Yunnan Xiyi Ind A (2265) SWOT Analysis / TOWS Matrix / MBA Resources
Auto & Truck Parts
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Yunnan Xiyi Ind A (China)
Based on various researches at Oak Spring University , Yunnan Xiyi Ind A is operating in a macro-environment that has been destablized by – increasing energy prices, wage bills are increasing, technology disruption, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%,
increasing commodity prices, there is backlash against globalization, etc
Introduction to SWOT Analysis of Yunnan Xiyi Ind A
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Yunnan Xiyi Ind A can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Yunnan Xiyi Ind A, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Yunnan Xiyi Ind 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.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Yunnan Xiyi Ind A can be done for the following purposes –
1. Strategic planning of Yunnan Xiyi Ind A
2. Improving business portfolio management of Yunnan Xiyi Ind A
3. Assessing feasibility of the new initiative in China
4. Making a Auto & Truck Parts sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Yunnan Xiyi Ind A
Strengths of Yunnan Xiyi Ind A | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Yunnan Xiyi Ind A are -
Operational resilience
– The operational resilience strategy of Yunnan Xiyi Ind A comprises – understanding the underlying the factors in the Auto & Truck Parts 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 Yunnan Xiyi Ind A
– The covid-19 pandemic has put organizational resilience at the centre of everthing Yunnan Xiyi Ind A does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Yunnan Xiyi Ind A is present in almost all the verticals within the Auto & Truck Parts industry. This has provided Yunnan Xiyi Ind 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.
High switching costs
– The high switching costs that Yunnan Xiyi Ind 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.
Ability to lead change in Auto & Truck Parts
– Yunnan Xiyi Ind A is one of the leading players in the Auto & Truck Parts industry in China. Over the years it has not only transformed the business landscape in the Auto & Truck Parts industry in China but also across the existing markets. The ability to lead change has enabled Yunnan Xiyi Ind A in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Yunnan Xiyi Ind 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.
Effective Research and Development (R&D)
– Yunnan Xiyi Ind A has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Yunnan Xiyi Ind A staying ahead in the Auto & Truck Parts industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Yunnan Xiyi Ind A has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Auto & Truck Parts industry. Secondly the value chain collaborators of Yunnan Xiyi Ind A have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Yunnan Xiyi Ind A is one of the most innovative firm in Auto & Truck Parts sector.
Ability to recruit top talent
– Yunnan Xiyi Ind A is one of the leading players in the Auto & Truck Parts 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.
Learning organization
- Yunnan Xiyi Ind A 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 Yunnan Xiyi Ind A is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Yunnan Xiyi Ind A emphasize – knowledge, initiative, and innovation.
High brand equity
– Yunnan Xiyi Ind A has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Yunnan Xiyi Ind A to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of Yunnan Xiyi Ind A | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Yunnan Xiyi Ind A are -
Capital Spending Reduction
– Even during the low interest decade, Yunnan Xiyi Ind 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 Auto & Truck Parts industry using digital technology.
Aligning sales with marketing
– From the outside it seems that Yunnan Xiyi Ind A needs to have more collaboration between its sales team and marketing team. Sales professionals in the Auto & Truck Parts industry have deep experience in developing customer relationships. Marketing department at Yunnan Xiyi Ind A can leverage the sales team experience to cultivate customer relationships as Yunnan Xiyi Ind A is planning to shift buying processes online.
High cash cycle compare to competitors
Yunnan Xiyi Ind A has a high cash cycle compare to other players in the Auto & Truck Parts 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, Yunnan Xiyi Ind A is slow explore the new channels of communication. These new channels of communication can help Yunnan Xiyi Ind A to provide better information regarding Auto & Truck Parts products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring in Auto & Truck Parts industry
– The stress on hiring functional specialists at Yunnan Xiyi Ind A has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Slow decision making process
– As mentioned earlier in the report, Yunnan Xiyi Ind A 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 Parts industry over the last five years. Yunnan Xiyi Ind A 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.
High dependence on Yunnan Xiyi Ind A ‘s star products
– The top 2 products and services of Yunnan Xiyi Ind A still accounts for major business revenue. This dependence on star products in Auto & Truck Parts industry has resulted into insufficient focus on developing new products, even though Yunnan Xiyi Ind A has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, Yunnan Xiyi Ind A has high operating costs in the Auto & Truck Parts industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Yunnan Xiyi Ind A lucrative customers.
Slow to strategic competitive environment developments
– As Yunnan Xiyi Ind A is one of the leading players in the Auto & Truck Parts industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Auto & Truck Parts 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 Yunnan Xiyi Ind A supply chain. Even after few cautionary changes, Yunnan Xiyi Ind A is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Yunnan Xiyi Ind A vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative at Yunnan Xiyi Ind A, in the dynamic environment of Auto & Truck Parts industry it has struggled to respond to the nimble upstart competition. Yunnan Xiyi Ind A has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Yunnan Xiyi Ind A Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Yunnan Xiyi Ind A are -
Developing new processes and practices
– Yunnan Xiyi Ind A can develop new processes and procedures in Auto & Truck Parts 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Yunnan Xiyi Ind A 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 Yunnan Xiyi Ind A to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Yunnan Xiyi Ind 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 Auto & Truck Parts industry.
Better consumer reach
– The expansion of the 5G network will help Yunnan Xiyi Ind A to increase its market reach. Yunnan Xiyi Ind 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.
Learning at scale
– Online learning technologies has now opened space for Yunnan Xiyi Ind A 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Yunnan Xiyi Ind A can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Yunnan Xiyi Ind A 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.
Use of Bitcoin and other crypto currencies for transactions in Auto & Truck Parts industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Yunnan Xiyi Ind A in the Auto & Truck Parts industry. Now Yunnan Xiyi Ind A can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Yunnan Xiyi Ind A is facing challenges because of the dominance of functional experts in the organization. Yunnan Xiyi Ind A can utilize new technology in the field of Auto & Truck Parts industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Yunnan Xiyi Ind A can use these opportunities to build new business models that can help the communities that Yunnan Xiyi Ind A operates in. Secondly it can use opportunities from government spending in Auto & Truck Parts sector.
Creating value in data economy
– The success of analytics program of Yunnan Xiyi Ind A has opened avenues for new revenue streams for the organization in Auto & Truck Parts industry. This can help Yunnan Xiyi Ind A to build a more holistic ecosystem for Yunnan Xiyi Ind A products in the Auto & Truck Parts industry by providing – data insight services, data privacy related products, data based consulting services, etc.
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. Yunnan Xiyi Ind A 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 Auto & Truck Parts industry, but it has also influenced the consumer preferences. Yunnan Xiyi Ind A can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Yunnan Xiyi Ind A External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Yunnan Xiyi Ind A are -
High dependence on third party suppliers
– Yunnan Xiyi Ind 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Yunnan Xiyi Ind A in Auto & Truck Parts industry. The Auto & Truck Parts 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Auto & Truck Parts industry are lowering. It can presents Yunnan Xiyi Ind A with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Auto & Truck Parts sector.
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. Yunnan Xiyi Ind 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.
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 Yunnan Xiyi Ind A in the Auto & Truck Parts sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Yunnan Xiyi Ind A 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 Parts industry.
Increasing wage structure of Yunnan Xiyi Ind 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 Yunnan Xiyi Ind A.
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. Yunnan Xiyi Ind A needs to understand the core reasons impacting the Auto & Truck Parts industry. This will help it in building a better workplace.
Consumer confidence and its impact on Yunnan Xiyi Ind 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 Auto & Truck Parts industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Yunnan Xiyi Ind 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 Auto & Truck Parts sector.
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.
Technology acceleration in Forth Industrial Revolution
– Yunnan Xiyi Ind A has witnessed rapid integration of technology during Covid-19 in the Auto & Truck Parts industry. As one of the leading players in the industry, Yunnan Xiyi Ind A needs to keep up with the evolution of technology in the Auto & Truck Parts 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.
Shortening product life cycle
– it is one of the major threat that Yunnan Xiyi Ind A is facing in Auto & Truck Parts sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Yunnan Xiyi Ind A Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Yunnan Xiyi Ind 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 Yunnan Xiyi Ind 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 Yunnan Xiyi Ind 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 Yunnan Xiyi Ind 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 Yunnan Xiyi Ind A needs to make to build a sustainable competitive advantage.