Zhangjiagang Furui Special Equip (300228) SWOT Analysis / TOWS Matrix / MBA Resources
Misc. Capital Goods
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Zhangjiagang Furui Special Equip (China)
Based on various researches at Oak Spring University , Zhangjiagang Furui Special Equip is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, increasing commodity prices, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , wage bills are increasing, geopolitical disruptions, increasing government debt because of Covid-19 spendings,
digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Zhangjiagang Furui Special Equip
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Zhangjiagang Furui Special Equip can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Zhangjiagang Furui Special Equip, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Zhangjiagang Furui Special Equip 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 Zhangjiagang Furui Special Equip can be done for the following purposes –
1. Strategic planning of Zhangjiagang Furui Special Equip
2. Improving business portfolio management of Zhangjiagang Furui Special Equip
3. Assessing feasibility of the new initiative in China
4. Making a Misc. Capital Goods sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Zhangjiagang Furui Special Equip
Strengths of Zhangjiagang Furui Special Equip | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Zhangjiagang Furui Special Equip are -
Strong track record of project management in the Misc. Capital Goods industry
– Zhangjiagang Furui Special Equip is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Zhangjiagang Furui Special Equip 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
– Zhangjiagang Furui Special Equip has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Zhangjiagang Furui Special Equip to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Zhangjiagang Furui Special Equip 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.
Operational resilience
– The operational resilience strategy of Zhangjiagang Furui Special Equip comprises – understanding the underlying the factors in the Misc. Capital Goods 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.
Successful track record of launching new products
– Zhangjiagang Furui Special Equip has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Zhangjiagang Furui Special Equip 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.
Superior customer experience
– The customer experience strategy of Zhangjiagang Furui Special Equip in Misc. Capital Goods industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Zhangjiagang Furui Special Equip is one of the most innovative firm in Misc. Capital Goods sector.
Low bargaining power of suppliers
– Suppliers of Zhangjiagang Furui Special Equip in the Capital Goods sector have low bargaining power. Zhangjiagang Furui Special Equip has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Zhangjiagang Furui Special Equip to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Zhangjiagang Furui Special Equip has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Zhangjiagang Furui Special Equip staying ahead in the Misc. Capital Goods industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Misc. Capital Goods industry
– Zhangjiagang Furui Special Equip has clearly differentiated products in the market place. This has enabled Zhangjiagang Furui Special Equip to fetch slight price premium compare to the competitors in the Misc. Capital Goods industry. The sustainable margins have also helped Zhangjiagang Furui Special Equip to invest into research and development (R&D) and innovation.
Training and development
– Zhangjiagang Furui Special Equip has one of the best training and development program in Capital Goods 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.
Weaknesses of Zhangjiagang Furui Special Equip | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Zhangjiagang Furui Special Equip are -
Aligning sales with marketing
– From the outside it seems that Zhangjiagang Furui Special Equip needs to have more collaboration between its sales team and marketing team. Sales professionals in the Misc. Capital Goods industry have deep experience in developing customer relationships. Marketing department at Zhangjiagang Furui Special Equip can leverage the sales team experience to cultivate customer relationships as Zhangjiagang Furui Special Equip is planning to shift buying processes online.
Skills based hiring in Misc. Capital Goods industry
– The stress on hiring functional specialists at Zhangjiagang Furui Special Equip 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.
Need for greater diversity
– Zhangjiagang Furui Special Equip 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.
Compensation and incentives
– The revenue per employee of Zhangjiagang Furui Special Equip is just above the Misc. Capital Goods 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.
High dependence on Zhangjiagang Furui Special Equip ‘s star products
– The top 2 products and services of Zhangjiagang Furui Special Equip still accounts for major business revenue. This dependence on star products in Misc. Capital Goods industry has resulted into insufficient focus on developing new products, even though Zhangjiagang Furui Special Equip has relatively successful track record of launching new products.
Lack of clear differentiation of Zhangjiagang Furui Special Equip products
– To increase the profitability and margins on the products, Zhangjiagang Furui Special Equip needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Zhangjiagang Furui Special Equip has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Misc. Capital Goods industry over the last five years. Zhangjiagang Furui Special Equip 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.
Ability to respond to the competition
– As the decision making is very deliberative at Zhangjiagang Furui Special Equip, in the dynamic environment of Misc. Capital Goods industry it has struggled to respond to the nimble upstart competition. Zhangjiagang Furui Special Equip has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As Zhangjiagang Furui Special Equip is one of the leading players in the Misc. Capital Goods industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Misc. Capital Goods industry in last five years.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Zhangjiagang Furui Special Equip is slow explore the new channels of communication. These new channels of communication can help Zhangjiagang Furui Special Equip to provide better information regarding Misc. Capital Goods products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Zhangjiagang Furui Special Equip has a high cash cycle compare to other players in the Misc. Capital Goods industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Zhangjiagang Furui Special Equip Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Zhangjiagang Furui Special Equip 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, Zhangjiagang Furui Special Equip can use these opportunities to build new business models that can help the communities that Zhangjiagang Furui Special Equip operates in. Secondly it can use opportunities from government spending in Misc. Capital Goods sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Zhangjiagang Furui Special Equip 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 Zhangjiagang Furui Special Equip to increase its market reach. Zhangjiagang Furui Special Equip 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.
Developing new processes and practices
– Zhangjiagang Furui Special Equip can develop new processes and procedures in Misc. Capital Goods industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Misc. Capital Goods industry, but it has also influenced the consumer preferences. Zhangjiagang Furui Special Equip can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Zhangjiagang Furui Special Equip 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.
Learning at scale
– Online learning technologies has now opened space for Zhangjiagang Furui Special Equip 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Zhangjiagang Furui Special Equip 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 Zhangjiagang Furui Special Equip to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Zhangjiagang Furui Special Equip 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.
Creating value in data economy
– The success of analytics program of Zhangjiagang Furui Special Equip has opened avenues for new revenue streams for the organization in Misc. Capital Goods industry. This can help Zhangjiagang Furui Special Equip to build a more holistic ecosystem for Zhangjiagang Furui Special Equip products in the Misc. Capital Goods industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Zhangjiagang Furui Special Equip 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.
Use of Bitcoin and other crypto currencies for transactions in Misc. Capital Goods industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Zhangjiagang Furui Special Equip in the Misc. Capital Goods industry. Now Zhangjiagang Furui Special Equip can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Zhangjiagang Furui Special Equip can improve the customer journey of consumers in the Misc. Capital Goods 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 Zhangjiagang Furui Special Equip External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Zhangjiagang Furui Special Equip are -
Environmental challenges
– Zhangjiagang Furui Special Equip 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. Zhangjiagang Furui Special Equip can take advantage of this fund but it will also bring new competitors in the Misc. Capital Goods industry.
High dependence on third party suppliers
– Zhangjiagang Furui Special Equip 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.
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 Zhangjiagang Furui Special Equip in the Misc. Capital Goods sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Zhangjiagang Furui Special Equip is facing in Misc. Capital Goods sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Zhangjiagang Furui Special Equip in Misc. Capital Goods industry. The Misc. Capital Goods 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.
Consumer confidence and its impact on Zhangjiagang Furui Special Equip 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 Misc. Capital Goods industry and other sectors.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Misc. Capital Goods industry are lowering. It can presents Zhangjiagang Furui Special Equip with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Misc. Capital Goods sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Zhangjiagang Furui Special Equip 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 Zhangjiagang Furui Special Equip prominent markets.
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 Zhangjiagang Furui Special Equip.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Zhangjiagang Furui Special Equip may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Misc. Capital Goods sector.
Stagnating economy with rate increase
– Zhangjiagang Furui Special Equip 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 Misc. Capital Goods 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.
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 Zhangjiagang Furui Special Equip Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Zhangjiagang Furui Special Equip 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 Zhangjiagang Furui Special Equip 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 Zhangjiagang Furui Special Equip 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 Zhangjiagang Furui Special Equip 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 Zhangjiagang Furui Special Equip needs to make to build a sustainable competitive advantage.