SWOT Analysis / TOWS Matrix for GuangDong Topstrong (China)
Based on various researches at Oak Spring University , GuangDong Topstrong is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic ,
geopolitical disruptions, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of GuangDong Topstrong
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that GuangDong Topstrong can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the GuangDong Topstrong, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which GuangDong Topstrong 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 GuangDong Topstrong can be done for the following purposes –
1. Strategic planning of GuangDong Topstrong
2. Improving business portfolio management of GuangDong Topstrong
3. Assessing feasibility of the new initiative in China
4. Making a Furniture & Fixtures sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of GuangDong Topstrong
Strengths of GuangDong Topstrong | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of GuangDong Topstrong are -
Superior customer experience
– The customer experience strategy of GuangDong Topstrong in Furniture & Fixtures industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of GuangDong Topstrong in the Consumer Cyclical sector have low bargaining power. GuangDong Topstrong has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps GuangDong Topstrong to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that GuangDong Topstrong 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.
Cross disciplinary teams
– Horizontal connected teams at the GuangDong Topstrong 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.
Training and development
– GuangDong Topstrong 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.
Operational resilience
– The operational resilience strategy of GuangDong Topstrong comprises – understanding the underlying the factors in the Furniture & Fixtures 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.
Highly skilled collaborators
– GuangDong Topstrong has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Furniture & Fixtures industry. Secondly the value chain collaborators of GuangDong Topstrong have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Furniture & Fixtures industry
– GuangDong Topstrong has clearly differentiated products in the market place. This has enabled GuangDong Topstrong to fetch slight price premium compare to the competitors in the Furniture & Fixtures industry. The sustainable margins have also helped GuangDong Topstrong to invest into research and development (R&D) and innovation.
High brand equity
– GuangDong Topstrong has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled GuangDong Topstrong to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- GuangDong Topstrong 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 GuangDong Topstrong is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at GuangDong Topstrong emphasize – knowledge, initiative, and innovation.
Analytics focus
– GuangDong Topstrong 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 Furniture & Fixtures 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.
Digital Transformation in Furniture & Fixtures industry
- digital transformation varies from industry to industry. For GuangDong Topstrong digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. GuangDong Topstrong 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.
Weaknesses of GuangDong Topstrong | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of GuangDong Topstrong are -
Ability to respond to the competition
– As the decision making is very deliberative at GuangDong Topstrong, in the dynamic environment of Furniture & Fixtures industry it has struggled to respond to the nimble upstart competition. GuangDong Topstrong has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of China, GuangDong Topstrong needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring in Furniture & Fixtures industry
– The stress on hiring functional specialists at GuangDong Topstrong 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.
High bargaining power of channel partners in Furniture & Fixtures industry
– because of the regulatory requirements in China, GuangDong Topstrong 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 Furniture & Fixtures industry.
Interest costs
– Compare to the competition, GuangDong Topstrong 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.
Employees’ less understanding of GuangDong Topstrong strategy
– From the outside it seems that the employees of GuangDong Topstrong 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.
High operating costs
– Compare to the competitors, GuangDong Topstrong has high operating costs in the Furniture & Fixtures industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract GuangDong Topstrong lucrative customers.
Need for greater diversity
– GuangDong Topstrong 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.
Aligning sales with marketing
– From the outside it seems that GuangDong Topstrong needs to have more collaboration between its sales team and marketing team. Sales professionals in the Furniture & Fixtures industry have deep experience in developing customer relationships. Marketing department at GuangDong Topstrong can leverage the sales team experience to cultivate customer relationships as GuangDong Topstrong is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of GuangDong Topstrong is dominated by functional specialists. It is not different from other players in the Furniture & Fixtures industry, but GuangDong Topstrong needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help GuangDong Topstrong to focus more on services in the Furniture & Fixtures industry rather than just following the product oriented approach.
High dependence on GuangDong Topstrong ‘s star products
– The top 2 products and services of GuangDong Topstrong still accounts for major business revenue. This dependence on star products in Furniture & Fixtures industry has resulted into insufficient focus on developing new products, even though GuangDong Topstrong has relatively successful track record of launching new products.
GuangDong Topstrong Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of GuangDong Topstrong are -
Using analytics as competitive advantage
– GuangDong Topstrong has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Furniture & Fixtures sector. This continuous investment in analytics has enabled GuangDong Topstrong to build a competitive advantage using analytics. The analytics driven competitive advantage can help GuangDong Topstrong 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 GuangDong Topstrong has opened avenues for new revenue streams for the organization in Furniture & Fixtures industry. This can help GuangDong Topstrong to build a more holistic ecosystem for GuangDong Topstrong products in the Furniture & Fixtures industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at GuangDong Topstrong 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 Furniture & Fixtures industry.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects GuangDong Topstrong can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help GuangDong Topstrong to increase its market reach. GuangDong Topstrong 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.
Use of Bitcoin and other crypto currencies for transactions in Furniture & Fixtures industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for GuangDong Topstrong in the Furniture & Fixtures industry. Now GuangDong Topstrong can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– GuangDong Topstrong can use the latest technology developments to improve its manufacturing and designing process in Furniture & Fixtures 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
– GuangDong Topstrong 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Furniture & Fixtures industry, but it has also influenced the consumer preferences. GuangDong Topstrong 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, GuangDong Topstrong 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, GuangDong Topstrong can use these opportunities to build new business models that can help the communities that GuangDong Topstrong operates in. Secondly it can use opportunities from government spending in Furniture & Fixtures sector.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Furniture & Fixtures industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. GuangDong Topstrong 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. GuangDong Topstrong 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for GuangDong Topstrong 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 GuangDong Topstrong to hire the very best people irrespective of their geographical location.
Threats GuangDong Topstrong External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of GuangDong Topstrong 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. GuangDong Topstrong needs to understand the core reasons impacting the Furniture & Fixtures industry. This will help it in building a better workplace.
High dependence on third party suppliers
– GuangDong Topstrong 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.
Stagnating economy with rate increase
– GuangDong Topstrong 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 Furniture & Fixtures industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Furniture & Fixtures industry are lowering. It can presents GuangDong Topstrong with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Furniture & Fixtures sector.
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 GuangDong Topstrong in the Furniture & Fixtures sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that GuangDong Topstrong is facing in Furniture & Fixtures sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– GuangDong Topstrong 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. GuangDong Topstrong can take advantage of this fund but it will also bring new competitors in the Furniture & Fixtures industry.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Technology acceleration in Forth Industrial Revolution
– GuangDong Topstrong has witnessed rapid integration of technology during Covid-19 in the Furniture & Fixtures industry. As one of the leading players in the industry, GuangDong Topstrong needs to keep up with the evolution of technology in the Furniture & Fixtures 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, GuangDong Topstrong may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Furniture & Fixtures 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 GuangDong Topstrong business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– GuangDong Topstrong 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 Furniture & Fixtures industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for GuangDong Topstrong in Furniture & Fixtures industry. The Furniture & Fixtures 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 GuangDong Topstrong Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at GuangDong Topstrong 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 GuangDong Topstrong 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 GuangDong Topstrong 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 GuangDong Topstrong 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 GuangDong Topstrong needs to make to build a sustainable competitive advantage.