Guangzhou Jiacheng (603535) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Guangzhou Jiacheng (China)

Based on various researches at Oak Spring University , Guangzhou Jiacheng is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, there is backlash against globalization, wage bills are increasing, increasing transportation and logistics costs, increasing energy prices, digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, etc

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Introduction to SWOT Analysis of Guangzhou Jiacheng

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

Strengths of Guangzhou Jiacheng | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Guangzhou Jiacheng are -

Successful track record of launching new products

– Guangzhou Jiacheng has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Guangzhou Jiacheng 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.

Learning organization

- Guangzhou Jiacheng 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 Guangzhou Jiacheng is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Guangzhou Jiacheng emphasize – knowledge, initiative, and innovation.

Organizational Resilience of Guangzhou Jiacheng

– The covid-19 pandemic has put organizational resilience at the centre of everthing Guangzhou Jiacheng does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Operational resilience

– The operational resilience strategy of Guangzhou Jiacheng comprises – understanding the underlying the factors in the Trucking 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.

Low bargaining power of suppliers

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

Innovation driven organization

– Guangzhou Jiacheng is one of the most innovative firm in Trucking sector.

Highly skilled collaborators

– Guangzhou Jiacheng has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Trucking industry. Secondly the value chain collaborators of Guangzhou Jiacheng have helped the firm to develop new products and bring them quickly to the marketplace.

Strong track record of project management in the Trucking industry

– Guangzhou Jiacheng is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Cross disciplinary teams

– Horizontal connected teams at the Guangzhou Jiacheng 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.

Superior customer experience

– The customer experience strategy of Guangzhou Jiacheng in Trucking industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Diverse revenue streams

– Guangzhou Jiacheng is present in almost all the verticals within the Trucking industry. This has provided Guangzhou Jiacheng 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.

Digital Transformation in Trucking industry

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

Weaknesses of Guangzhou Jiacheng | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Guangzhou Jiacheng are -

Low market penetration in new markets

– Outside its home market of China, Guangzhou Jiacheng needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Need for greater diversity

– Guangzhou Jiacheng 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.

High cash cycle compare to competitors

Guangzhou Jiacheng has a high cash cycle compare to other players in the Trucking industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Slow decision making process

– As mentioned earlier in the report, Guangzhou Jiacheng has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Trucking industry over the last five years. Guangzhou Jiacheng 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.

Workers concerns about automation

– As automation is fast increasing in the Trucking industry, Guangzhou Jiacheng 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 bargaining power of channel partners in Trucking industry

– because of the regulatory requirements in China, Guangzhou Jiacheng is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Trucking industry.

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 Guangzhou Jiacheng supply chain. Even after few cautionary changes, Guangzhou Jiacheng is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Guangzhou Jiacheng vulnerable to further global disruptions in South East Asia.

Interest costs

– Compare to the competition, Guangzhou Jiacheng 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.

High dependence on Guangzhou Jiacheng ‘s star products

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

Skills based hiring in Trucking industry

– The stress on hiring functional specialists at Guangzhou Jiacheng 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.

Increasing silos among functional specialists

– The organizational structure of Guangzhou Jiacheng is dominated by functional specialists. It is not different from other players in the Trucking industry, but Guangzhou Jiacheng needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Guangzhou Jiacheng to focus more on services in the Trucking industry rather than just following the product oriented approach.

Guangzhou Jiacheng Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Guangzhou Jiacheng are -

Using analytics as competitive advantage

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

Creating value in data economy

– The success of analytics program of Guangzhou Jiacheng has opened avenues for new revenue streams for the organization in Trucking industry. This can help Guangzhou Jiacheng to build a more holistic ecosystem for Guangzhou Jiacheng products in the Trucking industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Buying journey improvements

– Guangzhou Jiacheng can improve the customer journey of consumers in the Trucking industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Guangzhou Jiacheng in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Trucking industry, and it will provide faster access to the consumers.

Developing new processes and practices

– Guangzhou Jiacheng can develop new processes and procedures in Trucking 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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Trucking industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Guangzhou Jiacheng 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. Guangzhou Jiacheng 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.

Manufacturing automation

– Guangzhou Jiacheng can use the latest technology developments to improve its manufacturing and designing process in Trucking 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.

Better consumer reach

– The expansion of the 5G network will help Guangzhou Jiacheng to increase its market reach. Guangzhou Jiacheng 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Guangzhou Jiacheng is facing challenges because of the dominance of functional experts in the organization. Guangzhou Jiacheng can utilize new technology in the field of Trucking 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 Guangzhou Jiacheng can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Guangzhou Jiacheng can use these opportunities to build new business models that can help the communities that Guangzhou Jiacheng operates in. Secondly it can use opportunities from government spending in Trucking sector.

Loyalty marketing

– Guangzhou Jiacheng 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.

Learning at scale

– Online learning technologies has now opened space for Guangzhou Jiacheng 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.

Threats Guangzhou Jiacheng External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Guangzhou Jiacheng are -

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Guangzhou Jiacheng 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 Guangzhou Jiacheng prominent markets.

Stagnating economy with rate increase

– Guangzhou Jiacheng 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 Trucking industry.

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. Guangzhou Jiacheng 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.

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 Guangzhou Jiacheng in the Trucking sector and impact the bottomline of the organization.

Consumer confidence and its impact on Guangzhou Jiacheng 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 Trucking industry and other sectors.

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 Guangzhou Jiacheng business can come under increasing regulations regarding data privacy, data security, etc.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Guangzhou Jiacheng in Trucking industry. The Trucking 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.

Learning curve for new practices

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

High dependence on third party suppliers

– Guangzhou Jiacheng 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 acceleration in Forth Industrial Revolution

– Guangzhou Jiacheng has witnessed rapid integration of technology during Covid-19 in the Trucking industry. As one of the leading players in the industry, Guangzhou Jiacheng needs to keep up with the evolution of technology in the Trucking 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 Guangzhou Jiacheng

– 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 Guangzhou Jiacheng.

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 Guangzhou Jiacheng.

Regulatory challenges

– Guangzhou Jiacheng 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 Trucking industry regulations.

Weighted SWOT Analysis of Guangzhou Jiacheng Template, Example

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

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