SWOT Analysis / TOWS Matrix for Newcapec Electronics (China)
Based on various researches at Oak Spring University , Newcapec Electronics is operating in a macro-environment that has been destablized by – increasing energy prices, there is increasing trade war between United States & China, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, there is backlash against globalization, challanges to central banks by blockchain based private currencies,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Newcapec Electronics
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Newcapec Electronics can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Newcapec Electronics, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Newcapec Electronics 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 Newcapec Electronics can be done for the following purposes –
1. Strategic planning of Newcapec Electronics
2. Improving business portfolio management of Newcapec Electronics
3. Assessing feasibility of the new initiative in China
4. Making a Computer Peripherals sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Newcapec Electronics
Strengths of Newcapec Electronics | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Newcapec Electronics are -
Strong track record of project management in the Computer Peripherals industry
– Newcapec Electronics is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Newcapec Electronics 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.
Highly skilled collaborators
– Newcapec Electronics has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Computer Peripherals industry. Secondly the value chain collaborators of Newcapec Electronics have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Newcapec Electronics has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Newcapec Electronics staying ahead in the Computer Peripherals industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Newcapec Electronics
– The covid-19 pandemic has put organizational resilience at the centre of everthing Newcapec Electronics does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Newcapec Electronics is one of the most innovative firm in Computer Peripherals sector.
Sustainable margins compare to other players in Computer Peripherals industry
– Newcapec Electronics has clearly differentiated products in the market place. This has enabled Newcapec Electronics to fetch slight price premium compare to the competitors in the Computer Peripherals industry. The sustainable margins have also helped Newcapec Electronics to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Newcapec Electronics is one of the leading players in the Computer Peripherals 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.
Digital Transformation in Computer Peripherals industry
- digital transformation varies from industry to industry. For Newcapec Electronics digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Newcapec Electronics 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.
Training and development
– Newcapec Electronics 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.
Operational resilience
– The operational resilience strategy of Newcapec Electronics comprises – understanding the underlying the factors in the Computer Peripherals 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.
Learning organization
- Newcapec Electronics 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 Newcapec Electronics is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Newcapec Electronics emphasize – knowledge, initiative, and innovation.
Weaknesses of Newcapec Electronics | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Newcapec Electronics are -
Workers concerns about automation
– As automation is fast increasing in the Computer Peripherals industry, Newcapec Electronics needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Compensation and incentives
– The revenue per employee of Newcapec Electronics is just above the Computer Peripherals 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.
Aligning sales with marketing
– From the outside it seems that Newcapec Electronics needs to have more collaboration between its sales team and marketing team. Sales professionals in the Computer Peripherals industry have deep experience in developing customer relationships. Marketing department at Newcapec Electronics can leverage the sales team experience to cultivate customer relationships as Newcapec Electronics is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Newcapec Electronics is slow explore the new channels of communication. These new channels of communication can help Newcapec Electronics to provide better information regarding Computer Peripherals products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Newcapec Electronics has some of the most successful models in the Computer Peripherals industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Newcapec Electronics 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 Newcapec Electronics, in the dynamic environment of Computer Peripherals industry it has struggled to respond to the nimble upstart competition. Newcapec Electronics 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 Computer Peripherals industry
– because of the regulatory requirements in China, Newcapec Electronics 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 Computer Peripherals industry.
High dependence on Newcapec Electronics ‘s star products
– The top 2 products and services of Newcapec Electronics still accounts for major business revenue. This dependence on star products in Computer Peripherals industry has resulted into insufficient focus on developing new products, even though Newcapec Electronics has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, Newcapec Electronics has high operating costs in the Computer Peripherals industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Newcapec Electronics lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Newcapec Electronics 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 Peripherals industry over the last five years. Newcapec Electronics 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.
Capital Spending Reduction
– Even during the low interest decade, Newcapec Electronics 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 Peripherals industry using digital technology.
Newcapec Electronics Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Newcapec Electronics are -
Using analytics as competitive advantage
– Newcapec Electronics has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Computer Peripherals sector. This continuous investment in analytics has enabled Newcapec Electronics to build a competitive advantage using analytics. The analytics driven competitive advantage can help Newcapec Electronics to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Use of Bitcoin and other crypto currencies for transactions in Computer Peripherals industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Newcapec Electronics in the Computer Peripherals industry. Now Newcapec Electronics can target international markets with far fewer capital restrictions requirements than the existing system.
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 Newcapec Electronics 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.
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. Newcapec Electronics can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Newcapec Electronics 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Newcapec Electronics 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 Newcapec Electronics to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Newcapec Electronics has opened avenues for new revenue streams for the organization in Computer Peripherals industry. This can help Newcapec Electronics to build a more holistic ecosystem for Newcapec Electronics products in the Computer Peripherals industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Newcapec Electronics 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Newcapec Electronics 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 Newcapec Electronics to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Newcapec Electronics is facing challenges because of the dominance of functional experts in the organization. Newcapec Electronics can utilize new technology in the field of Computer Peripherals industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Newcapec Electronics can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Newcapec Electronics to increase its market reach. Newcapec Electronics 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.
Developing new processes and practices
– Newcapec Electronics can develop new processes and procedures in Computer Peripherals 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.
Threats Newcapec Electronics External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Newcapec Electronics are -
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. Newcapec Electronics 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.
High dependence on third party suppliers
– Newcapec Electronics 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.
Increasing wage structure of Newcapec Electronics
– 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 Newcapec Electronics.
Stagnating economy with rate increase
– Newcapec Electronics 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 Peripherals industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Newcapec Electronics 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 Newcapec Electronics prominent markets.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Newcapec Electronics in Computer Peripherals industry. The Computer Peripherals 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 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.
Regulatory challenges
– Newcapec Electronics 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 Peripherals industry regulations.
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. Newcapec Electronics needs to understand the core reasons impacting the Computer Peripherals industry. This will help it in building a better workplace.
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 Newcapec Electronics.
Technology acceleration in Forth Industrial Revolution
– Newcapec Electronics has witnessed rapid integration of technology during Covid-19 in the Computer Peripherals industry. As one of the leading players in the industry, Newcapec Electronics needs to keep up with the evolution of technology in the Computer Peripherals 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.
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 Newcapec Electronics in the Computer Peripherals sector and impact the bottomline of the organization.
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.
Weighted SWOT Analysis of Newcapec Electronics Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Newcapec Electronics 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 Newcapec Electronics 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 Newcapec Electronics 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 Newcapec Electronics 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 Newcapec Electronics needs to make to build a sustainable competitive advantage.