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, central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings,
there is increasing trade war between United States & China, increasing household debt because of falling income levels, 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 -
Ability to lead change in Auto & Truck Parts
– Chongqing Landai Powertrain is one of the leading players in the Auto & Truck Parts industry in China. Over the years it has not only transformed the business landscape in the Auto & Truck Parts industry in China but also across the existing markets. The ability to lead change has enabled Chongqing Landai Powertrain in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Chongqing Landai Powertrain has one of the best training and development program in Consumer Cyclical 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.
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.
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.
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.
High brand equity
– Chongqing Landai Powertrain has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Chongqing Landai Powertrain to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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.
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.
Strong track record of project management in the Auto & Truck Parts industry
– Chongqing Landai Powertrain 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
– 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.
Sustainable margins compare to other players in Auto & Truck Parts industry
– Chongqing Landai Powertrain has clearly differentiated products in the market place. This has enabled Chongqing Landai Powertrain to fetch slight price premium compare to the competitors in the Auto & Truck Parts industry. The sustainable margins have also helped Chongqing Landai Powertrain to invest into research and development (R&D) and innovation.
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 -
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.
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.
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 strategic competitive environment developments
– As Chongqing Landai Powertrain is one of the leading players in the Auto & Truck Parts industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Auto & Truck Parts industry in last five years.
High dependence on Chongqing Landai Powertrain ‘s star products
– The top 2 products and services of Chongqing Landai Powertrain still accounts for major business revenue. This dependence on star products in Auto & Truck Parts industry has resulted into insufficient focus on developing new products, even though Chongqing Landai Powertrain has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Chongqing Landai Powertrain 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.
Need for greater diversity
– Chongqing Landai Powertrain 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.
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 Chongqing Landai Powertrain supply chain. Even after few cautionary changes, Chongqing Landai Powertrain is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Chongqing Landai Powertrain vulnerable to further global disruptions in South East Asia.
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.
High bargaining power of channel partners in Auto & Truck Parts industry
– because of the regulatory requirements in China, Chongqing Landai Powertrain 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 Auto & Truck Parts industry.
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.
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 -
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.
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.
Creating value in data economy
– The success of analytics program of Chongqing Landai Powertrain has opened avenues for new revenue streams for the organization in Auto & Truck Parts industry. This can help Chongqing Landai Powertrain to build a more holistic ecosystem for Chongqing Landai Powertrain products in the Auto & Truck Parts industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Chongqing Landai Powertrain can use the latest technology developments to improve its manufacturing and designing process in Auto & Truck Parts sector. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Lowering marketing communication costs
– 5G expansion will open new opportunities for 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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Chongqing Landai Powertrain 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 Chongqing Landai Powertrain to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Chongqing Landai Powertrain 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.
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.
Buying journey improvements
– Chongqing Landai Powertrain can improve the customer journey of consumers in the Auto & Truck Parts 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.
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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Chongqing Landai Powertrain can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 -
Technology acceleration in Forth Industrial Revolution
– Chongqing Landai Powertrain has witnessed rapid integration of technology during Covid-19 in the Auto & Truck Parts industry. As one of the leading players in the industry, Chongqing Landai Powertrain needs to keep up with the evolution of technology in the Auto & Truck Parts 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.
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 Chongqing Landai Powertrain in the Auto & Truck Parts sector and impact the bottomline of the organization.
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.
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.
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 Chongqing Landai Powertrain.
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.
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.
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. Chongqing Landai Powertrain 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.
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.
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.
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.
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.
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 Chongqing Landai Powertrain business can come under increasing regulations regarding data privacy, data security, etc.
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.