Qifeng Material A (2521) SWOT Analysis / TOWS Matrix / MBA Resources
Paper & Paper Products
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Qifeng Material A (China)
Based on various researches at Oak Spring University , Qifeng Material A is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, there is backlash against globalization, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, geopolitical disruptions,
customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Qifeng Material A
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Qifeng Material A can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Qifeng Material A, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Qifeng Material 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 Qifeng Material A can be done for the following purposes –
1. Strategic planning of Qifeng Material A
2. Improving business portfolio management of Qifeng Material A
3. Assessing feasibility of the new initiative in China
4. Making a Paper & Paper Products sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Qifeng Material A
Strengths of Qifeng Material A | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Qifeng Material A are -
High brand equity
– Qifeng Material A has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Qifeng Material A to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Qifeng Material A
– The covid-19 pandemic has put organizational resilience at the centre of everthing Qifeng Material A does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Paper & Paper Products
– Qifeng Material A is one of the leading players in the Paper & Paper Products industry in China. Over the years it has not only transformed the business landscape in the Paper & Paper Products industry in China but also across the existing markets. The ability to lead change has enabled Qifeng Material A in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Qifeng Material A is one of the leading players in the Paper & Paper Products 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 Qifeng Material A in the Basic Materials sector have low bargaining power. Qifeng Material A has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Qifeng Material A to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Qifeng Material A in Paper & Paper Products industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Qifeng Material A 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 Paper & Paper Products 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.
Operational resilience
– The operational resilience strategy of Qifeng Material A comprises – understanding the underlying the factors in the Paper & Paper Products industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Diverse revenue streams
– Qifeng Material A is present in almost all the verticals within the Paper & Paper Products industry. This has provided Qifeng Material 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.
Learning organization
- Qifeng Material 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 Qifeng Material A is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Qifeng Material A emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Paper & Paper Products industry
– Qifeng Material A has clearly differentiated products in the market place. This has enabled Qifeng Material A to fetch slight price premium compare to the competitors in the Paper & Paper Products industry. The sustainable margins have also helped Qifeng Material A to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Qifeng Material 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.
Weaknesses of Qifeng Material A | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Qifeng Material A are -
Slow decision making process
– As mentioned earlier in the report, Qifeng Material 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 Paper & Paper Products industry over the last five years. Qifeng Material 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.
No frontier risks strategy
– From the 10K / annual statement of Qifeng Material A, it seems that company is thinking out the frontier risks that can impact Paper & Paper Products industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Ability to respond to the competition
– As the decision making is very deliberative at Qifeng Material A, in the dynamic environment of Paper & Paper Products industry it has struggled to respond to the nimble upstart competition. Qifeng Material A has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring in Paper & Paper Products industry
– The stress on hiring functional specialists at Qifeng Material 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 to strategic competitive environment developments
– As Qifeng Material A is one of the leading players in the Paper & Paper Products industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Paper & Paper Products 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 Qifeng Material A supply chain. Even after few cautionary changes, Qifeng Material A is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Qifeng Material A vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of China, Qifeng Material A needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Qifeng Material A has a high cash cycle compare to other players in the Paper & Paper Products industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Products dominated business model
– Even though Qifeng Material A has some of the most successful models in the Paper & Paper Products industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Qifeng Material A should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– From the outside it seems that Qifeng Material A needs to have more collaboration between its sales team and marketing team. Sales professionals in the Paper & Paper Products industry have deep experience in developing customer relationships. Marketing department at Qifeng Material A can leverage the sales team experience to cultivate customer relationships as Qifeng Material A is planning to shift buying processes online.
Need for greater diversity
– Qifeng Material A 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.
Qifeng Material A Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Qifeng Material A are -
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Paper & Paper Products industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Qifeng Material 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. Qifeng Material 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.
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 Qifeng Material A 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.
Loyalty marketing
– Qifeng Material 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Qifeng Material A is facing challenges because of the dominance of functional experts in the organization. Qifeng Material A can utilize new technology in the field of Paper & Paper Products industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Qifeng Material A can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Qifeng Material 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 Paper & Paper Products industry, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Qifeng Material A can use these opportunities to build new business models that can help the communities that Qifeng Material A operates in. Secondly it can use opportunities from government spending in Paper & Paper Products sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Qifeng Material 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 Qifeng Material 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.
Creating value in data economy
– The success of analytics program of Qifeng Material A has opened avenues for new revenue streams for the organization in Paper & Paper Products industry. This can help Qifeng Material A to build a more holistic ecosystem for Qifeng Material A products in the Paper & Paper Products industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Qifeng Material A to increase its market reach. Qifeng Material 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.
Use of Bitcoin and other crypto currencies for transactions in Paper & Paper Products industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Qifeng Material A in the Paper & Paper Products industry. Now Qifeng Material A can target international markets with far fewer capital restrictions requirements than the existing system.
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. Qifeng Material A can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Qifeng Material 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 Qifeng Material A to hire the very best people irrespective of their geographical location.
Threats Qifeng Material A External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Qifeng Material A are -
Easy access to finance
– Easy access to finance in Paper & Paper Products industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Qifeng Material A can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Qifeng Material A.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Qifeng Material 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 Paper & Paper Products sector.
High dependence on third party suppliers
– Qifeng Material 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.
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 Qifeng Material A in the Paper & Paper Products sector and impact the bottomline of the organization.
Regulatory challenges
– Qifeng Material 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 Paper & Paper Products industry regulations.
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.
Environmental challenges
– Qifeng Material A 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. Qifeng Material A can take advantage of this fund but it will also bring new competitors in the Paper & Paper Products industry.
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. Qifeng Material A needs to understand the core reasons impacting the Paper & Paper Products 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. Qifeng Material 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Qifeng Material A in Paper & Paper Products industry. The Paper & Paper Products 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 Qifeng Material 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 Qifeng Material A.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Qifeng Material A can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate Qifeng Material A prominent markets.
Weighted SWOT Analysis of Qifeng Material A Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Qifeng Material 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 Qifeng Material 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 Qifeng Material 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 Qifeng Material 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 Qifeng Material A needs to make to build a sustainable competitive advantage.