SWOT Analysis / TOWS Matrix for Zhejiang Jinghua Laser (China)
Based on various researches at Oak Spring University , Zhejiang Jinghua Laser is operating in a macro-environment that has been destablized by – technology disruption, increasing commodity prices, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs,
supply chains are disrupted by pandemic , increasing energy prices, etc
Introduction to SWOT Analysis of Zhejiang Jinghua Laser
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Zhejiang Jinghua Laser can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Zhejiang Jinghua Laser, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Zhejiang Jinghua Laser 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 Zhejiang Jinghua Laser can be done for the following purposes –
1. Strategic planning of Zhejiang Jinghua Laser
2. Improving business portfolio management of Zhejiang Jinghua Laser
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 Zhejiang Jinghua Laser
Strengths of Zhejiang Jinghua Laser | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Zhejiang Jinghua Laser are -
Strong track record of project management in the Containers & Packaging industry
– Zhejiang Jinghua Laser is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Zhejiang Jinghua Laser 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 Zhejiang Jinghua Laser is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Zhejiang Jinghua Laser emphasize – knowledge, initiative, and innovation.
Ability to lead change in Containers & Packaging
– Zhejiang Jinghua Laser is one of the leading players in the Containers & Packaging industry in China. Over the years it has not only transformed the business landscape in the Containers & Packaging industry in China but also across the existing markets. The ability to lead change has enabled Zhejiang Jinghua Laser in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Zhejiang Jinghua Laser in the Basic Materials sector have low bargaining power. Zhejiang Jinghua Laser has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Zhejiang Jinghua Laser to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Zhejiang Jinghua Laser is one of the most innovative firm in Containers & Packaging sector.
Training and development
– Zhejiang Jinghua Laser 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.
Highly skilled collaborators
– Zhejiang Jinghua Laser 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 Zhejiang Jinghua Laser have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Zhejiang Jinghua Laser has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Zhejiang Jinghua Laser to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Zhejiang Jinghua Laser has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Zhejiang Jinghua Laser staying ahead in the Containers & Packaging 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 Containers & Packaging industry
– Zhejiang Jinghua Laser has clearly differentiated products in the market place. This has enabled Zhejiang Jinghua Laser to fetch slight price premium compare to the competitors in the Containers & Packaging industry. The sustainable margins have also helped Zhejiang Jinghua Laser to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Zhejiang Jinghua Laser in Containers & Packaging industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Containers & Packaging industry
- digital transformation varies from industry to industry. For Zhejiang Jinghua Laser digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Zhejiang Jinghua Laser 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 Zhejiang Jinghua Laser | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Zhejiang Jinghua Laser are -
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 Zhejiang Jinghua Laser supply chain. Even after few cautionary changes, Zhejiang Jinghua Laser is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Zhejiang Jinghua Laser vulnerable to further global disruptions in South East Asia.
Employees’ less understanding of Zhejiang Jinghua Laser strategy
– From the outside it seems that the employees of Zhejiang Jinghua Laser 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.
Interest costs
– Compare to the competition, Zhejiang Jinghua Laser 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.
Products dominated business model
– Even though Zhejiang Jinghua Laser has some of the most successful models in the Containers & Packaging industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Zhejiang Jinghua Laser should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of China, Zhejiang Jinghua Laser needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative at Zhejiang Jinghua Laser, in the dynamic environment of Containers & Packaging industry it has struggled to respond to the nimble upstart competition. Zhejiang Jinghua Laser has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Zhejiang Jinghua Laser 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.
Slow decision making process
– As mentioned earlier in the report, Zhejiang Jinghua Laser has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Containers & Packaging industry over the last five years. Zhejiang Jinghua Laser 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.
High operating costs
– Compare to the competitors, Zhejiang Jinghua Laser 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 Zhejiang Jinghua Laser lucrative customers.
Need for greater diversity
– Zhejiang Jinghua Laser 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 Zhejiang Jinghua Laser 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 Zhejiang Jinghua Laser can leverage the sales team experience to cultivate customer relationships as Zhejiang Jinghua Laser is planning to shift buying processes online.
Zhejiang Jinghua Laser Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Zhejiang Jinghua Laser are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Zhejiang Jinghua Laser 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 Zhejiang Jinghua Laser to hire the very best people irrespective of their geographical location.
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 Zhejiang Jinghua Laser 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.
Loyalty marketing
– Zhejiang Jinghua Laser 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.
Learning at scale
– Online learning technologies has now opened space for Zhejiang Jinghua Laser 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.
Creating value in data economy
– The success of analytics program of Zhejiang Jinghua Laser has opened avenues for new revenue streams for the organization in Containers & Packaging industry. This can help Zhejiang Jinghua Laser to build a more holistic ecosystem for Zhejiang Jinghua Laser products in the Containers & Packaging industry by providing – data insight services, data privacy related products, data based consulting services, etc.
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. Zhejiang Jinghua Laser can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Zhejiang Jinghua Laser can use the latest technology developments to improve its manufacturing and designing process in Containers & Packaging 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.
Better consumer reach
– The expansion of the 5G network will help Zhejiang Jinghua Laser to increase its market reach. Zhejiang Jinghua Laser 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Zhejiang Jinghua Laser 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Zhejiang Jinghua Laser can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help Zhejiang Jinghua Laser to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Zhejiang Jinghua Laser 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.
Developing new processes and practices
– Zhejiang Jinghua Laser can develop new processes and procedures in Containers & Packaging 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.
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 Zhejiang Jinghua Laser in the Containers & Packaging industry. Now Zhejiang Jinghua Laser can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Zhejiang Jinghua Laser External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Zhejiang Jinghua Laser are -
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 Zhejiang Jinghua Laser in the Containers & Packaging sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Zhejiang Jinghua Laser 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 Zhejiang Jinghua Laser prominent markets.
Regulatory challenges
– Zhejiang Jinghua Laser 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.
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.
Stagnating economy with rate increase
– Zhejiang Jinghua Laser 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 Containers & Packaging industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Containers & Packaging industry are lowering. It can presents Zhejiang Jinghua Laser with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Containers & Packaging sector.
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 wage structure of Zhejiang Jinghua Laser
– 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 Zhejiang Jinghua Laser.
Consumer confidence and its impact on Zhejiang Jinghua Laser 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.
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 Zhejiang Jinghua Laser business can come under increasing regulations regarding data privacy, data security, etc.
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. Zhejiang Jinghua Laser needs to understand the core reasons impacting the Containers & Packaging industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Zhejiang Jinghua Laser 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.
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 Zhejiang Jinghua Laser.
Weighted SWOT Analysis of Zhejiang Jinghua Laser Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Zhejiang Jinghua Laser 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 Zhejiang Jinghua Laser 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 Zhejiang Jinghua Laser 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 Zhejiang Jinghua Laser 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 Zhejiang Jinghua Laser needs to make to build a sustainable competitive advantage.