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 household debt because of falling income levels, increasing energy prices, geopolitical disruptions, there is backlash against globalization, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, wage bills are increasing,
supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, 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 -
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.
Digital Transformation in Misc. Capital Goods industry
- digital transformation varies from industry to industry. For Shenzhen Changhong Tech digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shenzhen Changhong Tech 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.
Highly skilled collaborators
– Shenzhen Changhong Tech has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Misc. Capital Goods industry. Secondly the value chain collaborators of Shenzhen Changhong Tech have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Shenzhen Changhong Tech is one of the most innovative firm in Misc. Capital Goods sector.
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.
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.
Learning organization
- Shenzhen Changhong Tech 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 Shenzhen Changhong Tech is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Shenzhen Changhong Tech emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Shenzhen Changhong Tech is one of the leading players in the Misc. Capital Goods 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.
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.
Diverse revenue streams
– Shenzhen Changhong Tech is present in almost all the verticals within the Misc. Capital Goods industry. This has provided Shenzhen Changhong Tech 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 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.
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.
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 -
No frontier risks strategy
– From the 10K / annual statement of Shenzhen Changhong Tech, it seems that company is thinking out the frontier risks that can impact Misc. Capital Goods 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.
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.
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.
Ability to respond to the competition
– As the decision making is very deliberative at Shenzhen Changhong Tech, in the dynamic environment of Misc. Capital Goods industry it has struggled to respond to the nimble upstart competition. Shenzhen Changhong Tech has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
Interest costs
– Compare to the competition, Shenzhen Changhong Tech 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.
Lack of clear differentiation of Shenzhen Changhong Tech products
– To increase the profitability and margins on the products, Shenzhen Changhong Tech needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Shenzhen Changhong Tech is slow explore the new channels of communication. These new channels of communication can help Shenzhen Changhong Tech to provide better information regarding Misc. Capital Goods products and services. It can also build an online community to further reach out to potential customers.
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 -
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Misc. Capital Goods industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Shenzhen Changhong Tech 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. Shenzhen Changhong Tech 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.
Using analytics as competitive advantage
– Shenzhen Changhong Tech has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Misc. Capital Goods sector. This continuous investment in analytics has enabled Shenzhen Changhong Tech to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shenzhen Changhong Tech 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
– 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.
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.
Building a culture of innovation
– managers at Shenzhen Changhong Tech 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 Misc. Capital Goods industry.
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.
Leveraging digital technologies
– Shenzhen Changhong Tech 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.
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.
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.
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.
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.
Better consumer reach
– The expansion of the 5G network will help Shenzhen Changhong Tech to increase its market reach. Shenzhen Changhong Tech 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.
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.
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 -
Easy access to finance
– Easy access to finance in Misc. Capital Goods industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Shenzhen Changhong Tech can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
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.
Regulatory challenges
– Shenzhen Changhong Tech 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 Misc. Capital Goods industry regulations.
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 Shenzhen Changhong Tech in the Misc. Capital Goods sector and impact the bottomline of the organization.
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.
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.
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.
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.
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.
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.
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.
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.