Chengdu Xiling Power A (300733) SWOT Analysis / TOWS Matrix / MBA Resources
Auto & Truck Parts
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Chengdu Xiling Power A (China)
Based on various researches at Oak Spring University , Chengdu Xiling Power A is operating in a macro-environment that has been destablized by – banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, there is backlash against globalization, increasing household debt because of falling income levels,
wage bills are increasing, increasing energy prices, etc
Introduction to SWOT Analysis of Chengdu Xiling Power A
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Chengdu Xiling Power A can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Chengdu Xiling Power A, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Chengdu Xiling Power A 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 Chengdu Xiling Power A can be done for the following purposes –
1. Strategic planning of Chengdu Xiling Power A
2. Improving business portfolio management of Chengdu Xiling Power A
3. Assessing feasibility of the new initiative in China
4. Making a Auto & Truck Parts sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Chengdu Xiling Power A
Strengths of Chengdu Xiling Power A | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Chengdu Xiling Power A are -
Innovation driven organization
– Chengdu Xiling Power A is one of the most innovative firm in Auto & Truck Parts sector.
Effective Research and Development (R&D)
– Chengdu Xiling Power A has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Chengdu Xiling Power A staying ahead in the Auto & Truck Parts industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Chengdu Xiling Power A 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.
Digital Transformation in Auto & Truck Parts industry
- digital transformation varies from industry to industry. For Chengdu Xiling Power A digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Chengdu Xiling Power A 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.
High switching costs
– The high switching costs that Chengdu Xiling Power A 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.
Operational resilience
– The operational resilience strategy of Chengdu Xiling Power A comprises – understanding the underlying the factors in the Auto & Truck Parts 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.
Diverse revenue streams
– Chengdu Xiling Power A is present in almost all the verticals within the Auto & Truck Parts industry. This has provided Chengdu Xiling Power A 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.
Superior customer experience
– The customer experience strategy of Chengdu Xiling Power A in Auto & Truck Parts industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management in the Auto & Truck Parts industry
– Chengdu Xiling Power A is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Chengdu Xiling Power A has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Chengdu Xiling Power A 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.
Ability to recruit top talent
– Chengdu Xiling Power A is one of the leading players in the Auto & Truck Parts 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.
Organizational Resilience of Chengdu Xiling Power A
– The covid-19 pandemic has put organizational resilience at the centre of everthing Chengdu Xiling Power A does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses of Chengdu Xiling Power A | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Chengdu Xiling Power A are -
Increasing silos among functional specialists
– The organizational structure of Chengdu Xiling Power A is dominated by functional specialists. It is not different from other players in the Auto & Truck Parts industry, but Chengdu Xiling Power A needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Chengdu Xiling Power A to focus more on services in the Auto & Truck Parts industry rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee of Chengdu Xiling Power A is just above the Auto & Truck Parts 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 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 Chengdu Xiling Power A supply chain. Even after few cautionary changes, Chengdu Xiling Power A is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Chengdu Xiling Power A vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– From the outside it seems that Chengdu Xiling Power A needs to have more collaboration between its sales team and marketing team. Sales professionals in the Auto & Truck Parts industry have deep experience in developing customer relationships. Marketing department at Chengdu Xiling Power A can leverage the sales team experience to cultivate customer relationships as Chengdu Xiling Power A is planning to shift buying processes online.
Interest costs
– Compare to the competition, Chengdu Xiling Power A 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.
Low market penetration in new markets
– Outside its home market of China, Chengdu Xiling Power A needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Chengdu Xiling Power A has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Auto & Truck Parts industry over the last five years. Chengdu Xiling Power A 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 dependence on Chengdu Xiling Power A ‘s star products
– The top 2 products and services of Chengdu Xiling Power A still accounts for major business revenue. This dependence on star products in Auto & Truck Parts industry has resulted into insufficient focus on developing new products, even though Chengdu Xiling Power A has relatively successful track record of launching new products.
Skills based hiring in Auto & Truck Parts industry
– The stress on hiring functional specialists at Chengdu Xiling Power A 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.
Ability to respond to the competition
– As the decision making is very deliberative at Chengdu Xiling Power A, in the dynamic environment of Auto & Truck Parts industry it has struggled to respond to the nimble upstart competition. Chengdu Xiling Power A has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Chengdu Xiling Power A has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Auto & Truck Parts industry using digital technology.
Chengdu Xiling Power A Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Chengdu Xiling Power A are -
Building a culture of innovation
– managers at Chengdu Xiling Power A 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 Auto & Truck Parts industry.
Use of Bitcoin and other crypto currencies for transactions in Auto & Truck Parts industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Chengdu Xiling Power A in the Auto & Truck Parts industry. Now Chengdu Xiling Power A can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Chengdu Xiling Power A can use these opportunities to build new business models that can help the communities that Chengdu Xiling Power A operates in. Secondly it can use opportunities from government spending in Auto & Truck Parts sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Chengdu Xiling Power A 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 Chengdu Xiling Power A to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Chengdu Xiling Power A can develop new processes and procedures in Auto & Truck Parts 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.
Creating value in data economy
– The success of analytics program of Chengdu Xiling Power A has opened avenues for new revenue streams for the organization in Auto & Truck Parts industry. This can help Chengdu Xiling Power A to build a more holistic ecosystem for Chengdu Xiling Power A products in the Auto & Truck Parts industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Chengdu Xiling Power A in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Auto & Truck Parts industry, and it will provide faster access to the consumers.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Chengdu Xiling Power A 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 Chengdu Xiling Power A to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Chengdu Xiling Power A has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Auto & Truck Parts sector. This continuous investment in analytics has enabled Chengdu Xiling Power A to build a competitive advantage using analytics. The analytics driven competitive advantage can help Chengdu Xiling Power A to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Chengdu Xiling Power A can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Chengdu Xiling Power A 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Chengdu Xiling Power A 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 Auto & Truck Parts industry, but it has also influenced the consumer preferences. Chengdu Xiling Power A can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Chengdu Xiling Power A External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Chengdu Xiling Power A are -
Increasing wage structure of Chengdu Xiling Power A
– 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 Chengdu Xiling Power A.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Chengdu Xiling Power A 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 Chengdu Xiling Power A prominent markets.
Stagnating economy with rate increase
– Chengdu Xiling Power A 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 Auto & Truck Parts industry.
Environmental challenges
– Chengdu Xiling Power A 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. Chengdu Xiling Power A can take advantage of this fund but it will also bring new competitors in the Auto & Truck Parts industry.
Regulatory challenges
– Chengdu Xiling Power A 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 Auto & Truck Parts industry regulations.
High dependence on third party suppliers
– Chengdu Xiling Power A 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Chengdu Xiling Power A may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Auto & Truck Parts sector.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Chengdu Xiling Power A in the Auto & Truck Parts sector and impact the bottomline of the organization.
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. Chengdu Xiling Power A needs to understand the core reasons impacting the Auto & Truck Parts industry. This will help it in building a better workplace.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Auto & Truck Parts industry are lowering. It can presents Chengdu Xiling Power A with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Auto & Truck Parts sector.
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.
Consumer confidence and its impact on Chengdu Xiling Power A 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 Auto & Truck Parts industry and other sectors.
Weighted SWOT Analysis of Chengdu Xiling Power A Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Chengdu Xiling Power A 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 Chengdu Xiling Power A 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 Chengdu Xiling Power A 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 Chengdu Xiling Power A 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 Chengdu Xiling Power A needs to make to build a sustainable competitive advantage.