SWOT Analysis / TOWS Matrix for Hangzhou Weiguang Electronic (China)
Based on various researches at Oak Spring University , Hangzhou Weiguang Electronic is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, technology disruption, digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, increasing energy prices, central banks are concerned over increasing inflation,
supply chains are disrupted by pandemic , geopolitical disruptions, etc
Introduction to SWOT Analysis of Hangzhou Weiguang Electronic
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Hangzhou Weiguang Electronic can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hangzhou Weiguang Electronic, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hangzhou Weiguang Electronic 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 Hangzhou Weiguang Electronic can be done for the following purposes –
1. Strategic planning of Hangzhou Weiguang Electronic
2. Improving business portfolio management of Hangzhou Weiguang Electronic
3. Assessing feasibility of the new initiative in China
4. Making a Electronic Instr. & Controls sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hangzhou Weiguang Electronic
Strengths of Hangzhou Weiguang Electronic | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hangzhou Weiguang Electronic are -
Analytics focus
– Hangzhou Weiguang Electronic 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 Electronic Instr. & Controls 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.
Innovation driven organization
– Hangzhou Weiguang Electronic is one of the most innovative firm in Electronic Instr. & Controls sector.
Diverse revenue streams
– Hangzhou Weiguang Electronic is present in almost all the verticals within the Electronic Instr. & Controls industry. This has provided Hangzhou Weiguang Electronic 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.
Sustainable margins compare to other players in Electronic Instr. & Controls industry
– Hangzhou Weiguang Electronic has clearly differentiated products in the market place. This has enabled Hangzhou Weiguang Electronic to fetch slight price premium compare to the competitors in the Electronic Instr. & Controls industry. The sustainable margins have also helped Hangzhou Weiguang Electronic to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Hangzhou Weiguang Electronic is one of the leading players in the Electronic Instr. & Controls 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.
Digital Transformation in Electronic Instr. & Controls industry
- digital transformation varies from industry to industry. For Hangzhou Weiguang Electronic digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hangzhou Weiguang Electronic 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.
High brand equity
– Hangzhou Weiguang Electronic has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hangzhou Weiguang Electronic to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Hangzhou Weiguang Electronic 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 Hangzhou Weiguang Electronic is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Hangzhou Weiguang Electronic emphasize – knowledge, initiative, and innovation.
Ability to lead change in Electronic Instr. & Controls
– Hangzhou Weiguang Electronic is one of the leading players in the Electronic Instr. & Controls industry in China. Over the years it has not only transformed the business landscape in the Electronic Instr. & Controls industry in China but also across the existing markets. The ability to lead change has enabled Hangzhou Weiguang Electronic in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Hangzhou Weiguang Electronic in Electronic Instr. & Controls industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Hangzhou Weiguang Electronic in the Technology sector have low bargaining power. Hangzhou Weiguang Electronic has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hangzhou Weiguang Electronic to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy of Hangzhou Weiguang Electronic comprises – understanding the underlying the factors in the Electronic Instr. & Controls 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 Hangzhou Weiguang Electronic | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hangzhou Weiguang Electronic are -
Compensation and incentives
– The revenue per employee of Hangzhou Weiguang Electronic is just above the Electronic Instr. & Controls 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.
Capital Spending Reduction
– Even during the low interest decade, Hangzhou Weiguang Electronic 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 Electronic Instr. & Controls industry using digital technology.
Slow decision making process
– As mentioned earlier in the report, Hangzhou Weiguang Electronic has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Electronic Instr. & Controls industry over the last five years. Hangzhou Weiguang Electronic 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.
Ability to respond to the competition
– As the decision making is very deliberative at Hangzhou Weiguang Electronic, in the dynamic environment of Electronic Instr. & Controls industry it has struggled to respond to the nimble upstart competition. Hangzhou Weiguang Electronic has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Hangzhou Weiguang Electronic has a high cash cycle compare to other players in the Electronic Instr. & Controls industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Need for greater diversity
– Hangzhou Weiguang Electronic 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.
Aligning sales with marketing
– From the outside it seems that Hangzhou Weiguang Electronic needs to have more collaboration between its sales team and marketing team. Sales professionals in the Electronic Instr. & Controls industry have deep experience in developing customer relationships. Marketing department at Hangzhou Weiguang Electronic can leverage the sales team experience to cultivate customer relationships as Hangzhou Weiguang Electronic is planning to shift buying processes online.
High dependence on Hangzhou Weiguang Electronic ‘s star products
– The top 2 products and services of Hangzhou Weiguang Electronic still accounts for major business revenue. This dependence on star products in Electronic Instr. & Controls industry has resulted into insufficient focus on developing new products, even though Hangzhou Weiguang Electronic has relatively successful track record of launching new products.
Skills based hiring in Electronic Instr. & Controls industry
– The stress on hiring functional specialists at Hangzhou Weiguang Electronic 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.
Workers concerns about automation
– As automation is fast increasing in the Electronic Instr. & Controls industry, Hangzhou Weiguang Electronic 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.
Interest costs
– Compare to the competition, Hangzhou Weiguang Electronic 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.
Hangzhou Weiguang Electronic Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Hangzhou Weiguang Electronic are -
Creating value in data economy
– The success of analytics program of Hangzhou Weiguang Electronic has opened avenues for new revenue streams for the organization in Electronic Instr. & Controls industry. This can help Hangzhou Weiguang Electronic to build a more holistic ecosystem for Hangzhou Weiguang Electronic products in the Electronic Instr. & Controls industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Hangzhou Weiguang Electronic 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.
Manufacturing automation
– Hangzhou Weiguang Electronic can use the latest technology developments to improve its manufacturing and designing process in Electronic Instr. & Controls sector. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Electronic Instr. & Controls industry, but it has also influenced the consumer preferences. Hangzhou Weiguang Electronic can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Hangzhou Weiguang Electronic 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hangzhou Weiguang Electronic can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Hangzhou Weiguang Electronic 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hangzhou Weiguang Electronic 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 Hangzhou Weiguang Electronic to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Hangzhou Weiguang Electronic 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 Electronic Instr. & Controls industry.
Better consumer reach
– The expansion of the 5G network will help Hangzhou Weiguang Electronic to increase its market reach. Hangzhou Weiguang Electronic 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.
Using analytics as competitive advantage
– Hangzhou Weiguang Electronic has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Electronic Instr. & Controls sector. This continuous investment in analytics has enabled Hangzhou Weiguang Electronic to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hangzhou Weiguang Electronic to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hangzhou Weiguang Electronic is facing challenges because of the dominance of functional experts in the organization. Hangzhou Weiguang Electronic can utilize new technology in the field of Electronic Instr. & Controls industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hangzhou Weiguang Electronic 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.
Threats Hangzhou Weiguang Electronic External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Hangzhou Weiguang Electronic are -
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.
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.
Stagnating economy with rate increase
– Hangzhou Weiguang Electronic 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 Electronic Instr. & Controls industry.
Environmental challenges
– Hangzhou Weiguang Electronic 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. Hangzhou Weiguang Electronic can take advantage of this fund but it will also bring new competitors in the Electronic Instr. & Controls industry.
Technology acceleration in Forth Industrial Revolution
– Hangzhou Weiguang Electronic has witnessed rapid integration of technology during Covid-19 in the Electronic Instr. & Controls industry. As one of the leading players in the industry, Hangzhou Weiguang Electronic needs to keep up with the evolution of technology in the Electronic Instr. & Controls 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.
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. Hangzhou Weiguang Electronic 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 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. Hangzhou Weiguang Electronic needs to understand the core reasons impacting the Electronic Instr. & Controls industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Hangzhou Weiguang Electronic is facing in Electronic Instr. & Controls sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Hangzhou Weiguang Electronic.
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 Hangzhou Weiguang Electronic in the Electronic Instr. & Controls sector and impact the bottomline of the organization.
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 Hangzhou Weiguang Electronic business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Hangzhou Weiguang Electronic 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 Electronic Instr. & Controls industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hangzhou Weiguang Electronic 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 Hangzhou Weiguang Electronic prominent markets.
Weighted SWOT Analysis of Hangzhou Weiguang Electronic Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Hangzhou Weiguang Electronic 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 Hangzhou Weiguang Electronic 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 Hangzhou Weiguang Electronic 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 Hangzhou Weiguang Electronic 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 Hangzhou Weiguang Electronic needs to make to build a sustainable competitive advantage.