XiAn Tian He Defense (300397) SWOT Analysis / TOWS Matrix / MBA Resources
Aerospace & Defense
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for XiAn Tian He Defense (China)
Based on various researches at Oak Spring University , XiAn Tian He Defense is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, increasing transportation and logistics costs, central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, increasing energy prices, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy,
wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of XiAn Tian He Defense
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that XiAn Tian He Defense can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the XiAn Tian He Defense, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which XiAn Tian He Defense 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 XiAn Tian He Defense can be done for the following purposes –
1. Strategic planning of XiAn Tian He Defense
2. Improving business portfolio management of XiAn Tian He Defense
3. Assessing feasibility of the new initiative in China
4. Making a Aerospace & Defense sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of XiAn Tian He Defense
Strengths of XiAn Tian He Defense | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of XiAn Tian He Defense are -
High brand equity
– XiAn Tian He Defense has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled XiAn Tian He Defense to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Aerospace & Defense
– XiAn Tian He Defense is one of the leading players in the Aerospace & Defense industry in China. Over the years it has not only transformed the business landscape in the Aerospace & Defense industry in China but also across the existing markets. The ability to lead change has enabled XiAn Tian He Defense in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Aerospace & Defense industry
- digital transformation varies from industry to industry. For XiAn Tian He Defense digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. XiAn Tian He Defense 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.
Superior customer experience
– The customer experience strategy of XiAn Tian He Defense in Aerospace & Defense industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy of XiAn Tian He Defense comprises – understanding the underlying the factors in the Aerospace & Defense 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.
Learning organization
- XiAn Tian He Defense 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 XiAn Tian He Defense is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at XiAn Tian He Defense emphasize – knowledge, initiative, and innovation.
Training and development
– XiAn Tian He Defense 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.
Ability to recruit top talent
– XiAn Tian He Defense is one of the leading players in the Aerospace & Defense industry in China. It is in a position to attract the best talent available in China. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Aerospace & Defense industry
– XiAn Tian He Defense has clearly differentiated products in the market place. This has enabled XiAn Tian He Defense to fetch slight price premium compare to the competitors in the Aerospace & Defense industry. The sustainable margins have also helped XiAn Tian He Defense to invest into research and development (R&D) and innovation.
Organizational Resilience of XiAn Tian He Defense
– The covid-19 pandemic has put organizational resilience at the centre of everthing XiAn Tian He Defense does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– XiAn Tian He Defense has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – XiAn Tian He Defense staying ahead in the Aerospace & Defense industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of XiAn Tian He Defense in the Capital Goods sector have low bargaining power. XiAn Tian He Defense has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps XiAn Tian He Defense to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses of XiAn Tian He Defense | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of XiAn Tian He Defense are -
No frontier risks strategy
– From the 10K / annual statement of XiAn Tian He Defense, it seems that company is thinking out the frontier risks that can impact Aerospace & Defense industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow decision making process
– As mentioned earlier in the report, XiAn Tian He Defense has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Aerospace & Defense industry over the last five years. XiAn Tian He Defense 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.
Interest costs
– Compare to the competition, XiAn Tian He Defense 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.
Aligning sales with marketing
– From the outside it seems that XiAn Tian He Defense needs to have more collaboration between its sales team and marketing team. Sales professionals in the Aerospace & Defense industry have deep experience in developing customer relationships. Marketing department at XiAn Tian He Defense can leverage the sales team experience to cultivate customer relationships as XiAn Tian He Defense is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of China, XiAn Tian He Defense 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 XiAn Tian He Defense, in the dynamic environment of Aerospace & Defense industry it has struggled to respond to the nimble upstart competition. XiAn Tian He Defense 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
XiAn Tian He Defense has a high cash cycle compare to other players in the Aerospace & Defense industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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 XiAn Tian He Defense supply chain. Even after few cautionary changes, XiAn Tian He Defense is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left XiAn Tian He Defense vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of XiAn Tian He Defense is dominated by functional specialists. It is not different from other players in the Aerospace & Defense industry, but XiAn Tian He Defense needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help XiAn Tian He Defense to focus more on services in the Aerospace & Defense industry rather than just following the product oriented approach.
Lack of clear differentiation of XiAn Tian He Defense products
– To increase the profitability and margins on the products, XiAn Tian He Defense needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though XiAn Tian He Defense has some of the most successful models in the Aerospace & Defense industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. XiAn Tian He Defense should strive to include more intangible value offerings along with its core products and services.
XiAn Tian He Defense Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of XiAn Tian He Defense are -
Buying journey improvements
– XiAn Tian He Defense can improve the customer journey of consumers in the Aerospace & Defense industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Building a culture of innovation
– managers at XiAn Tian He Defense 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 Aerospace & Defense industry.
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. XiAn Tian He Defense can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects XiAn Tian He Defense can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– XiAn Tian He Defense can develop new processes and procedures in Aerospace & Defense 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.
Using analytics as competitive advantage
– XiAn Tian He Defense has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Aerospace & Defense sector. This continuous investment in analytics has enabled XiAn Tian He Defense to build a competitive advantage using analytics. The analytics driven competitive advantage can help XiAn Tian He Defense to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– XiAn Tian He Defense 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, XiAn Tian He Defense 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Aerospace & Defense industry, but it has also influenced the consumer preferences. XiAn Tian He Defense can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for XiAn Tian He Defense 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.
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 XiAn Tian He Defense 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.
Creating value in data economy
– The success of analytics program of XiAn Tian He Defense has opened avenues for new revenue streams for the organization in Aerospace & Defense industry. This can help XiAn Tian He Defense to build a more holistic ecosystem for XiAn Tian He Defense products in the Aerospace & Defense industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Use of Bitcoin and other crypto currencies for transactions in Aerospace & Defense industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for XiAn Tian He Defense in the Aerospace & Defense industry. Now XiAn Tian He Defense can target international markets with far fewer capital restrictions requirements than the existing system.
Threats XiAn Tian He Defense External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of XiAn Tian He Defense are -
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.
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
– XiAn Tian He Defense has witnessed rapid integration of technology during Covid-19 in the Aerospace & Defense industry. As one of the leading players in the industry, XiAn Tian He Defense needs to keep up with the evolution of technology in the Aerospace & Defense 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.
Easy access to finance
– Easy access to finance in Aerospace & Defense industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. XiAn Tian He Defense can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 XiAn Tian He Defense in the Aerospace & Defense sector and impact the bottomline of the organization.
Increasing wage structure of XiAn Tian He Defense
– 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 XiAn Tian He Defense.
Stagnating economy with rate increase
– XiAn Tian He Defense 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 Aerospace & Defense industry.
High dependence on third party suppliers
– XiAn Tian He Defense 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.
Consumer confidence and its impact on XiAn Tian He Defense 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 Aerospace & Defense industry and other sectors.
Environmental challenges
– XiAn Tian He Defense 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. XiAn Tian He Defense can take advantage of this fund but it will also bring new competitors in the Aerospace & Defense industry.
Regulatory challenges
– XiAn Tian He Defense 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 Aerospace & Defense industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, XiAn Tian He Defense 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 XiAn Tian He Defense 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 XiAn Tian He Defense.
Weighted SWOT Analysis of XiAn Tian He Defense Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at XiAn Tian He Defense 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 XiAn Tian He Defense 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 XiAn Tian He Defense 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 XiAn Tian He Defense 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 XiAn Tian He Defense needs to make to build a sustainable competitive advantage.