Zhenjiang Dongfang Electric Heat (300217) SWOT Analysis / TOWS Matrix / MBA Resources
Appliance & Tool
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Zhenjiang Dongfang Electric Heat (China)
Based on various researches at Oak Spring University , Zhenjiang Dongfang Electric Heat is operating in a macro-environment that has been destablized by – banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies,
competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Zhenjiang Dongfang Electric Heat
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Zhenjiang Dongfang Electric Heat can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Zhenjiang Dongfang Electric Heat, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Zhenjiang Dongfang Electric Heat 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 Zhenjiang Dongfang Electric Heat can be done for the following purposes –
1. Strategic planning of Zhenjiang Dongfang Electric Heat
2. Improving business portfolio management of Zhenjiang Dongfang Electric Heat
3. Assessing feasibility of the new initiative in China
4. Making a Appliance & Tool sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Zhenjiang Dongfang Electric Heat
Strengths of Zhenjiang Dongfang Electric Heat | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Zhenjiang Dongfang Electric Heat are -
Digital Transformation in Appliance & Tool industry
- digital transformation varies from industry to industry. For Zhenjiang Dongfang Electric Heat digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Zhenjiang Dongfang Electric Heat 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 Zhenjiang Dongfang Electric Heat in the Consumer Cyclical sector have low bargaining power. Zhenjiang Dongfang Electric Heat has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Zhenjiang Dongfang Electric Heat to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Zhenjiang Dongfang Electric Heat has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Zhenjiang Dongfang Electric Heat staying ahead in the Appliance & Tool industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Zhenjiang Dongfang Electric Heat 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.
Training and development
– Zhenjiang Dongfang Electric Heat 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.
Strong track record of project management in the Appliance & Tool industry
– Zhenjiang Dongfang Electric Heat 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
– Zhenjiang Dongfang Electric Heat has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Zhenjiang Dongfang Electric Heat 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.
Ability to lead change in Appliance & Tool
– Zhenjiang Dongfang Electric Heat is one of the leading players in the Appliance & Tool industry in China. Over the years it has not only transformed the business landscape in the Appliance & Tool industry in China but also across the existing markets. The ability to lead change has enabled Zhenjiang Dongfang Electric Heat in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Zhenjiang Dongfang Electric Heat has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Zhenjiang Dongfang Electric Heat to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Zhenjiang Dongfang Electric Heat is one of the leading players in the Appliance & Tool 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.
Innovation driven organization
– Zhenjiang Dongfang Electric Heat is one of the most innovative firm in Appliance & Tool sector.
Sustainable margins compare to other players in Appliance & Tool industry
– Zhenjiang Dongfang Electric Heat has clearly differentiated products in the market place. This has enabled Zhenjiang Dongfang Electric Heat to fetch slight price premium compare to the competitors in the Appliance & Tool industry. The sustainable margins have also helped Zhenjiang Dongfang Electric Heat to invest into research and development (R&D) and innovation.
Weaknesses of Zhenjiang Dongfang Electric Heat | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Zhenjiang Dongfang Electric Heat are -
Skills based hiring in Appliance & Tool industry
– The stress on hiring functional specialists at Zhenjiang Dongfang Electric Heat 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.
Low market penetration in new markets
– Outside its home market of China, Zhenjiang Dongfang Electric Heat needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Zhenjiang Dongfang Electric Heat is dominated by functional specialists. It is not different from other players in the Appliance & Tool industry, but Zhenjiang Dongfang Electric Heat needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Zhenjiang Dongfang Electric Heat to focus more on services in the Appliance & Tool industry rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Zhenjiang Dongfang Electric Heat 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.
Products dominated business model
– Even though Zhenjiang Dongfang Electric Heat has some of the most successful models in the Appliance & Tool industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Zhenjiang Dongfang Electric Heat should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Zhenjiang Dongfang Electric Heat is slow explore the new channels of communication. These new channels of communication can help Zhenjiang Dongfang Electric Heat to provide better information regarding Appliance & Tool products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, Zhenjiang Dongfang Electric Heat 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 Appliance & Tool industry using digital technology.
Ability to respond to the competition
– As the decision making is very deliberative at Zhenjiang Dongfang Electric Heat, in the dynamic environment of Appliance & Tool industry it has struggled to respond to the nimble upstart competition. Zhenjiang Dongfang Electric Heat has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ less understanding of Zhenjiang Dongfang Electric Heat strategy
– From the outside it seems that the employees of Zhenjiang Dongfang Electric Heat 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 Appliance & Tool industry, Zhenjiang Dongfang Electric Heat 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.
Lack of clear differentiation of Zhenjiang Dongfang Electric Heat products
– To increase the profitability and margins on the products, Zhenjiang Dongfang Electric Heat needs to provide more differentiated products than what it is currently offering in the marketplace.
Zhenjiang Dongfang Electric Heat Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Zhenjiang Dongfang Electric Heat are -
Better consumer reach
– The expansion of the 5G network will help Zhenjiang Dongfang Electric Heat to increase its market reach. Zhenjiang Dongfang Electric Heat 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.
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. Zhenjiang Dongfang Electric Heat can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Appliance & Tool industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Zhenjiang Dongfang Electric Heat 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. Zhenjiang Dongfang Electric Heat 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.
Manufacturing automation
– Zhenjiang Dongfang Electric Heat can use the latest technology developments to improve its manufacturing and designing process in Appliance & Tool 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.
Loyalty marketing
– Zhenjiang Dongfang Electric Heat 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.
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 Zhenjiang Dongfang Electric Heat 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.
Developing new processes and practices
– Zhenjiang Dongfang Electric Heat can develop new processes and procedures in Appliance & Tool 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.
Leveraging digital technologies
– Zhenjiang Dongfang Electric Heat 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.
Using analytics as competitive advantage
– Zhenjiang Dongfang Electric Heat has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Appliance & Tool sector. This continuous investment in analytics has enabled Zhenjiang Dongfang Electric Heat to build a competitive advantage using analytics. The analytics driven competitive advantage can help Zhenjiang Dongfang Electric Heat to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Zhenjiang Dongfang Electric Heat 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 Zhenjiang Dongfang Electric Heat to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Zhenjiang Dongfang Electric Heat 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 Zhenjiang Dongfang Electric Heat to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Zhenjiang Dongfang Electric Heat can use these opportunities to build new business models that can help the communities that Zhenjiang Dongfang Electric Heat operates in. Secondly it can use opportunities from government spending in Appliance & Tool sector.
Learning at scale
– Online learning technologies has now opened space for Zhenjiang Dongfang Electric Heat 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.
Threats Zhenjiang Dongfang Electric Heat External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Zhenjiang Dongfang Electric Heat are -
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 Zhenjiang Dongfang Electric Heat.
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. Zhenjiang Dongfang Electric Heat 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 Zhenjiang Dongfang Electric Heat in the Appliance & Tool sector and impact the bottomline of the organization.
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, Zhenjiang Dongfang Electric Heat 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 Zhenjiang Dongfang Electric Heat prominent markets.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Zhenjiang Dongfang Electric Heat may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Appliance & Tool sector.
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 Zhenjiang Dongfang Electric Heat business can come under increasing regulations regarding data privacy, data security, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Regulatory challenges
– Zhenjiang Dongfang Electric Heat 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 Appliance & Tool industry regulations.
Environmental challenges
– Zhenjiang Dongfang Electric Heat 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. Zhenjiang Dongfang Electric Heat can take advantage of this fund but it will also bring new competitors in the Appliance & Tool industry.
Stagnating economy with rate increase
– Zhenjiang Dongfang Electric Heat 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 Appliance & Tool industry.
Increasing wage structure of Zhenjiang Dongfang Electric Heat
– 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 Zhenjiang Dongfang Electric Heat.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Zhenjiang Dongfang Electric Heat in Appliance & Tool industry. The Appliance & Tool 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.
Weighted SWOT Analysis of Zhenjiang Dongfang Electric Heat Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Zhenjiang Dongfang Electric Heat 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 Zhenjiang Dongfang Electric Heat 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 Zhenjiang Dongfang Electric Heat 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 Zhenjiang Dongfang Electric Heat 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 Zhenjiang Dongfang Electric Heat needs to make to build a sustainable competitive advantage.
