Hainan Honz Pharmaceutical Co (300086) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Hainan Honz Pharmaceutical Co (China)

Based on various researches at Oak Spring University , Hainan Honz Pharmaceutical Co is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, increasing household debt because of falling income levels, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, geopolitical disruptions, increasing government debt because of Covid-19 spendings, increasing commodity prices, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc

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Introduction to SWOT Analysis of Hainan Honz Pharmaceutical Co

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Hainan Honz Pharmaceutical Co can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hainan Honz Pharmaceutical Co, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hainan Honz Pharmaceutical Co 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 Hainan Honz Pharmaceutical Co can be done for the following purposes –
1. Strategic planning of Hainan Honz Pharmaceutical Co
2. Improving business portfolio management of Hainan Honz Pharmaceutical Co
3. Assessing feasibility of the new initiative in China
4. Making a Major Drugs sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hainan Honz Pharmaceutical Co

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Strengths of Hainan Honz Pharmaceutical Co | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Hainan Honz Pharmaceutical Co are -

Organizational Resilience of Hainan Honz Pharmaceutical Co

– The covid-19 pandemic has put organizational resilience at the centre of everthing Hainan Honz Pharmaceutical Co 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 Major Drugs industry

– Hainan Honz Pharmaceutical Co 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

– Hainan Honz Pharmaceutical Co is one of the most innovative firm in Major Drugs sector.

High brand equity

– Hainan Honz Pharmaceutical Co has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hainan Honz Pharmaceutical Co to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Ability to recruit top talent

– Hainan Honz Pharmaceutical Co is one of the leading players in the Major 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.

Low bargaining power of suppliers

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

Digital Transformation in Major Drugs industry

- digital transformation varies from industry to industry. For Hainan Honz Pharmaceutical Co digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hainan Honz Pharmaceutical Co 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.

Analytics focus

– Hainan Honz Pharmaceutical Co 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 Major Drugs 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.

Learning organization

- Hainan Honz Pharmaceutical Co 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 Hainan Honz Pharmaceutical Co is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Hainan Honz Pharmaceutical Co emphasize – knowledge, initiative, and innovation.

Superior customer experience

– The customer experience strategy of Hainan Honz Pharmaceutical Co in Major Drugs industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Effective Research and Development (R&D)

– Hainan Honz Pharmaceutical Co has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Hainan Honz Pharmaceutical Co staying ahead in the Major Drugs industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Ability to lead change in Major Drugs

– Hainan Honz Pharmaceutical Co is one of the leading players in the Major Drugs industry in China. Over the years it has not only transformed the business landscape in the Major Drugs industry in China but also across the existing markets. The ability to lead change has enabled Hainan Honz Pharmaceutical Co in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

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Weaknesses of Hainan Honz Pharmaceutical Co | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Hainan Honz Pharmaceutical Co are -

Ability to respond to the competition

– As the decision making is very deliberative at Hainan Honz Pharmaceutical Co, in the dynamic environment of Major Drugs industry it has struggled to respond to the nimble upstart competition. Hainan Honz Pharmaceutical Co has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

High operating costs

– Compare to the competitors, Hainan Honz Pharmaceutical Co has high operating costs in the Major Drugs industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Hainan Honz Pharmaceutical Co lucrative customers.

Low market penetration in new markets

– Outside its home market of China, Hainan Honz Pharmaceutical Co needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Compensation and incentives

– The revenue per employee of Hainan Honz Pharmaceutical Co is just above the Major Drugs 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.

Slow to strategic competitive environment developments

– As Hainan Honz Pharmaceutical Co is one of the leading players in the Major Drugs industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Major Drugs industry in last five years.

High cash cycle compare to competitors

Hainan Honz Pharmaceutical Co has a high cash cycle compare to other players in the Major 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 bargaining power of channel partners in Major Drugs industry

– because of the regulatory requirements in China, Hainan Honz Pharmaceutical Co 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 Major Drugs industry.

Workers concerns about automation

– As automation is fast increasing in the Major Drugs industry, Hainan Honz Pharmaceutical Co 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.

Products dominated business model

– Even though Hainan Honz Pharmaceutical Co has some of the most successful models in the Major Drugs industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Hainan Honz Pharmaceutical Co should strive to include more intangible value offerings along with its core products and services.

Lack of clear differentiation of Hainan Honz Pharmaceutical Co products

– To increase the profitability and margins on the products, Hainan Honz Pharmaceutical Co needs to provide more differentiated products than what it is currently offering in the marketplace.

High dependence on Hainan Honz Pharmaceutical Co ‘s star products

– The top 2 products and services of Hainan Honz Pharmaceutical Co still accounts for major business revenue. This dependence on star products in Major Drugs industry has resulted into insufficient focus on developing new products, even though Hainan Honz Pharmaceutical Co has relatively successful track record of launching new products.

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Hainan Honz Pharmaceutical Co Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Hainan Honz Pharmaceutical Co are -

Building a culture of innovation

– managers at Hainan Honz Pharmaceutical Co 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 Major Drugs industry.

Low interest rates

– Even though inflation is raising its head in most developed economies, Hainan Honz Pharmaceutical Co 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.

Learning at scale

– Online learning technologies has now opened space for Hainan Honz Pharmaceutical Co 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Hainan Honz Pharmaceutical Co 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 Hainan Honz Pharmaceutical Co 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, Hainan Honz Pharmaceutical Co can use these opportunities to build new business models that can help the communities that Hainan Honz Pharmaceutical Co operates in. Secondly it can use opportunities from government spending in Major Drugs sector.

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

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Hainan Honz Pharmaceutical Co in the Major Drugs industry. Now Hainan Honz Pharmaceutical Co can target international markets with far fewer capital restrictions requirements than the existing system.

Reconfiguring business model

– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Hainan Honz Pharmaceutical Co 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.

Using analytics as competitive advantage

– Hainan Honz Pharmaceutical Co has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Major Drugs sector. This continuous investment in analytics has enabled Hainan Honz Pharmaceutical Co to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hainan Honz Pharmaceutical Co to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Developing new processes and practices

– Hainan Honz Pharmaceutical Co can develop new processes and procedures in Major 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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hainan Honz Pharmaceutical Co 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 Hainan Honz Pharmaceutical Co to hire the very best people irrespective of their geographical location.

Buying journey improvements

– Hainan Honz Pharmaceutical Co can improve the customer journey of consumers in the Major Drugs 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.

Leveraging digital technologies

– Hainan Honz Pharmaceutical Co 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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Major Drugs industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Hainan Honz Pharmaceutical Co 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. Hainan Honz Pharmaceutical Co 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 Hainan Honz Pharmaceutical Co External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Hainan Honz Pharmaceutical Co are -

Stagnating economy with rate increase

– Hainan Honz Pharmaceutical Co 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 Major Drugs industry.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Major Drugs industry are lowering. It can presents Hainan Honz Pharmaceutical Co with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Major Drugs 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. Hainan Honz Pharmaceutical Co will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.

High dependence on third party suppliers

– Hainan Honz Pharmaceutical Co high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.

Increasing wage structure of Hainan Honz Pharmaceutical Co

– 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 Hainan Honz Pharmaceutical Co.

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 Hainan Honz Pharmaceutical Co in the Major Drugs sector and impact the bottomline of the organization.

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. Hainan Honz Pharmaceutical Co needs to understand the core reasons impacting the Major Drugs industry. This will help it in building a better workplace.

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 Hainan Honz Pharmaceutical Co business can come under increasing regulations regarding data privacy, data security, etc.

Consumer confidence and its impact on Hainan Honz Pharmaceutical Co 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 Major Drugs industry and other sectors.

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 Hainan Honz Pharmaceutical Co.

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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Hainan Honz Pharmaceutical Co may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Major Drugs sector.

Technology acceleration in Forth Industrial Revolution

– Hainan Honz Pharmaceutical Co has witnessed rapid integration of technology during Covid-19 in the Major Drugs industry. As one of the leading players in the industry, Hainan Honz Pharmaceutical Co needs to keep up with the evolution of technology in the Major 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.

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Weighted SWOT Analysis of Hainan Honz Pharmaceutical Co Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Hainan Honz Pharmaceutical Co 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 Hainan Honz Pharmaceutical Co 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 Hainan Honz Pharmaceutical Co 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 Hainan Honz Pharmaceutical Co 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 Hainan Honz Pharmaceutical Co needs to make to build a sustainable competitive advantage.

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