Shenzhen Zhongheng Huafa B (200020) SWOT Analysis / TOWS Matrix / MBA Resources
Electronic Instr. & Controls
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Shenzhen Zhongheng Huafa B (China)
Based on various researches at Oak Spring University , Shenzhen Zhongheng Huafa B is operating in a macro-environment that has been destablized by – talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, technology disruption, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, there is increasing trade war between United States & China,
supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Shenzhen Zhongheng Huafa B
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Shenzhen Zhongheng Huafa B can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shenzhen Zhongheng Huafa B, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shenzhen Zhongheng Huafa B 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 Zhongheng Huafa B can be done for the following purposes –
1. Strategic planning of Shenzhen Zhongheng Huafa B
2. Improving business portfolio management of Shenzhen Zhongheng Huafa B
3. Assessing feasibility of the new initiative in China
4. Making a Electronic Instr. & Controls sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Shenzhen Zhongheng Huafa B
Strengths of Shenzhen Zhongheng Huafa B | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shenzhen Zhongheng Huafa B are -
Innovation driven organization
– Shenzhen Zhongheng Huafa B is one of the most innovative firm in Electronic Instr. & Controls sector.
Cross disciplinary teams
– Horizontal connected teams at the Shenzhen Zhongheng Huafa B 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 Electronic Instr. & Controls industry
- digital transformation varies from industry to industry. For Shenzhen Zhongheng Huafa B digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shenzhen Zhongheng Huafa B 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.
Successful track record of launching new products
– Shenzhen Zhongheng Huafa B has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Shenzhen Zhongheng Huafa B 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.
Strong track record of project management in the Electronic Instr. & Controls industry
– Shenzhen Zhongheng Huafa B is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Shenzhen Zhongheng Huafa B 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 Electronic Instr. & Controls 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 Zhongheng Huafa B in Electronic Instr. & Controls industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Shenzhen Zhongheng Huafa B is present in almost all the verticals within the Electronic Instr. & Controls industry. This has provided Shenzhen Zhongheng Huafa B 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 brand equity
– Shenzhen Zhongheng Huafa B has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Shenzhen Zhongheng Huafa B to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Shenzhen Zhongheng Huafa B 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
– Shenzhen Zhongheng Huafa B has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Electronic Instr. & Controls industry. Secondly the value chain collaborators of Shenzhen Zhongheng Huafa B have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Shenzhen Zhongheng Huafa B in the Technology sector have low bargaining power. Shenzhen Zhongheng Huafa B has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shenzhen Zhongheng Huafa B to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses of Shenzhen Zhongheng Huafa B | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shenzhen Zhongheng Huafa B are -
Slow decision making process
– As mentioned earlier in the report, Shenzhen Zhongheng Huafa B has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Electronic Instr. & Controls industry over the last five years. Shenzhen Zhongheng Huafa B 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 Shenzhen Zhongheng Huafa B supply chain. Even after few cautionary changes, Shenzhen Zhongheng Huafa B is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Shenzhen Zhongheng Huafa B vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of China, Shenzhen Zhongheng Huafa B needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners in Electronic Instr. & Controls industry
– because of the regulatory requirements in China, Shenzhen Zhongheng Huafa B 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 Electronic Instr. & Controls industry.
No frontier risks strategy
– From the 10K / annual statement of Shenzhen Zhongheng Huafa B, it seems that company is thinking out the frontier risks that can impact Electronic Instr. & Controls 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.
Need for greater diversity
– Shenzhen Zhongheng Huafa B 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.
Lack of clear differentiation of Shenzhen Zhongheng Huafa B products
– To increase the profitability and margins on the products, Shenzhen Zhongheng Huafa B needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring in Electronic Instr. & Controls industry
– The stress on hiring functional specialists at Shenzhen Zhongheng Huafa B 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.
Employees’ less understanding of Shenzhen Zhongheng Huafa B strategy
– From the outside it seems that the employees of Shenzhen Zhongheng Huafa B don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Ability to respond to the competition
– As the decision making is very deliberative at Shenzhen Zhongheng Huafa B, in the dynamic environment of Electronic Instr. & Controls industry it has struggled to respond to the nimble upstart competition. Shenzhen Zhongheng Huafa B has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– From the outside it seems that Shenzhen Zhongheng Huafa B needs to have more collaboration between its sales team and marketing team. Sales professionals in the Electronic Instr. & Controls industry have deep experience in developing customer relationships. Marketing department at Shenzhen Zhongheng Huafa B can leverage the sales team experience to cultivate customer relationships as Shenzhen Zhongheng Huafa B is planning to shift buying processes online.
Shenzhen Zhongheng Huafa B Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Shenzhen Zhongheng Huafa B are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Shenzhen Zhongheng Huafa B 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 Zhongheng Huafa B to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Use of Bitcoin and other crypto currencies for transactions in Electronic Instr. & Controls industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Shenzhen Zhongheng Huafa B in the Electronic Instr. & Controls industry. Now Shenzhen Zhongheng Huafa B can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Shenzhen Zhongheng Huafa B in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Electronic Instr. & Controls industry, and it will provide faster access to the consumers.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Shenzhen Zhongheng Huafa B 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 Shenzhen Zhongheng Huafa B to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Electronic Instr. & Controls industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Shenzhen Zhongheng Huafa B 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 Zhongheng Huafa B 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Shenzhen Zhongheng Huafa B 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.
Building a culture of innovation
– managers at Shenzhen Zhongheng Huafa B 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 Electronic Instr. & Controls industry.
Buying journey improvements
– Shenzhen Zhongheng Huafa B can improve the customer journey of consumers in the Electronic Instr. & Controls 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.
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 Zhongheng Huafa B can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Shenzhen Zhongheng Huafa B 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Shenzhen Zhongheng Huafa B can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Electronic Instr. & Controls industry, but it has also influenced the consumer preferences. Shenzhen Zhongheng Huafa B can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Shenzhen Zhongheng Huafa B can use these opportunities to build new business models that can help the communities that Shenzhen Zhongheng Huafa B operates in. Secondly it can use opportunities from government spending in Electronic Instr. & Controls sector.
Threats Shenzhen Zhongheng Huafa B External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Shenzhen Zhongheng Huafa B 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.
Easy access to finance
– Easy access to finance in Electronic Instr. & Controls industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Shenzhen Zhongheng Huafa B can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Shenzhen Zhongheng Huafa B has witnessed rapid integration of technology during Covid-19 in the Electronic Instr. & Controls industry. As one of the leading players in the industry, Shenzhen Zhongheng Huafa B needs to keep up with the evolution of technology in the Electronic Instr. & Controls 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.
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 Shenzhen Zhongheng Huafa B.
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 Zhongheng Huafa B needs to understand the core reasons impacting the Electronic Instr. & Controls industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Shenzhen Zhongheng Huafa B is facing in Electronic Instr. & Controls sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Shenzhen Zhongheng Huafa B 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.
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. Shenzhen Zhongheng Huafa B 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Electronic Instr. & Controls industry are lowering. It can presents Shenzhen Zhongheng Huafa B with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Electronic Instr. & Controls sector.
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 Shenzhen Zhongheng Huafa B business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Shenzhen Zhongheng Huafa B 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 Electronic Instr. & Controls industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Shenzhen Zhongheng Huafa B may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Electronic Instr. & Controls sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Shenzhen Zhongheng Huafa B in Electronic Instr. & Controls industry. The Electronic Instr. & Controls 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 Zhongheng Huafa B Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Shenzhen Zhongheng Huafa B 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 Zhongheng Huafa B 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 Zhongheng Huafa B 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 Zhongheng Huafa B 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 Zhongheng Huafa B needs to make to build a sustainable competitive advantage.
