SWOT Analysis / TOWS Matrix for Shenzhen Jufei Optoelectronics (China)
Based on various researches at Oak Spring University , Shenzhen Jufei Optoelectronics is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, technology disruption, wage bills are increasing,
increasing energy prices, geopolitical disruptions, etc
Introduction to SWOT Analysis of Shenzhen Jufei Optoelectronics
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Shenzhen Jufei Optoelectronics can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shenzhen Jufei Optoelectronics, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shenzhen Jufei Optoelectronics 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 Shenzhen Jufei Optoelectronics can be done for the following purposes –
1. Strategic planning of Shenzhen Jufei Optoelectronics
2. Improving business portfolio management of Shenzhen Jufei Optoelectronics
3. Assessing feasibility of the new initiative in China
4. Making a Semiconductors sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Shenzhen Jufei Optoelectronics
Strengths of Shenzhen Jufei Optoelectronics | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shenzhen Jufei Optoelectronics are -
Analytics focus
– Shenzhen Jufei Optoelectronics 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 Semiconductors 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.
Ability to recruit top talent
– Shenzhen Jufei Optoelectronics is one of the leading players in the Semiconductors 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.
High brand equity
– Shenzhen Jufei Optoelectronics has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Shenzhen Jufei Optoelectronics to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Semiconductors industry
- digital transformation varies from industry to industry. For Shenzhen Jufei Optoelectronics digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shenzhen Jufei Optoelectronics 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.
Innovation driven organization
– Shenzhen Jufei Optoelectronics is one of the most innovative firm in Semiconductors sector.
Training and development
– Shenzhen Jufei Optoelectronics 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.
Organizational Resilience of Shenzhen Jufei Optoelectronics
– The covid-19 pandemic has put organizational resilience at the centre of everthing Shenzhen Jufei Optoelectronics does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Shenzhen Jufei Optoelectronics 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.
Learning organization
- Shenzhen Jufei Optoelectronics 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 Shenzhen Jufei Optoelectronics is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Shenzhen Jufei Optoelectronics emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Shenzhen Jufei Optoelectronics has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Shenzhen Jufei Optoelectronics 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.
Sustainable margins compare to other players in Semiconductors industry
– Shenzhen Jufei Optoelectronics has clearly differentiated products in the market place. This has enabled Shenzhen Jufei Optoelectronics to fetch slight price premium compare to the competitors in the Semiconductors industry. The sustainable margins have also helped Shenzhen Jufei Optoelectronics to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Shenzhen Jufei Optoelectronics 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 Shenzhen Jufei Optoelectronics | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shenzhen Jufei Optoelectronics are -
Employees’ less understanding of Shenzhen Jufei Optoelectronics strategy
– From the outside it seems that the employees of Shenzhen Jufei Optoelectronics don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Ability to respond to the competition
– As the decision making is very deliberative at Shenzhen Jufei Optoelectronics, in the dynamic environment of Semiconductors industry it has struggled to respond to the nimble upstart competition. Shenzhen Jufei Optoelectronics has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners in Semiconductors industry
– because of the regulatory requirements in China, Shenzhen Jufei Optoelectronics 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 Semiconductors industry.
Slow to strategic competitive environment developments
– As Shenzhen Jufei Optoelectronics is one of the leading players in the Semiconductors industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Semiconductors industry in last five years.
Lack of clear differentiation of Shenzhen Jufei Optoelectronics products
– To increase the profitability and margins on the products, Shenzhen Jufei Optoelectronics needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Shenzhen Jufei Optoelectronics has a high cash cycle compare to other players in the Semiconductors industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Need for greater diversity
– Shenzhen Jufei Optoelectronics 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Shenzhen Jufei Optoelectronics is slow explore the new channels of communication. These new channels of communication can help Shenzhen Jufei Optoelectronics to provide better information regarding Semiconductors products and services. It can also build an online community to further reach out to potential customers.
High dependence on Shenzhen Jufei Optoelectronics ‘s star products
– The top 2 products and services of Shenzhen Jufei Optoelectronics still accounts for major business revenue. This dependence on star products in Semiconductors industry has resulted into insufficient focus on developing new products, even though Shenzhen Jufei Optoelectronics has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Shenzhen Jufei Optoelectronics 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 Semiconductors industry using digital technology.
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 Shenzhen Jufei Optoelectronics supply chain. Even after few cautionary changes, Shenzhen Jufei Optoelectronics is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Shenzhen Jufei Optoelectronics vulnerable to further global disruptions in South East Asia.
Shenzhen Jufei Optoelectronics Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Shenzhen Jufei Optoelectronics are -
Better consumer reach
– The expansion of the 5G network will help Shenzhen Jufei Optoelectronics to increase its market reach. Shenzhen Jufei Optoelectronics will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Use of Bitcoin and other crypto currencies for transactions in Semiconductors industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Shenzhen Jufei Optoelectronics in the Semiconductors industry. Now Shenzhen Jufei Optoelectronics can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Semiconductors industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Shenzhen Jufei Optoelectronics 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. Shenzhen Jufei Optoelectronics 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.
Leveraging digital technologies
– Shenzhen Jufei Optoelectronics 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.
Loyalty marketing
– Shenzhen Jufei Optoelectronics 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.
Developing new processes and practices
– Shenzhen Jufei Optoelectronics can develop new processes and procedures in Semiconductors 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Shenzhen Jufei Optoelectronics 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 Shenzhen Jufei Optoelectronics to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Shenzhen Jufei Optoelectronics has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Semiconductors sector. This continuous investment in analytics has enabled Shenzhen Jufei Optoelectronics to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shenzhen Jufei Optoelectronics to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Shenzhen Jufei Optoelectronics 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 Shenzhen Jufei Optoelectronics to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Shenzhen Jufei Optoelectronics 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. Shenzhen Jufei Optoelectronics can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Shenzhen Jufei Optoelectronics in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Semiconductors industry, and it will provide faster access to the consumers.
Manufacturing automation
– Shenzhen Jufei Optoelectronics can use the latest technology developments to improve its manufacturing and designing process in Semiconductors 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.
Threats Shenzhen Jufei Optoelectronics External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Shenzhen Jufei Optoelectronics are -
Environmental challenges
– Shenzhen Jufei Optoelectronics 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. Shenzhen Jufei Optoelectronics can take advantage of this fund but it will also bring new competitors in the Semiconductors industry.
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 Shenzhen Jufei Optoelectronics business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Shenzhen Jufei Optoelectronics 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 Shenzhen Jufei Optoelectronics is facing in Semiconductors sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Shenzhen Jufei Optoelectronics 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 Shenzhen Jufei Optoelectronics prominent markets.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Shenzhen Jufei Optoelectronics may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Semiconductors sector.
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 Shenzhen Jufei Optoelectronics.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Shenzhen Jufei Optoelectronics in Semiconductors industry. The Semiconductors 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.
Increasing wage structure of Shenzhen Jufei Optoelectronics
– 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 Shenzhen Jufei Optoelectronics.
Technology acceleration in Forth Industrial Revolution
– Shenzhen Jufei Optoelectronics has witnessed rapid integration of technology during Covid-19 in the Semiconductors industry. As one of the leading players in the industry, Shenzhen Jufei Optoelectronics needs to keep up with the evolution of technology in the Semiconductors sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Shenzhen Jufei Optoelectronics 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 Shenzhen Jufei Optoelectronics in the Semiconductors sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Shenzhen Jufei Optoelectronics Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Shenzhen Jufei Optoelectronics 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 Shenzhen Jufei Optoelectronics 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 Shenzhen Jufei Optoelectronics 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 Shenzhen Jufei Optoelectronics 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 Shenzhen Jufei Optoelectronics needs to make to build a sustainable competitive advantage.