Based on various researches at Oak Spring University , Suzhou Tianma Specialty Chem is operating in a macro-environment that has been destablized by – wage bills are increasing, increasing commodity prices, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, increasing energy prices, challanges to central banks by blockchain based private currencies, technology disruption,
there is backlash against globalization, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Suzhou Tianma Specialty Chem
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Suzhou Tianma Specialty Chem can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Suzhou Tianma Specialty Chem, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Suzhou Tianma Specialty Chem 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 Suzhou Tianma Specialty Chem can be done for the following purposes –
1. Strategic planning of Suzhou Tianma Specialty Chem
2. Improving business portfolio management of Suzhou Tianma Specialty Chem
3. Assessing feasibility of the new initiative in China
4. Making a Chemical Manufacturing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Suzhou Tianma Specialty Chem
Strengths of Suzhou Tianma Specialty Chem | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Suzhou Tianma Specialty Chem are -
Analytics focus
– Suzhou Tianma Specialty Chem is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the Chemical Manufacturing industry. The technology infrastructure of China is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Organizational Resilience of Suzhou Tianma Specialty Chem
– The covid-19 pandemic has put organizational resilience at the centre of everthing Suzhou Tianma Specialty Chem does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Suzhou Tianma Specialty Chem is one of the leading players in the Chemical Manufacturing 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.
Diverse revenue streams
– Suzhou Tianma Specialty Chem is present in almost all the verticals within the Chemical Manufacturing industry. This has provided Suzhou Tianma Specialty Chem 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 Suzhou Tianma Specialty Chem 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 Chemical Manufacturing industry
– Suzhou Tianma Specialty Chem has clearly differentiated products in the market place. This has enabled Suzhou Tianma Specialty Chem to fetch slight price premium compare to the competitors in the Chemical Manufacturing industry. The sustainable margins have also helped Suzhou Tianma Specialty Chem to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Suzhou Tianma Specialty Chem 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.
Innovation driven organization
– Suzhou Tianma Specialty Chem is one of the most innovative firm in Chemical Manufacturing sector.
Digital Transformation in Chemical Manufacturing industry
- digital transformation varies from industry to industry. For Suzhou Tianma Specialty Chem digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Suzhou Tianma Specialty Chem 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
– Suzhou Tianma Specialty Chem has one of the best training and development program in Basic Materials 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.
Strong track record of project management in the Chemical Manufacturing industry
– Suzhou Tianma Specialty Chem is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy of Suzhou Tianma Specialty Chem comprises – understanding the underlying the factors in the Chemical Manufacturing 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.
Weaknesses of Suzhou Tianma Specialty Chem | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Suzhou Tianma Specialty Chem are -
Products dominated business model
– Even though Suzhou Tianma Specialty Chem has some of the most successful models in the Chemical Manufacturing industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Suzhou Tianma Specialty Chem should strive to include more intangible value offerings along with its core products and services.
High dependence on Suzhou Tianma Specialty Chem ‘s star products
– The top 2 products and services of Suzhou Tianma Specialty Chem still accounts for major business revenue. This dependence on star products in Chemical Manufacturing industry has resulted into insufficient focus on developing new products, even though Suzhou Tianma Specialty Chem has relatively successful track record of launching new products.
Lack of clear differentiation of Suzhou Tianma Specialty Chem products
– To increase the profitability and margins on the products, Suzhou Tianma Specialty Chem needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Suzhou Tianma Specialty Chem is slow explore the new channels of communication. These new channels of communication can help Suzhou Tianma Specialty Chem to provide better information regarding Chemical Manufacturing products and services. It can also build an online community to further reach out to potential customers.
Increasing silos among functional specialists
– The organizational structure of Suzhou Tianma Specialty Chem is dominated by functional specialists. It is not different from other players in the Chemical Manufacturing industry, but Suzhou Tianma Specialty Chem needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Suzhou Tianma Specialty Chem to focus more on services in the Chemical Manufacturing industry rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative at Suzhou Tianma Specialty Chem, in the dynamic environment of Chemical Manufacturing industry it has struggled to respond to the nimble upstart competition. Suzhou Tianma Specialty Chem has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Suzhou Tianma Specialty Chem 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 Chemical Manufacturing industry using digital technology.
Compensation and incentives
– The revenue per employee of Suzhou Tianma Specialty Chem is just above the Chemical Manufacturing 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.
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 Suzhou Tianma Specialty Chem supply chain. Even after few cautionary changes, Suzhou Tianma Specialty Chem is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Suzhou Tianma Specialty Chem vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Suzhou Tianma Specialty Chem 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.
Slow decision making process
– As mentioned earlier in the report, Suzhou Tianma Specialty Chem has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Chemical Manufacturing industry over the last five years. Suzhou Tianma Specialty Chem 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.
Suzhou Tianma Specialty Chem Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Suzhou Tianma Specialty Chem are -
Learning at scale
– Online learning technologies has now opened space for Suzhou Tianma Specialty Chem 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Suzhou Tianma Specialty Chem 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.
Developing new processes and practices
– Suzhou Tianma Specialty Chem can develop new processes and procedures in Chemical Manufacturing 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Suzhou Tianma Specialty Chem can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Suzhou Tianma Specialty Chem has opened avenues for new revenue streams for the organization in Chemical Manufacturing industry. This can help Suzhou Tianma Specialty Chem to build a more holistic ecosystem for Suzhou Tianma Specialty Chem products in the Chemical Manufacturing industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Chemical Manufacturing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Suzhou Tianma Specialty Chem 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. Suzhou Tianma Specialty Chem 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.
Loyalty marketing
– Suzhou Tianma Specialty Chem 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.
Using analytics as competitive advantage
– Suzhou Tianma Specialty Chem has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Chemical Manufacturing sector. This continuous investment in analytics has enabled Suzhou Tianma Specialty Chem to build a competitive advantage using analytics. The analytics driven competitive advantage can help Suzhou Tianma Specialty Chem to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Suzhou Tianma Specialty Chem 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 Suzhou Tianma Specialty Chem to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Suzhou Tianma Specialty Chem can use these opportunities to build new business models that can help the communities that Suzhou Tianma Specialty Chem operates in. Secondly it can use opportunities from government spending in Chemical Manufacturing sector.
Better consumer reach
– The expansion of the 5G network will help Suzhou Tianma Specialty Chem to increase its market reach. Suzhou Tianma Specialty Chem 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.
Leveraging digital technologies
– Suzhou Tianma Specialty Chem 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 Chemical Manufacturing industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Suzhou Tianma Specialty Chem in the Chemical Manufacturing industry. Now Suzhou Tianma Specialty Chem can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Suzhou Tianma Specialty Chem External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Suzhou Tianma Specialty Chem are -
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. Suzhou Tianma Specialty Chem needs to understand the core reasons impacting the Chemical Manufacturing industry. This will help it in building a better workplace.
Regulatory challenges
– Suzhou Tianma Specialty Chem 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 Chemical Manufacturing industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Chemical Manufacturing industry are lowering. It can presents Suzhou Tianma Specialty Chem with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Chemical Manufacturing 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 Suzhou Tianma Specialty Chem business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Suzhou Tianma Specialty Chem 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 Chemical Manufacturing industry.
Environmental challenges
– Suzhou Tianma Specialty Chem 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. Suzhou Tianma Specialty Chem can take advantage of this fund but it will also bring new competitors in the Chemical Manufacturing industry.
Technology acceleration in Forth Industrial Revolution
– Suzhou Tianma Specialty Chem has witnessed rapid integration of technology during Covid-19 in the Chemical Manufacturing industry. As one of the leading players in the industry, Suzhou Tianma Specialty Chem needs to keep up with the evolution of technology in the Chemical Manufacturing 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.
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 Suzhou Tianma Specialty Chem.
Shortening product life cycle
– it is one of the major threat that Suzhou Tianma Specialty Chem is facing in Chemical Manufacturing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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. Suzhou Tianma Specialty Chem 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 Suzhou Tianma Specialty Chem in Chemical Manufacturing industry. The Chemical Manufacturing 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.
Increasing wage structure of Suzhou Tianma Specialty Chem
– 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 Suzhou Tianma Specialty Chem.
Weighted SWOT Analysis of Suzhou Tianma Specialty Chem Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Suzhou Tianma Specialty Chem 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 Suzhou Tianma Specialty Chem 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 Suzhou Tianma Specialty Chem 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 Suzhou Tianma Specialty Chem 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 Suzhou Tianma Specialty Chem needs to make to build a sustainable competitive advantage.