Daheng New Epoch (600288) SWOT Analysis / TOWS Matrix / MBA Resources
Computer Services
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Daheng New Epoch (China)
Based on various researches at Oak Spring University , Daheng New Epoch is operating in a macro-environment that has been destablized by – there is backlash against globalization, increasing household debt because of falling income levels, increasing energy prices, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies,
cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Daheng New Epoch can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Daheng New Epoch, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Daheng New Epoch 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 Daheng New Epoch can be done for the following purposes –
1. Strategic planning of Daheng New Epoch
2. Improving business portfolio management of Daheng New Epoch
3. Assessing feasibility of the new initiative in China
4. Making a Computer Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Daheng New Epoch
Strengths of Daheng New Epoch | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Daheng New Epoch are -
High brand equity
– Daheng New Epoch has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Daheng New Epoch to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Daheng New Epoch in Computer Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Computer Services industry
– Daheng New Epoch has clearly differentiated products in the market place. This has enabled Daheng New Epoch to fetch slight price premium compare to the competitors in the Computer Services industry. The sustainable margins have also helped Daheng New Epoch to invest into research and development (R&D) and innovation.
Innovation driven organization
– Daheng New Epoch is one of the most innovative firm in Computer Services sector.
Effective Research and Development (R&D)
– Daheng New Epoch has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Daheng New Epoch staying ahead in the Computer Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Daheng New Epoch 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 Daheng New Epoch is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Daheng New Epoch emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Daheng New Epoch 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.
Strong track record of project management in the Computer Services industry
– Daheng New Epoch is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Daheng New Epoch in the Technology sector have low bargaining power. Daheng New Epoch has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Daheng New Epoch to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Daheng New Epoch is present in almost all the verticals within the Computer Services industry. This has provided Daheng New Epoch a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Training and development
– Daheng New Epoch 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.
High switching costs
– The high switching costs that Daheng New Epoch 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.
Weaknesses of Daheng New Epoch | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Daheng New Epoch are -
Aligning sales with marketing
– From the outside it seems that Daheng New Epoch needs to have more collaboration between its sales team and marketing team. Sales professionals in the Computer Services industry have deep experience in developing customer relationships. Marketing department at Daheng New Epoch can leverage the sales team experience to cultivate customer relationships as Daheng New Epoch is planning to shift buying processes online.
Interest costs
– Compare to the competition, Daheng New Epoch 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.
High cash cycle compare to competitors
Daheng New Epoch has a high cash cycle compare to other players in the Computer Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Products dominated business model
– Even though Daheng New Epoch has some of the most successful models in the Computer Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Daheng New Epoch should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, Daheng New Epoch has high operating costs in the Computer Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Daheng New Epoch lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Daheng New Epoch 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 Computer Services industry using digital technology.
Employees’ less understanding of Daheng New Epoch strategy
– From the outside it seems that the employees of Daheng New Epoch 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.
High dependence on Daheng New Epoch ‘s star products
– The top 2 products and services of Daheng New Epoch still accounts for major business revenue. This dependence on star products in Computer Services industry has resulted into insufficient focus on developing new products, even though Daheng New Epoch has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Daheng New Epoch is dominated by functional specialists. It is not different from other players in the Computer Services industry, but Daheng New Epoch needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Daheng New Epoch to focus more on services in the Computer Services industry rather than just following the product oriented approach.
No frontier risks strategy
– From the 10K / annual statement of Daheng New Epoch, it seems that company is thinking out the frontier risks that can impact Computer Services industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow decision making process
– As mentioned earlier in the report, Daheng New Epoch has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Computer Services industry over the last five years. Daheng New Epoch 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.
Daheng New Epoch Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Daheng New Epoch are -
Loyalty marketing
– Daheng New Epoch 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.
Manufacturing automation
– Daheng New Epoch can use the latest technology developments to improve its manufacturing and designing process in Computer Services 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Daheng New Epoch in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Computer Services industry, and it will provide faster access to the consumers.
Learning at scale
– Online learning technologies has now opened space for Daheng New Epoch 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Daheng New Epoch can use these opportunities to build new business models that can help the communities that Daheng New Epoch operates in. Secondly it can use opportunities from government spending in Computer Services sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Daheng New Epoch 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 Daheng New Epoch to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Computer Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Daheng New Epoch 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. Daheng New Epoch 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.
Use of Bitcoin and other crypto currencies for transactions in Computer Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Daheng New Epoch in the Computer Services industry. Now Daheng New Epoch can target international markets with far fewer capital restrictions requirements than the existing system.
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. Daheng New Epoch can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Computer Services industry, but it has also influenced the consumer preferences. Daheng New Epoch can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Daheng New Epoch 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 Computer Services industry.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Daheng New Epoch 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 Daheng New Epoch 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 Daheng New Epoch has opened avenues for new revenue streams for the organization in Computer Services industry. This can help Daheng New Epoch to build a more holistic ecosystem for Daheng New Epoch products in the Computer Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats Daheng New Epoch External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Daheng New Epoch are -
Consumer confidence and its impact on Daheng New Epoch 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 Computer Services industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Daheng New Epoch may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Computer Services sector.
Shortening product life cycle
– it is one of the major threat that Daheng New Epoch is facing in Computer Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Daheng New Epoch 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 Computer Services industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Daheng New Epoch 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 Daheng New Epoch prominent markets.
Increasing wage structure of Daheng New Epoch
– 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 Daheng New Epoch.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Computer Services industry are lowering. It can presents Daheng New Epoch with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Computer Services sector.
High dependence on third party suppliers
– Daheng New Epoch 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.
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.
Stagnating economy with rate increase
– Daheng New Epoch 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 Computer Services industry.
Easy access to finance
– Easy access to finance in Computer Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Daheng New Epoch can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Daheng New Epoch business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Daheng New Epoch 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. Daheng New Epoch can take advantage of this fund but it will also bring new competitors in the Computer Services industry.
Weighted SWOT Analysis of Daheng New Epoch Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Daheng New Epoch 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 Daheng New Epoch 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 Daheng New Epoch 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 Daheng New Epoch 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 Daheng New Epoch needs to make to build a sustainable competitive advantage.