SWOT Analysis / TOWS Matrix for ChongQing Zhengchuan Pharma (China)
Based on various researches at Oak Spring University , ChongQing Zhengchuan Pharma is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, increasing commodity prices, there is increasing trade war between United States & China, increasing energy prices, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings,
wage bills are increasing, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of ChongQing Zhengchuan Pharma
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that ChongQing Zhengchuan Pharma can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the ChongQing Zhengchuan Pharma, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which ChongQing Zhengchuan Pharma 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 Zhengchuan Pharma can be done for the following purposes –
1. Strategic planning of ChongQing Zhengchuan Pharma
2. Improving business portfolio management of ChongQing Zhengchuan Pharma
3. Assessing feasibility of the new initiative in China
4. Making a Containers & Packaging sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of ChongQing Zhengchuan Pharma
Strengths of ChongQing Zhengchuan Pharma | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of ChongQing Zhengchuan Pharma are -
Training and development
– ChongQing Zhengchuan Pharma has one of the best training and development program in Basic Materials 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.
High switching costs
– The high switching costs that ChongQing Zhengchuan Pharma 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.
High brand equity
– ChongQing Zhengchuan Pharma has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled ChongQing Zhengchuan Pharma to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- ChongQing Zhengchuan Pharma 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 Zhengchuan Pharma is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at ChongQing Zhengchuan Pharma emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– ChongQing Zhengchuan Pharma has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. ChongQing Zhengchuan Pharma 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.
Digital Transformation in Containers & Packaging industry
- digital transformation varies from industry to industry. For ChongQing Zhengchuan Pharma digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. ChongQing Zhengchuan Pharma 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.
Low bargaining power of suppliers
– Suppliers of ChongQing Zhengchuan Pharma in the Basic Materials sector have low bargaining power. ChongQing Zhengchuan Pharma has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps ChongQing Zhengchuan Pharma to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– ChongQing Zhengchuan Pharma has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Containers & Packaging industry. Secondly the value chain collaborators of ChongQing Zhengchuan Pharma have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management in the Containers & Packaging industry
– ChongQing Zhengchuan Pharma 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 Zhengchuan Pharma 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 Containers & Packaging 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.
Diverse revenue streams
– ChongQing Zhengchuan Pharma is present in almost all the verticals within the Containers & Packaging industry. This has provided ChongQing Zhengchuan Pharma 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.
Sustainable margins compare to other players in Containers & Packaging industry
– ChongQing Zhengchuan Pharma has clearly differentiated products in the market place. This has enabled ChongQing Zhengchuan Pharma to fetch slight price premium compare to the competitors in the Containers & Packaging industry. The sustainable margins have also helped ChongQing Zhengchuan Pharma to invest into research and development (R&D) and innovation.
Weaknesses of ChongQing Zhengchuan Pharma | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of ChongQing Zhengchuan Pharma are -
High bargaining power of channel partners in Containers & Packaging industry
– because of the regulatory requirements in China, ChongQing Zhengchuan Pharma 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 Containers & Packaging industry.
Compensation and incentives
– The revenue per employee of ChongQing Zhengchuan Pharma is just above the Containers & Packaging 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.
Aligning sales with marketing
– From the outside it seems that ChongQing Zhengchuan Pharma needs to have more collaboration between its sales team and marketing team. Sales professionals in the Containers & Packaging industry have deep experience in developing customer relationships. Marketing department at ChongQing Zhengchuan Pharma can leverage the sales team experience to cultivate customer relationships as ChongQing Zhengchuan Pharma is planning to shift buying processes online.
Skills based hiring in Containers & Packaging industry
– The stress on hiring functional specialists at ChongQing Zhengchuan Pharma 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.
Interest costs
– Compare to the competition, ChongQing Zhengchuan Pharma 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.
High cash cycle compare to competitors
ChongQing Zhengchuan Pharma has a high cash cycle compare to other players in the Containers & Packaging industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Ability to respond to the competition
– As the decision making is very deliberative at ChongQing Zhengchuan Pharma, in the dynamic environment of Containers & Packaging industry it has struggled to respond to the nimble upstart competition. ChongQing Zhengchuan Pharma has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, ChongQing Zhengchuan Pharma has high operating costs in the Containers & Packaging industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract ChongQing Zhengchuan Pharma lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the Containers & Packaging industry, ChongQing Zhengchuan Pharma needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Increasing silos among functional specialists
– The organizational structure of ChongQing Zhengchuan Pharma is dominated by functional specialists. It is not different from other players in the Containers & Packaging industry, but ChongQing Zhengchuan Pharma needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help ChongQing Zhengchuan Pharma to focus more on services in the Containers & Packaging industry rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of China, ChongQing Zhengchuan Pharma needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
ChongQing Zhengchuan Pharma Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of ChongQing Zhengchuan Pharma are -
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help ChongQing Zhengchuan Pharma to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Use of Bitcoin and other crypto currencies for transactions in Containers & Packaging industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for ChongQing Zhengchuan Pharma in the Containers & Packaging industry. Now ChongQing Zhengchuan Pharma 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 ChongQing Zhengchuan Pharma in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Containers & Packaging industry, and it will provide faster access to the consumers.
Learning at scale
– Online learning technologies has now opened space for ChongQing Zhengchuan Pharma 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.
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 Zhengchuan Pharma can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Containers & Packaging industry, but it has also influenced the consumer preferences. ChongQing Zhengchuan Pharma can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help ChongQing Zhengchuan Pharma to increase its market reach. ChongQing Zhengchuan Pharma 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.
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 Zhengchuan Pharma can use these opportunities to build new business models that can help the communities that ChongQing Zhengchuan Pharma operates in. Secondly it can use opportunities from government spending in Containers & Packaging sector.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Containers & Packaging industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. ChongQing Zhengchuan Pharma 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 Zhengchuan Pharma 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.
Creating value in data economy
– The success of analytics program of ChongQing Zhengchuan Pharma has opened avenues for new revenue streams for the organization in Containers & Packaging industry. This can help ChongQing Zhengchuan Pharma to build a more holistic ecosystem for ChongQing Zhengchuan Pharma products in the Containers & Packaging industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at ChongQing Zhengchuan Pharma 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 Containers & Packaging industry.
Loyalty marketing
– ChongQing Zhengchuan Pharma 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.
Buying journey improvements
– ChongQing Zhengchuan Pharma can improve the customer journey of consumers in the Containers & Packaging industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Threats ChongQing Zhengchuan Pharma External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of ChongQing Zhengchuan Pharma are -
Shortening product life cycle
– it is one of the major threat that ChongQing Zhengchuan Pharma is facing in Containers & Packaging sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on ChongQing Zhengchuan Pharma 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 Containers & Packaging industry and other sectors.
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 Zhengchuan Pharma in the Containers & Packaging sector and impact the bottomline of the organization.
Regulatory challenges
– ChongQing Zhengchuan Pharma 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 Containers & Packaging industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Containers & Packaging industry are lowering. It can presents ChongQing Zhengchuan Pharma with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Containers & Packaging sector.
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 Zhengchuan Pharma needs to understand the core reasons impacting the Containers & Packaging industry. This will help it in building a better workplace.
Increasing wage structure of ChongQing Zhengchuan Pharma
– 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 Zhengchuan Pharma.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for ChongQing Zhengchuan Pharma in Containers & Packaging industry. The Containers & Packaging 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, ChongQing Zhengchuan Pharma can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate ChongQing Zhengchuan Pharma prominent markets.
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 Zhengchuan Pharma 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.
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 Zhengchuan Pharma business can come under increasing regulations regarding data privacy, data security, etc.
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 Zhengchuan Pharma.
Weighted SWOT Analysis of ChongQing Zhengchuan Pharma Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at ChongQing Zhengchuan Pharma 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 Zhengchuan Pharma 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 Zhengchuan Pharma 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 Zhengchuan Pharma 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 Zhengchuan Pharma needs to make to build a sustainable competitive advantage.