Shengtong Print A (2599) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Shengtong Print A (China)

Based on various researches at Oak Spring University , Shengtong Print A is operating in a macro-environment that has been destablized by – geopolitical disruptions, there is backlash against globalization, central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, increasing commodity prices, there is increasing trade war between United States & China, etc

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Introduction to SWOT Analysis of Shengtong Print A

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Shengtong Print A can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shengtong Print A, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shengtong Print A 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 Shengtong Print A can be done for the following purposes –
1. Strategic planning of Shengtong Print A
2. Improving business portfolio management of Shengtong Print A
3. Assessing feasibility of the new initiative in China
4. Making a Printing Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Shengtong Print A

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Strengths of Shengtong Print A | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Shengtong Print A are -

Training and development

– Shengtong Print A has one of the best training and development program in Services 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.

Ability to lead change in Printing Services

– Shengtong Print A is one of the leading players in the Printing Services industry in China. Over the years it has not only transformed the business landscape in the Printing Services industry in China but also across the existing markets. The ability to lead change has enabled Shengtong Print A in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Ability to recruit top talent

– Shengtong Print A is one of the leading players in the Printing Services 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 switching costs

– The high switching costs that Shengtong Print A 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.

Diverse revenue streams

– Shengtong Print A is present in almost all the verticals within the Printing Services industry. This has provided Shengtong Print A 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.

Cross disciplinary teams

– Horizontal connected teams at the Shengtong Print A 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.

Operational resilience

– The operational resilience strategy of Shengtong Print A comprises – understanding the underlying the factors in the Printing Services 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.

Organizational Resilience of Shengtong Print A

– The covid-19 pandemic has put organizational resilience at the centre of everthing Shengtong Print A does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Superior customer experience

– The customer experience strategy of Shengtong Print A in Printing Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Innovation driven organization

– Shengtong Print A is one of the most innovative firm in Printing Services sector.

Successful track record of launching new products

– Shengtong Print A has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Shengtong Print A 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.

Low bargaining power of suppliers

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

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Weaknesses of Shengtong Print A | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Shengtong Print A are -

Workers concerns about automation

– As automation is fast increasing in the Printing Services industry, Shengtong Print A 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.

Products dominated business model

– Even though Shengtong Print A has some of the most successful models in the Printing Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Shengtong Print A should strive to include more intangible value offerings along with its core products and services.

Ability to respond to the competition

– As the decision making is very deliberative at Shengtong Print A, in the dynamic environment of Printing Services industry it has struggled to respond to the nimble upstart competition. Shengtong Print A has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Increasing silos among functional specialists

– The organizational structure of Shengtong Print A is dominated by functional specialists. It is not different from other players in the Printing Services industry, but Shengtong Print A needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Shengtong Print A to focus more on services in the Printing Services industry rather than just following the product oriented approach.

Compensation and incentives

– The revenue per employee of Shengtong Print A is just above the Printing Services 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.

Capital Spending Reduction

– Even during the low interest decade, Shengtong Print A 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 Printing Services industry using digital technology.

Slow to strategic competitive environment developments

– As Shengtong Print A is one of the leading players in the Printing Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Printing Services industry in last five years.

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

High cash cycle compare to competitors

Shengtong Print A has a high cash cycle compare to other players in the Printing 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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Shengtong Print A is slow explore the new channels of communication. These new channels of communication can help Shengtong Print A to provide better information regarding Printing Services products and services. It can also build an online community to further reach out to potential customers.

High operating costs

– Compare to the competitors, Shengtong Print A has high operating costs in the Printing Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Shengtong Print A lucrative customers.

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Shengtong Print A Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Shengtong Print A are -

Building a culture of innovation

– managers at Shengtong Print A 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 Printing Services industry.

Creating value in data economy

– The success of analytics program of Shengtong Print A has opened avenues for new revenue streams for the organization in Printing Services industry. This can help Shengtong Print A to build a more holistic ecosystem for Shengtong Print A products in the Printing Services 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 Shengtong Print A 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 Shengtong Print A to hire the very best people irrespective of their geographical location.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Shengtong Print A is facing challenges because of the dominance of functional experts in the organization. Shengtong Print A can utilize new technology in the field of Printing Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Use of Bitcoin and other crypto currencies for transactions in Printing Services industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Shengtong Print A in the Printing Services industry. Now Shengtong Print A can target international markets with far fewer capital restrictions requirements than the existing system.

Using analytics as competitive advantage

– Shengtong Print A has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Printing Services sector. This continuous investment in analytics has enabled Shengtong Print A to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shengtong Print A to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Printing Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Shengtong Print A 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. Shengtong Print A 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Shengtong Print A can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.

Loyalty marketing

– Shengtong Print A 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

– Shengtong Print A can use the latest technology developments to improve its manufacturing and designing process in Printing 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Shengtong Print A can use these opportunities to build new business models that can help the communities that Shengtong Print A operates in. Secondly it can use opportunities from government spending in Printing Services sector.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Printing Services industry, but it has also influenced the consumer preferences. Shengtong Print A can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Better consumer reach

– The expansion of the 5G network will help Shengtong Print A to increase its market reach. Shengtong Print A 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.

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Threats Shengtong Print A External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Shengtong Print A are -

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Shengtong Print A may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Printing Services sector.

Consumer confidence and its impact on Shengtong Print A 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 Printing Services industry and other sectors.

High level of anxiety and lack of motivation

– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Shengtong Print A needs to understand the core reasons impacting the Printing Services industry. This will help it in building a better workplace.

Environmental challenges

– Shengtong Print A 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. Shengtong Print A can take advantage of this fund but it will also bring new competitors in the Printing Services industry.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Shengtong Print A 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 Shengtong Print A prominent markets.

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 Shengtong Print A in the Printing Services sector and impact the bottomline of the organization.

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 Shengtong Print A.

High dependence on third party suppliers

– Shengtong Print A 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.

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. Shengtong Print A 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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Shengtong Print A in Printing Services industry. The Printing Services 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.

Technology acceleration in Forth Industrial Revolution

– Shengtong Print A has witnessed rapid integration of technology during Covid-19 in the Printing Services industry. As one of the leading players in the industry, Shengtong Print A needs to keep up with the evolution of technology in the Printing Services 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.

Regulatory challenges

– Shengtong Print A 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 Printing Services industry regulations.

Increasing wage structure of Shengtong Print A

– 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 Shengtong Print A.

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Weighted SWOT Analysis of Shengtong Print A Template, Example

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

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