Shanghai Shenqi Pharm A (600613) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Shanghai Shenqi Pharm A (China)

Based on various researches at Oak Spring University , Shanghai Shenqi Pharm A is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, wage bills are increasing, technology disruption, increasing transportation and logistics costs, increasing household debt because of falling income levels, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, etc

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Introduction to SWOT Analysis of Shanghai Shenqi Pharm A

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Shanghai Shenqi Pharm A can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shanghai Shenqi Pharm A, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shanghai Shenqi Pharm A operates in.

According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Shanghai Shenqi Pharm A can be done for the following purposes –
1. Strategic planning of Shanghai Shenqi Pharm A
2. Improving business portfolio management of Shanghai Shenqi Pharm A
3. Assessing feasibility of the new initiative in China
4. Making a Biotechnology & Drugs sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Shanghai Shenqi Pharm A

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Strengths of Shanghai Shenqi Pharm A | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Shanghai Shenqi Pharm A are -

Ability to recruit top talent

– Shanghai Shenqi Pharm A is one of the leading players in the Biotechnology & Drugs industry in China. It is in a position to attract the best talent available in China. The firm has a robust talent identification program that helps in identifying the brightest.

High switching costs

– The high switching costs that Shanghai Shenqi Pharm 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.

Highly skilled collaborators

– Shanghai Shenqi Pharm A has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Biotechnology & Drugs industry. Secondly the value chain collaborators of Shanghai Shenqi Pharm A have helped the firm to develop new products and bring them quickly to the marketplace.

Diverse revenue streams

– Shanghai Shenqi Pharm A is present in almost all the verticals within the Biotechnology & Drugs industry. This has provided Shanghai Shenqi Pharm 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.

Low bargaining power of suppliers

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

Effective Research and Development (R&D)

– Shanghai Shenqi Pharm A has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Shanghai Shenqi Pharm A staying ahead in the Biotechnology & Drugs industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Organizational Resilience of Shanghai Shenqi Pharm A

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

Strong track record of project management in the Biotechnology & Drugs industry

– Shanghai Shenqi Pharm A is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Innovation driven organization

– Shanghai Shenqi Pharm A is one of the most innovative firm in Biotechnology & Drugs sector.

Sustainable margins compare to other players in Biotechnology & Drugs industry

– Shanghai Shenqi Pharm A has clearly differentiated products in the market place. This has enabled Shanghai Shenqi Pharm A to fetch slight price premium compare to the competitors in the Biotechnology & Drugs industry. The sustainable margins have also helped Shanghai Shenqi Pharm A to invest into research and development (R&D) and innovation.

Training and development

– Shanghai Shenqi Pharm A has one of the best training and development program in Healthcare 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.

Digital Transformation in Biotechnology & Drugs industry

- digital transformation varies from industry to industry. For Shanghai Shenqi Pharm A digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shanghai Shenqi Pharm A 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.

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Weaknesses of Shanghai Shenqi Pharm A | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Shanghai Shenqi Pharm A are -

Employees’ less understanding of Shanghai Shenqi Pharm A strategy

– From the outside it seems that the employees of Shanghai Shenqi Pharm A 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 operating costs

– Compare to the competitors, Shanghai Shenqi Pharm A has high operating costs in the Biotechnology & Drugs industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Shanghai Shenqi Pharm A lucrative customers.

Slow decision making process

– As mentioned earlier in the report, Shanghai Shenqi Pharm 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 Biotechnology & Drugs industry over the last five years. Shanghai Shenqi Pharm 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 bargaining power of channel partners in Biotechnology & Drugs industry

– because of the regulatory requirements in China, Shanghai Shenqi Pharm A 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 Biotechnology & Drugs industry.

Interest costs

– Compare to the competition, Shanghai Shenqi Pharm A has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.

Skills based hiring in Biotechnology & Drugs industry

– The stress on hiring functional specialists at Shanghai Shenqi Pharm 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.

High cash cycle compare to competitors

Shanghai Shenqi Pharm A has a high cash cycle compare to other players in the Biotechnology & Drugs industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

High dependence on Shanghai Shenqi Pharm A ‘s star products

– The top 2 products and services of Shanghai Shenqi Pharm A still accounts for major business revenue. This dependence on star products in Biotechnology & Drugs industry has resulted into insufficient focus on developing new products, even though Shanghai Shenqi Pharm A has relatively successful track record of launching new products.

Ability to respond to the competition

– As the decision making is very deliberative at Shanghai Shenqi Pharm A, in the dynamic environment of Biotechnology & Drugs industry it has struggled to respond to the nimble upstart competition. Shanghai Shenqi Pharm A 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, Shanghai Shenqi Pharm 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 Biotechnology & Drugs industry using digital technology.

Aligning sales with marketing

– From the outside it seems that Shanghai Shenqi Pharm A needs to have more collaboration between its sales team and marketing team. Sales professionals in the Biotechnology & Drugs industry have deep experience in developing customer relationships. Marketing department at Shanghai Shenqi Pharm A can leverage the sales team experience to cultivate customer relationships as Shanghai Shenqi Pharm A is planning to shift buying processes online.

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Shanghai Shenqi Pharm A Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Shanghai Shenqi Pharm A are -

Low interest rates

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

Building a culture of innovation

– managers at Shanghai Shenqi Pharm 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 Biotechnology & Drugs industry.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Shanghai Shenqi Pharm A can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Learning at scale

– Online learning technologies has now opened space for Shanghai Shenqi Pharm 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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Shanghai Shenqi Pharm A to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Shanghai Shenqi Pharm A to hire the very best people irrespective of their geographical location.

Redefining models of collaboration and team work

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

Developing new processes and practices

– Shanghai Shenqi Pharm A can develop new processes and procedures in Biotechnology & Drugs 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Shanghai Shenqi Pharm A in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Biotechnology & Drugs industry, and it will provide faster access to the consumers.

Use of Bitcoin and other crypto currencies for transactions in Biotechnology & Drugs industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Shanghai Shenqi Pharm A in the Biotechnology & Drugs industry. Now Shanghai Shenqi Pharm A can target international markets with far fewer capital restrictions requirements than the existing system.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Shanghai Shenqi Pharm 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 Shanghai Shenqi Pharm 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.

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. Shanghai Shenqi Pharm A can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Loyalty marketing

– Shanghai Shenqi Pharm A has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Biotechnology & Drugs industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Shanghai Shenqi Pharm A can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Shanghai Shenqi Pharm A can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.

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Threats Shanghai Shenqi Pharm A External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Shanghai Shenqi Pharm A are -

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Shanghai Shenqi Pharm A in Biotechnology & Drugs industry. The Biotechnology & Drugs 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.

High dependence on third party suppliers

– Shanghai Shenqi Pharm 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.

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. Shanghai Shenqi Pharm A needs to understand the core reasons impacting the Biotechnology & Drugs industry. This will help it in building a better workplace.

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. Shanghai Shenqi Pharm 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.

Stagnating economy with rate increase

– Shanghai Shenqi Pharm 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 Biotechnology & Drugs industry.

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.

Easy access to finance

– Easy access to finance in Biotechnology & Drugs industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Shanghai Shenqi Pharm A can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Regulatory challenges

– Shanghai Shenqi Pharm A needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Biotechnology & Drugs industry regulations.

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 Shanghai Shenqi Pharm A.

Technology acceleration in Forth Industrial Revolution

– Shanghai Shenqi Pharm A has witnessed rapid integration of technology during Covid-19 in the Biotechnology & Drugs industry. As one of the leading players in the industry, Shanghai Shenqi Pharm A needs to keep up with the evolution of technology in the Biotechnology & Drugs 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.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Biotechnology & Drugs industry are lowering. It can presents Shanghai Shenqi Pharm A with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Biotechnology & Drugs sector.

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.

Consumer confidence and its impact on Shanghai Shenqi Pharm 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 Biotechnology & Drugs industry and other sectors.

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Weighted SWOT Analysis of Shanghai Shenqi Pharm A Template, Example

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

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