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 – competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China,
increasing commodity prices, increasing transportation and logistics costs, etc
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 -
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.
High switching costs
– The high switching costs that Guangzhou Jiacheng 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.
Training and development
– Guangzhou Jiacheng has one of the best training and development program in Transportation 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.
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.
Effective Research and Development (R&D)
– Guangzhou Jiacheng has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Guangzhou Jiacheng staying ahead in the Trucking industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Trucking
– Guangzhou Jiacheng is one of the leading players in the Trucking industry in China. Over the years it has not only transformed the business landscape in the Trucking industry in China but also across the existing markets. The ability to lead change has enabled Guangzhou Jiacheng in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Guangzhou Jiacheng is one of the leading players in the Trucking 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.
Innovation driven organization
– Guangzhou Jiacheng is one of the most innovative firm in Trucking sector.
High brand equity
– Guangzhou Jiacheng has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Guangzhou Jiacheng to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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.
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.
Weaknesses of Guangzhou Jiacheng | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Guangzhou Jiacheng are -
Ability to respond to the competition
– As the decision making is very deliberative at Guangzhou Jiacheng, in the dynamic environment of Trucking industry it has struggled to respond to the nimble upstart competition. Guangzhou Jiacheng has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Guangzhou Jiacheng is slow explore the new channels of communication. These new channels of communication can help Guangzhou Jiacheng to provide better information regarding Trucking products and services. It can also build an online community to further reach out to potential customers.
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.
Slow to strategic competitive environment developments
– As Guangzhou Jiacheng is one of the leading players in the Trucking industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Trucking industry in last five years.
Aligning sales with marketing
– From the outside it seems that Guangzhou Jiacheng needs to have more collaboration between its sales team and marketing team. Sales professionals in the Trucking industry have deep experience in developing customer relationships. Marketing department at Guangzhou Jiacheng can leverage the sales team experience to cultivate customer relationships as Guangzhou Jiacheng is planning to shift buying processes online.
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.
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.
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.
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.
Capital Spending Reduction
– Even during the low interest decade, Guangzhou Jiacheng 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 Trucking industry using digital technology.
Guangzhou Jiacheng Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Guangzhou Jiacheng are -
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.
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.
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.
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.
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.
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.
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. Guangzhou Jiacheng can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Guangzhou Jiacheng 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 Guangzhou Jiacheng to hire the very best people irrespective of their geographical location.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Trucking industry, but it has also influenced the consumer preferences. Guangzhou Jiacheng can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
Leveraging digital technologies
– Guangzhou Jiacheng 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.
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.
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.
Threats Guangzhou Jiacheng External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Guangzhou Jiacheng 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.
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.
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.
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. Guangzhou Jiacheng needs to understand the core reasons impacting the Trucking industry. This will help it in building a better workplace.
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.
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.
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.
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.
Easy access to finance
– Easy access to finance in Trucking industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Guangzhou Jiacheng can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Guangzhou Jiacheng 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. Guangzhou Jiacheng can take advantage of this fund but it will also bring new competitors in the Trucking industry.
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.
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.
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.
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.