Rainbow Heavy A (2483) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Rainbow Heavy A (China)

Based on various researches at Oak Spring University , Rainbow Heavy A is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, technology disruption, central banks are concerned over increasing inflation, increasing transportation and logistics costs, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, etc

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Introduction to SWOT Analysis of Rainbow Heavy A

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Rainbow Heavy A can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Rainbow Heavy A, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Rainbow Heavy A 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Rainbow Heavy A can be done for the following purposes –
1. Strategic planning of Rainbow Heavy A
2. Improving business portfolio management of Rainbow Heavy A
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 Rainbow Heavy A

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Strengths of Rainbow Heavy A | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Rainbow Heavy A are -

Successful track record of launching new products

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

Analytics focus

– Rainbow Heavy A 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.

Learning organization

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

Highly skilled collaborators

– Rainbow Heavy A 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 Rainbow Heavy A have helped the firm to develop new products and bring them quickly to the marketplace.

Sustainable margins compare to other players in Misc. Capital Goods industry

– Rainbow Heavy A has clearly differentiated products in the market place. This has enabled Rainbow Heavy A to fetch slight price premium compare to the competitors in the Misc. Capital Goods industry. The sustainable margins have also helped Rainbow Heavy A to invest into research and development (R&D) and innovation.

Training and development

– Rainbow Heavy A 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.

Strong track record of project management in the Misc. Capital Goods industry

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

Low bargaining power of suppliers

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

Cross disciplinary teams

– Horizontal connected teams at the Rainbow Heavy A 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.

Digital Transformation in Misc. Capital Goods industry

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

Operational resilience

– The operational resilience strategy of Rainbow Heavy A comprises – understanding the underlying the factors in the Misc. Capital Goods 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.

Innovation driven organization

– Rainbow Heavy A is one of the most innovative firm in Misc. Capital Goods sector.

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Weaknesses of Rainbow Heavy A | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Rainbow Heavy A are -

High bargaining power of channel partners in Misc. Capital Goods industry

– because of the regulatory requirements in China, Rainbow Heavy A 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 Misc. Capital Goods industry.

Compensation and incentives

– The revenue per employee of Rainbow Heavy A 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.

Interest costs

– Compare to the competition, Rainbow Heavy A 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 cash cycle compare to competitors

Rainbow Heavy A has a high cash cycle compare to other players in the Misc. Capital Goods industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Workers concerns about automation

– As automation is fast increasing in the Misc. Capital Goods industry, Rainbow Heavy A 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 strategic competitive environment developments

– As Rainbow Heavy A is one of the leading players in the Misc. Capital Goods industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Misc. Capital Goods industry in last five years.

High dependence on Rainbow Heavy A ‘s star products

– The top 2 products and services of Rainbow Heavy A 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 Rainbow Heavy A has relatively successful track record of launching new products.

Low market penetration in new markets

– Outside its home market of China, Rainbow Heavy A 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 Rainbow Heavy A 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.

Slow decision making process

– As mentioned earlier in the report, Rainbow Heavy A has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Misc. Capital Goods industry over the last five years. Rainbow Heavy A 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.

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

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Rainbow Heavy A Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Rainbow Heavy A are -

Using analytics as competitive advantage

– Rainbow Heavy A 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 Rainbow Heavy A to build a competitive advantage using analytics. The analytics driven competitive advantage can help Rainbow Heavy A to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Increase in government spending

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

Creating value in data economy

– The success of analytics program of Rainbow Heavy A has opened avenues for new revenue streams for the organization in Misc. Capital Goods industry. This can help Rainbow Heavy A to build a more holistic ecosystem for Rainbow Heavy A products in the Misc. Capital Goods 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. Rainbow Heavy A 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 Rainbow Heavy A 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 Rainbow Heavy A to hire the very best people irrespective of their geographical location.

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 Rainbow Heavy A 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.

Loyalty marketing

– Rainbow Heavy A 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, Rainbow Heavy A is facing challenges because of the dominance of functional experts in the organization. Rainbow Heavy A can utilize new technology in the field of Misc. Capital Goods 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 Rainbow Heavy A 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 Rainbow Heavy A 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.

Developing new processes and practices

– Rainbow Heavy A 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.

Better consumer reach

– The expansion of the 5G network will help Rainbow Heavy A to increase its market reach. Rainbow Heavy A 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Rainbow Heavy A 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 Rainbow Heavy A to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

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Threats Rainbow Heavy A External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Rainbow Heavy A are -

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.

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 Rainbow Heavy A in the Misc. Capital Goods sector and impact the bottomline of the organization.

High dependence on third party suppliers

– Rainbow Heavy A 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.

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 Rainbow Heavy A 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. Rainbow Heavy A needs to understand the core reasons impacting the Misc. Capital Goods industry. This will help it in building a better workplace.

Shortening product life cycle

– it is one of the major threat that Rainbow Heavy A is facing in Misc. Capital Goods sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Misc. Capital Goods industry are lowering. It can presents Rainbow Heavy A with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Misc. Capital Goods sector.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Rainbow Heavy A 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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Rainbow Heavy A 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.

Technology acceleration in Forth Industrial Revolution

– Rainbow Heavy A has witnessed rapid integration of technology during Covid-19 in the Misc. Capital Goods industry. As one of the leading players in the industry, Rainbow Heavy A 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

– Rainbow Heavy A 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.

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.

Environmental challenges

– Rainbow Heavy A 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. Rainbow Heavy A can take advantage of this fund but it will also bring new competitors in the Misc. Capital Goods industry.

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Weighted SWOT Analysis of Rainbow Heavy A Template, Example

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

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