Liaoning SG Auto (600303) SWOT Analysis / TOWS Matrix / MBA Resources
Auto & Truck Manufacturers
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Liaoning SG Auto (China)
Based on various researches at Oak Spring University , Liaoning SG Auto is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, increasing transportation and logistics costs, cloud computing is disrupting traditional business models, geopolitical disruptions, central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies,
increasing energy prices, wage bills are increasing, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Liaoning SG Auto can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Liaoning SG Auto, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Liaoning SG Auto 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 Liaoning SG Auto can be done for the following purposes –
1. Strategic planning of Liaoning SG Auto
2. Improving business portfolio management of Liaoning SG Auto
3. Assessing feasibility of the new initiative in China
4. Making a Auto & Truck Manufacturers sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Liaoning SG Auto
Strengths of Liaoning SG Auto | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Liaoning SG Auto are -
High switching costs
– The high switching costs that Liaoning SG Auto 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.
Sustainable margins compare to other players in Auto & Truck Manufacturers industry
– Liaoning SG Auto has clearly differentiated products in the market place. This has enabled Liaoning SG Auto to fetch slight price premium compare to the competitors in the Auto & Truck Manufacturers industry. The sustainable margins have also helped Liaoning SG Auto to invest into research and development (R&D) and innovation.
Organizational Resilience of Liaoning SG Auto
– The covid-19 pandemic has put organizational resilience at the centre of everthing Liaoning SG Auto does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Auto & Truck Manufacturers industry
- digital transformation varies from industry to industry. For Liaoning SG Auto digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Liaoning SG Auto 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
– Liaoning SG Auto 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.
Operational resilience
– The operational resilience strategy of Liaoning SG Auto comprises – understanding the underlying the factors in the Auto & Truck Manufacturers 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.
Diverse revenue streams
– Liaoning SG Auto is present in almost all the verticals within the Auto & Truck Manufacturers industry. This has provided Liaoning SG Auto 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.
Effective Research and Development (R&D)
– Liaoning SG Auto has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Liaoning SG Auto staying ahead in the Auto & Truck Manufacturers industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Liaoning SG Auto in the Consumer Cyclical sector have low bargaining power. Liaoning SG Auto has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Liaoning SG Auto to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Liaoning SG Auto has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Liaoning SG Auto to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Liaoning SG Auto in Auto & Truck Manufacturers industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Liaoning SG Auto is one of the most innovative firm in Auto & Truck Manufacturers sector.
Weaknesses of Liaoning SG Auto | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Liaoning SG Auto are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Liaoning SG Auto is slow explore the new channels of communication. These new channels of communication can help Liaoning SG Auto to provide better information regarding Auto & Truck Manufacturers products and services. It can also build an online community to further reach out to potential customers.
High dependence on Liaoning SG Auto ‘s star products
– The top 2 products and services of Liaoning SG Auto still accounts for major business revenue. This dependence on star products in Auto & Truck Manufacturers industry has resulted into insufficient focus on developing new products, even though Liaoning SG Auto has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Liaoning SG Auto has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Auto & Truck Manufacturers industry over the last five years. Liaoning SG Auto 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.
Increasing silos among functional specialists
– The organizational structure of Liaoning SG Auto is dominated by functional specialists. It is not different from other players in the Auto & Truck Manufacturers industry, but Liaoning SG Auto needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Liaoning SG Auto to focus more on services in the Auto & Truck Manufacturers industry rather than just following the product oriented approach.
Products dominated business model
– Even though Liaoning SG Auto has some of the most successful models in the Auto & Truck Manufacturers industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Liaoning SG Auto should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Liaoning SG Auto products
– To increase the profitability and margins on the products, Liaoning SG Auto needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ less understanding of Liaoning SG Auto strategy
– From the outside it seems that the employees of Liaoning SG Auto 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 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 Liaoning SG Auto supply chain. Even after few cautionary changes, Liaoning SG Auto is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Liaoning SG Auto vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Liaoning SG Auto has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Compensation and incentives
– The revenue per employee of Liaoning SG Auto is just above the Auto & Truck Manufacturers 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.
Workers concerns about automation
– As automation is fast increasing in the Auto & Truck Manufacturers industry, Liaoning SG Auto 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.
Liaoning SG Auto Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Liaoning SG Auto are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Liaoning SG Auto is facing challenges because of the dominance of functional experts in the organization. Liaoning SG Auto can utilize new technology in the field of Auto & Truck Manufacturers industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Buying journey improvements
– Liaoning SG Auto can improve the customer journey of consumers in the Auto & Truck Manufacturers industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
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. Liaoning SG Auto can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Manufacturing automation
– Liaoning SG Auto can use the latest technology developments to improve its manufacturing and designing process in Auto & Truck Manufacturers 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.
Use of Bitcoin and other crypto currencies for transactions in Auto & Truck Manufacturers industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Liaoning SG Auto in the Auto & Truck Manufacturers industry. Now Liaoning SG Auto can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Liaoning SG Auto 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.
Developing new processes and practices
– Liaoning SG Auto can develop new processes and procedures in Auto & Truck Manufacturers 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.
Better consumer reach
– The expansion of the 5G network will help Liaoning SG Auto to increase its market reach. Liaoning SG Auto 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.
Learning at scale
– Online learning technologies has now opened space for Liaoning SG Auto 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.
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 Liaoning SG Auto 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Liaoning SG Auto can use these opportunities to build new business models that can help the communities that Liaoning SG Auto operates in. Secondly it can use opportunities from government spending in Auto & Truck Manufacturers sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Liaoning SG Auto 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 Liaoning SG Auto to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Liaoning SG Auto has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Auto & Truck Manufacturers sector. This continuous investment in analytics has enabled Liaoning SG Auto to build a competitive advantage using analytics. The analytics driven competitive advantage can help Liaoning SG Auto to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Liaoning SG Auto External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Liaoning SG Auto are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Liaoning SG Auto 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 Liaoning SG Auto prominent markets.
Easy access to finance
– Easy access to finance in Auto & Truck Manufacturers industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Liaoning SG Auto can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Liaoning SG Auto may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Auto & Truck Manufacturers 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 Liaoning SG Auto business can come under increasing regulations regarding data privacy, data security, etc.
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. Liaoning SG Auto needs to understand the core reasons impacting the Auto & Truck Manufacturers industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Liaoning SG Auto has witnessed rapid integration of technology during Covid-19 in the Auto & Truck Manufacturers industry. As one of the leading players in the industry, Liaoning SG Auto needs to keep up with the evolution of technology in the Auto & Truck Manufacturers 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Liaoning SG Auto in Auto & Truck Manufacturers industry. The Auto & Truck Manufacturers 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.
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. Liaoning SG Auto 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.
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.
Shortening product life cycle
– it is one of the major threat that Liaoning SG Auto is facing in Auto & Truck Manufacturers sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Liaoning SG Auto 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 Auto & Truck Manufacturers industry.
Increasing wage structure of Liaoning SG Auto
– 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 Liaoning SG Auto.
Regulatory challenges
– Liaoning SG Auto 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 Auto & Truck Manufacturers industry regulations.
Weighted SWOT Analysis of Liaoning SG Auto Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Liaoning SG Auto 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 Liaoning SG Auto 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 Liaoning SG Auto 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 Liaoning SG Auto 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 Liaoning SG Auto needs to make to build a sustainable competitive advantage.