SWOT Analysis / TOWS Matrix for Chongqing Landai Powertrain (China)
Based on various researches at Oak Spring University , Chongqing Landai Powertrain is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing household debt because of falling income levels, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Chongqing Landai Powertrain
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Chongqing Landai Powertrain can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Chongqing Landai Powertrain, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Chongqing Landai Powertrain 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 Chongqing Landai Powertrain can be done for the following purposes –
1. Strategic planning of Chongqing Landai Powertrain
2. Improving business portfolio management of Chongqing Landai Powertrain
3. Assessing feasibility of the new initiative in China
4. Making a Auto & Truck Parts sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Chongqing Landai Powertrain
Strengths of Chongqing Landai Powertrain | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Chongqing Landai Powertrain are -
Low bargaining power of suppliers
– Suppliers of Chongqing Landai Powertrain in the Consumer Cyclical sector have low bargaining power. Chongqing Landai Powertrain has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Chongqing Landai Powertrain to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Chongqing Landai Powertrain is one of the most innovative firm in Auto & Truck Parts sector.
Learning organization
- Chongqing Landai Powertrain 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 Chongqing Landai Powertrain is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Chongqing Landai Powertrain emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Chongqing Landai Powertrain
– The covid-19 pandemic has put organizational resilience at the centre of everthing Chongqing Landai Powertrain does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Chongqing Landai Powertrain 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 Auto & Truck Parts 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.
Ability to recruit top talent
– Chongqing Landai Powertrain is one of the leading players in the Auto & Truck Parts 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.
Successful track record of launching new products
– Chongqing Landai Powertrain has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Chongqing Landai Powertrain 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.
Operational resilience
– The operational resilience strategy of Chongqing Landai Powertrain comprises – understanding the underlying the factors in the Auto & Truck Parts 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 Chongqing Landai Powertrain in Auto & Truck Parts industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Chongqing Landai Powertrain 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.
Diverse revenue streams
– Chongqing Landai Powertrain is present in almost all the verticals within the Auto & Truck Parts industry. This has provided Chongqing Landai Powertrain 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 Chongqing Landai Powertrain 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.
Weaknesses of Chongqing Landai Powertrain | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Chongqing Landai Powertrain are -
Low market penetration in new markets
– Outside its home market of China, Chongqing Landai Powertrain needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Chongqing Landai Powertrain has a high cash cycle compare to other players in the Auto & Truck Parts industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Products dominated business model
– Even though Chongqing Landai Powertrain has some of the most successful models in the Auto & Truck Parts industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Chongqing Landai Powertrain should strive to include more intangible value offerings along with its core products and services.
Skills based hiring in Auto & Truck Parts industry
– The stress on hiring functional specialists at Chongqing Landai Powertrain 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.
Compensation and incentives
– The revenue per employee of Chongqing Landai Powertrain is just above the Auto & Truck Parts 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.
Capital Spending Reduction
– Even during the low interest decade, Chongqing Landai Powertrain 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 Auto & Truck Parts industry using digital technology.
Increasing silos among functional specialists
– The organizational structure of Chongqing Landai Powertrain is dominated by functional specialists. It is not different from other players in the Auto & Truck Parts industry, but Chongqing Landai Powertrain needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Chongqing Landai Powertrain to focus more on services in the Auto & Truck Parts industry rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Chongqing Landai Powertrain is slow explore the new channels of communication. These new channels of communication can help Chongqing Landai Powertrain to provide better information regarding Auto & Truck Parts products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, Chongqing Landai Powertrain has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Auto & Truck Parts industry over the last five years. Chongqing Landai Powertrain 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.
Lack of clear differentiation of Chongqing Landai Powertrain products
– To increase the profitability and margins on the products, Chongqing Landai Powertrain needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, Chongqing Landai Powertrain has high operating costs in the Auto & Truck Parts industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Chongqing Landai Powertrain lucrative customers.
Chongqing Landai Powertrain Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Chongqing Landai Powertrain are -
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Auto & Truck Parts industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Chongqing Landai Powertrain 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. Chongqing Landai Powertrain 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.
Building a culture of innovation
– managers at Chongqing Landai Powertrain 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 Auto & Truck Parts industry.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Auto & Truck Parts industry, but it has also influenced the consumer preferences. Chongqing Landai Powertrain 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
– Chongqing Landai Powertrain has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Auto & Truck Parts sector. This continuous investment in analytics has enabled Chongqing Landai Powertrain to build a competitive advantage using analytics. The analytics driven competitive advantage can help Chongqing Landai Powertrain to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Chongqing Landai Powertrain 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.
Loyalty marketing
– Chongqing Landai Powertrain 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Chongqing Landai Powertrain can use these opportunities to build new business models that can help the communities that Chongqing Landai Powertrain operates in. Secondly it can use opportunities from government spending in Auto & Truck Parts sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Chongqing Landai Powertrain is facing challenges because of the dominance of functional experts in the organization. Chongqing Landai Powertrain can utilize new technology in the field of Auto & Truck Parts industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Chongqing Landai Powertrain in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Auto & Truck Parts industry, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Chongqing Landai Powertrain to increase its market reach. Chongqing Landai Powertrain 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.
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. Chongqing Landai Powertrain can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Chongqing Landai Powertrain 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.
Use of Bitcoin and other crypto currencies for transactions in Auto & Truck Parts industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Chongqing Landai Powertrain in the Auto & Truck Parts industry. Now Chongqing Landai Powertrain can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Chongqing Landai Powertrain External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Chongqing Landai Powertrain are -
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. Chongqing Landai Powertrain needs to understand the core reasons impacting the Auto & Truck Parts industry. This will help it in building a better workplace.
Consumer confidence and its impact on Chongqing Landai Powertrain 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 Auto & Truck Parts industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Chongqing Landai Powertrain may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Auto & Truck Parts sector.
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.
Increasing wage structure of Chongqing Landai Powertrain
– 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 Chongqing Landai Powertrain.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Chongqing Landai Powertrain in Auto & Truck Parts industry. The Auto & Truck Parts 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.
Stagnating economy with rate increase
– Chongqing Landai Powertrain 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 Auto & Truck Parts industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Auto & Truck Parts industry are lowering. It can presents Chongqing Landai Powertrain with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Auto & Truck Parts sector.
High dependence on third party suppliers
– Chongqing Landai Powertrain 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.
Environmental challenges
– Chongqing Landai Powertrain 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. Chongqing Landai Powertrain can take advantage of this fund but it will also bring new competitors in the Auto & Truck Parts industry.
Shortening product life cycle
– it is one of the major threat that Chongqing Landai Powertrain is facing in Auto & Truck Parts sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Auto & Truck Parts industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Chongqing Landai Powertrain can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Weighted SWOT Analysis of Chongqing Landai Powertrain Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Chongqing Landai Powertrain 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 Chongqing Landai Powertrain 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 Chongqing Landai Powertrain 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 Chongqing Landai Powertrain 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 Chongqing Landai Powertrain needs to make to build a sustainable competitive advantage.