SWOT Analysis / TOWS Matrix for Shenzhen Changhong Tech (China)
Based on various researches at Oak Spring University , Shenzhen Changhong Tech is operating in a macro-environment that has been destablized by – increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, increasing transportation and logistics costs, cloud computing is disrupting traditional business models,
technology disruption, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Shenzhen Changhong Tech
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Shenzhen Changhong Tech can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shenzhen Changhong Tech, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shenzhen Changhong Tech 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 Shenzhen Changhong Tech can be done for the following purposes –
1. Strategic planning of Shenzhen Changhong Tech
2. Improving business portfolio management of Shenzhen Changhong Tech
3. Assessing feasibility of the new initiative in China
4. Making a Misc. Capital Goods sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Shenzhen Changhong Tech
Strengths of Shenzhen Changhong Tech | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shenzhen Changhong Tech are -
Sustainable margins compare to other players in Misc. Capital Goods industry
– Shenzhen Changhong Tech has clearly differentiated products in the market place. This has enabled Shenzhen Changhong Tech to fetch slight price premium compare to the competitors in the Misc. Capital Goods industry. The sustainable margins have also helped Shenzhen Changhong Tech to invest into research and development (R&D) and innovation.
Organizational Resilience of Shenzhen Changhong Tech
– The covid-19 pandemic has put organizational resilience at the centre of everthing Shenzhen Changhong Tech does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Shenzhen Changhong Tech has one of the best training and development program in Capital Goods 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.
High switching costs
– The high switching costs that Shenzhen Changhong Tech 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.
Superior customer experience
– The customer experience strategy of Shenzhen Changhong Tech in Misc. Capital Goods industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Shenzhen Changhong Tech 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 Misc. Capital Goods 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.
Strong track record of project management in the Misc. Capital Goods industry
– Shenzhen Changhong Tech is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Misc. Capital Goods
– Shenzhen Changhong Tech is one of the leading players in the Misc. Capital Goods industry in China. Over the years it has not only transformed the business landscape in the Misc. Capital Goods industry in China but also across the existing markets. The ability to lead change has enabled Shenzhen Changhong Tech in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Shenzhen Changhong Tech in the Capital Goods sector have low bargaining power. Shenzhen Changhong Tech has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shenzhen Changhong Tech to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Shenzhen Changhong Tech is one of the most innovative firm in Misc. Capital Goods sector.
Successful track record of launching new products
– Shenzhen Changhong Tech has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Shenzhen Changhong Tech has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Cross disciplinary teams
– Horizontal connected teams at the Shenzhen Changhong Tech 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 Shenzhen Changhong Tech | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shenzhen Changhong Tech are -
Products dominated business model
– Even though Shenzhen Changhong Tech has some of the most successful models in the Misc. Capital Goods industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Shenzhen Changhong Tech should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of China, Shenzhen Changhong Tech needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring in Misc. Capital Goods industry
– The stress on hiring functional specialists at Shenzhen Changhong Tech 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.
Aligning sales with marketing
– From the outside it seems that Shenzhen Changhong Tech needs to have more collaboration between its sales team and marketing team. Sales professionals in the Misc. Capital Goods industry have deep experience in developing customer relationships. Marketing department at Shenzhen Changhong Tech can leverage the sales team experience to cultivate customer relationships as Shenzhen Changhong Tech is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the Misc. Capital Goods industry, Shenzhen Changhong Tech 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.
High operating costs
– Compare to the competitors, Shenzhen Changhong Tech has high operating costs in the Misc. Capital Goods industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Shenzhen Changhong Tech lucrative customers.
Compensation and incentives
– The revenue per employee of Shenzhen Changhong Tech is just above the Misc. Capital Goods 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.
Need for greater diversity
– Shenzhen Changhong Tech 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.
Capital Spending Reduction
– Even during the low interest decade, Shenzhen Changhong Tech 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 Misc. Capital Goods industry using digital technology.
Increasing silos among functional specialists
– The organizational structure of Shenzhen Changhong Tech is dominated by functional specialists. It is not different from other players in the Misc. Capital Goods industry, but Shenzhen Changhong Tech needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Shenzhen Changhong Tech to focus more on services in the Misc. Capital Goods industry rather than just following the product oriented approach.
High dependence on Shenzhen Changhong Tech ‘s star products
– The top 2 products and services of Shenzhen Changhong Tech still accounts for major business revenue. This dependence on star products in Misc. Capital Goods industry has resulted into insufficient focus on developing new products, even though Shenzhen Changhong Tech has relatively successful track record of launching new products.
Shenzhen Changhong Tech Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Shenzhen Changhong Tech are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Misc. Capital Goods industry, but it has also influenced the consumer preferences. Shenzhen Changhong Tech 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
– Shenzhen Changhong Tech 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Shenzhen Changhong Tech can use these opportunities to build new business models that can help the communities that Shenzhen Changhong Tech operates in. Secondly it can use opportunities from government spending in Misc. Capital Goods sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Shenzhen Changhong Tech 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 Shenzhen Changhong Tech to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Shenzhen Changhong Tech 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Shenzhen Changhong Tech can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Shenzhen Changhong Tech has opened avenues for new revenue streams for the organization in Misc. Capital Goods industry. This can help Shenzhen Changhong Tech to build a more holistic ecosystem for Shenzhen Changhong Tech products in the Misc. Capital Goods industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Shenzhen Changhong Tech 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.
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. Shenzhen Changhong Tech can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Shenzhen Changhong Tech can develop new processes and procedures in Misc. Capital Goods 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.
Use of Bitcoin and other crypto currencies for transactions in Misc. Capital Goods industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Shenzhen Changhong Tech in the Misc. Capital Goods industry. Now Shenzhen Changhong Tech can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Shenzhen Changhong Tech can use the latest technology developments to improve its manufacturing and designing process in Misc. Capital Goods 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.
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 Shenzhen Changhong Tech 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.
Threats Shenzhen Changhong Tech External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Shenzhen Changhong Tech 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.
Technology acceleration in Forth Industrial Revolution
– Shenzhen Changhong Tech has witnessed rapid integration of technology during Covid-19 in the Misc. Capital Goods industry. As one of the leading players in the industry, Shenzhen Changhong Tech needs to keep up with the evolution of technology in the Misc. Capital Goods 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.
Stagnating economy with rate increase
– Shenzhen Changhong Tech 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 Misc. Capital Goods industry.
Increasing wage structure of Shenzhen Changhong Tech
– 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 Shenzhen Changhong Tech.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Shenzhen Changhong Tech may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Misc. Capital Goods sector.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Shenzhen Changhong Tech business can come under increasing regulations regarding data privacy, data security, etc.
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. Shenzhen Changhong Tech needs to understand the core reasons impacting the Misc. Capital Goods industry. This will help it in building a better workplace.
Environmental challenges
– Shenzhen Changhong Tech 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. Shenzhen Changhong Tech can take advantage of this fund but it will also bring new competitors in the Misc. Capital Goods industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Shenzhen Changhong Tech 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 Shenzhen Changhong Tech prominent markets.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Shenzhen Changhong Tech in Misc. Capital Goods industry. The Misc. Capital Goods 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
– Shenzhen Changhong Tech 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.
Consumer confidence and its impact on Shenzhen Changhong Tech 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 Misc. Capital Goods industry and other sectors.
Weighted SWOT Analysis of Shenzhen Changhong Tech Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Shenzhen Changhong Tech 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 Shenzhen Changhong Tech 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 Shenzhen Changhong Tech 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 Shenzhen Changhong Tech 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 Shenzhen Changhong Tech needs to make to build a sustainable competitive advantage.
