the outside it seems that the employees of Chengdu IT Academy Sciences 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.

Workers concerns about automation

– As automation is fast increasing in the Software & Programming industry, Chengdu IT Academy Sciences 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.

Compensation and incentives

– The revenue per employee of Chengdu IT Academy Sciences is just above the Software & Programming 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.

Slow decision making process

– As mentioned earlier in the report, Chengdu IT Academy Sciences has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Software & Programming industry over the last five years. Chengdu IT Academy Sciences 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.

Products dominated business model

– Even though Chengdu IT Academy Sciences has some of the most successful models in the Software & Programming industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Chengdu IT Academy Sciences should strive to include more intangible value offerings along with its core products and services.

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

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Chengdu IT Academy Sciences is slow explore the new channels of communication. These new channels of communication can help Chengdu IT Academy Sciences to provide better information regarding Software & Programming products and services. It can also build an online community to further reach out to potential customers.

Skills based hiring in Software & Programming industry

– The stress on hiring functional specialists at Chengdu IT Academy Sciences 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.

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Chengdu IT Academy Sciences Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Chengdu IT Academy Sciences are -

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Chengdu IT Academy Sciences 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 Chengdu IT Academy Sciences to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Creating value in data economy

– The success of analytics program of Chengdu IT Academy Sciences has opened avenues for new revenue streams for the organization in Software & Programming industry. This can help Chengdu IT Academy Sciences to build a more holistic ecosystem for Chengdu IT Academy Sciences products in the Software & Programming industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Chengdu IT Academy Sciences 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 Chengdu IT Academy Sciences 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 Chengdu IT Academy Sciences can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Chengdu IT Academy Sciences is facing challenges because of the dominance of functional experts in the organization. Chengdu IT Academy Sciences can utilize new technology in the field of Software & Programming industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Chengdu IT Academy Sciences can use these opportunities to build new business models that can help the communities that Chengdu IT Academy Sciences operates in. Secondly it can use opportunities from government spending in Software & Programming sector.

Better consumer reach

– The expansion of the 5G network will help Chengdu IT Academy Sciences to increase its market reach. Chengdu IT Academy Sciences 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.

Learning at scale

– Online learning technologies has now opened space for Chengdu IT Academy Sciences 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.

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. Chengdu IT Academy Sciences can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Use of Bitcoin and other crypto currencies for transactions in Software & Programming industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Chengdu IT Academy Sciences in the Software & Programming industry. Now Chengdu IT Academy Sciences can target international markets with far fewer capital restrictions requirements than the existing system.

Building a culture of innovation

– managers at Chengdu IT Academy Sciences 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 Software & Programming industry.

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 Chengdu IT Academy Sciences 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.

Buying journey improvements

– Chengdu IT Academy Sciences can improve the customer journey of consumers in the Software & Programming 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.

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Threats Chengdu IT Academy Sciences External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Chengdu IT Academy Sciences are -

Shortening product life cycle

– it is one of the major threat that Chengdu IT Academy Sciences is facing in Software & Programming sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Chengdu IT Academy Sciences may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Software & Programming sector.

Increasing wage structure of Chengdu IT Academy Sciences

– 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 Chengdu IT Academy Sciences.

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 Chengdu IT Academy Sciences in the Software & Programming sector and impact the bottomline of the organization.

Stagnating economy with rate increase

– Chengdu IT Academy Sciences 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 Software & Programming industry.

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 Chengdu IT Academy Sciences.

High dependence on third party suppliers

– Chengdu IT Academy Sciences 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.

Easy access to finance

– Easy access to finance in Software & Programming industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Chengdu IT Academy Sciences can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Chengdu IT Academy Sciences 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 Chengdu IT Academy Sciences prominent markets.

Environmental challenges

– Chengdu IT Academy Sciences 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. Chengdu IT Academy Sciences can take advantage of this fund but it will also bring new competitors in the Software & Programming industry.

Technology acceleration in Forth Industrial Revolution

– Chengdu IT Academy Sciences has witnessed rapid integration of technology during Covid-19 in the Software & Programming industry. As one of the leading players in the industry, Chengdu IT Academy Sciences needs to keep up with the evolution of technology in the Software & Programming 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.

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.

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Weighted SWOT Analysis of Chengdu IT Academy Sciences Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Chengdu IT Academy Sciences 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 Chengdu IT Academy Sciences 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 Chengdu IT Academy Sciences 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 Chengdu IT Academy Sciences 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 Chengdu IT Academy Sciences needs to make to build a sustainable competitive advantage.

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