SWOT Analysis / TOWS Matrix for Shanghai Wondertek Software (China)
Based on various researches at Oak Spring University , Shanghai Wondertek Software is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, increasing commodity prices,
supply chains are disrupted by pandemic , increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Shanghai Wondertek Software
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Shanghai Wondertek Software can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shanghai Wondertek Software, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shanghai Wondertek Software 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 Shanghai Wondertek Software can be done for the following purposes –
1. Strategic planning of Shanghai Wondertek Software
2. Improving business portfolio management of Shanghai Wondertek Software
3. Assessing feasibility of the new initiative in China
4. Making a Computer Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Shanghai Wondertek Software
Strengths of Shanghai Wondertek Software | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shanghai Wondertek Software are -
Ability to recruit top talent
– Shanghai Wondertek Software is one of the leading players in the Computer Services 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.
Digital Transformation in Computer Services industry
- digital transformation varies from industry to industry. For Shanghai Wondertek Software digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shanghai Wondertek Software 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.
Diverse revenue streams
– Shanghai Wondertek Software is present in almost all the verticals within the Computer Services industry. This has provided Shanghai Wondertek Software 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.
Superior customer experience
– The customer experience strategy of Shanghai Wondertek Software in Computer Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Shanghai Wondertek Software 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 Shanghai Wondertek Software is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Shanghai Wondertek Software emphasize – knowledge, initiative, and innovation.
Analytics focus
– Shanghai Wondertek Software 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 Computer Services 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.
Effective Research and Development (R&D)
– Shanghai Wondertek Software has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Shanghai Wondertek Software staying ahead in the Computer Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Shanghai Wondertek Software 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.
Highly skilled collaborators
– Shanghai Wondertek Software has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Computer Services industry. Secondly the value chain collaborators of Shanghai Wondertek Software have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Shanghai Wondertek Software has one of the best training and development program in Technology 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.
Successful track record of launching new products
– Shanghai Wondertek Software has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Shanghai Wondertek Software 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.
Sustainable margins compare to other players in Computer Services industry
– Shanghai Wondertek Software has clearly differentiated products in the market place. This has enabled Shanghai Wondertek Software to fetch slight price premium compare to the competitors in the Computer Services industry. The sustainable margins have also helped Shanghai Wondertek Software to invest into research and development (R&D) and innovation.
Weaknesses of Shanghai Wondertek Software | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shanghai Wondertek Software are -
Workers concerns about automation
– As automation is fast increasing in the Computer Services industry, Shanghai Wondertek Software 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.
No frontier risks strategy
– From the 10K / annual statement of Shanghai Wondertek Software, it seems that company is thinking out the frontier risks that can impact Computer Services 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.
High operating costs
– Compare to the competitors, Shanghai Wondertek Software has high operating costs in the Computer Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Shanghai Wondertek Software lucrative customers.
Products dominated business model
– Even though Shanghai Wondertek Software has some of the most successful models in the Computer Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Shanghai Wondertek Software should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Shanghai Wondertek Software has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Computer Services industry over the last five years. Shanghai Wondertek Software 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.
Compensation and incentives
– The revenue per employee of Shanghai Wondertek Software is just above the Computer Services 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Shanghai Wondertek Software is slow explore the new channels of communication. These new channels of communication can help Shanghai Wondertek Software to provide better information regarding Computer Services products and services. It can also build an online community to further reach out to potential customers.
Increasing silos among functional specialists
– The organizational structure of Shanghai Wondertek Software is dominated by functional specialists. It is not different from other players in the Computer Services industry, but Shanghai Wondertek Software needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Shanghai Wondertek Software to focus more on services in the Computer Services industry rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of China, Shanghai Wondertek Software needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on Shanghai Wondertek Software ‘s star products
– The top 2 products and services of Shanghai Wondertek Software still accounts for major business revenue. This dependence on star products in Computer Services industry has resulted into insufficient focus on developing new products, even though Shanghai Wondertek Software has relatively successful track record of launching new products.
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 Shanghai Wondertek Software supply chain. Even after few cautionary changes, Shanghai Wondertek Software is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Shanghai Wondertek Software vulnerable to further global disruptions in South East Asia.
Shanghai Wondertek Software Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Shanghai Wondertek Software are -
Manufacturing automation
– Shanghai Wondertek Software can use the latest technology developments to improve its manufacturing and designing process in Computer Services 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.
Leveraging digital technologies
– Shanghai Wondertek Software 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.
Better consumer reach
– The expansion of the 5G network will help Shanghai Wondertek Software to increase its market reach. Shanghai Wondertek Software 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Shanghai Wondertek Software 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 Shanghai Wondertek Software to hire the very best people irrespective of their geographical location.
Use of Bitcoin and other crypto currencies for transactions in Computer Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Shanghai Wondertek Software in the Computer Services industry. Now Shanghai Wondertek Software can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Shanghai Wondertek Software is facing challenges because of the dominance of functional experts in the organization. Shanghai Wondertek Software can utilize new technology in the field of Computer Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Computer Services industry, but it has also influenced the consumer preferences. Shanghai Wondertek Software can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Shanghai Wondertek Software 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Shanghai Wondertek Software can use these opportunities to build new business models that can help the communities that Shanghai Wondertek Software operates in. Secondly it can use opportunities from government spending in Computer Services sector.
Developing new processes and practices
– Shanghai Wondertek Software can develop new processes and procedures in Computer Services 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 Shanghai Wondertek Software 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 Shanghai Wondertek Software 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 Computer Services industry.
Buying journey improvements
– Shanghai Wondertek Software can improve the customer journey of consumers in the Computer Services 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.
Threats Shanghai Wondertek Software External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Shanghai Wondertek Software are -
Increasing wage structure of Shanghai Wondertek Software
– 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 Shanghai Wondertek Software.
Consumer confidence and its impact on Shanghai Wondertek Software 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 Computer Services industry and other sectors.
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 Shanghai Wondertek Software.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Computer Services industry are lowering. It can presents Shanghai Wondertek Software with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Computer Services sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Shanghai Wondertek Software may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Computer Services sector.
Shortening product life cycle
– it is one of the major threat that Shanghai Wondertek Software is facing in Computer Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Shanghai Wondertek Software 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 Computer Services industry regulations.
Stagnating economy with rate increase
– Shanghai Wondertek Software 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 Computer Services industry.
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 Shanghai Wondertek Software business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Shanghai Wondertek Software 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.
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.
Environmental challenges
– Shanghai Wondertek Software 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. Shanghai Wondertek Software can take advantage of this fund but it will also bring new competitors in the Computer Services industry.
Weighted SWOT Analysis of Shanghai Wondertek Software Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Shanghai Wondertek Software 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 Shanghai Wondertek Software 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 Shanghai Wondertek Software 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 Shanghai Wondertek Software 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 Shanghai Wondertek Software needs to make to build a sustainable competitive advantage.