SWOT Analysis / TOWS Matrix for Guangzhou Haozhi Industrial (China)
Based on various researches at Oak Spring University , Guangzhou Haozhi Industrial is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, central banks are concerned over increasing inflation, there is increasing trade war between United States & China, increasing transportation and logistics costs,
challanges to central banks by blockchain based private currencies, technology disruption, etc
Introduction to SWOT Analysis of Guangzhou Haozhi Industrial
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Guangzhou Haozhi Industrial can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Guangzhou Haozhi Industrial, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Guangzhou Haozhi Industrial 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 Guangzhou Haozhi Industrial can be done for the following purposes –
1. Strategic planning of Guangzhou Haozhi Industrial
2. Improving business portfolio management of Guangzhou Haozhi Industrial
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 Guangzhou Haozhi Industrial
Strengths of Guangzhou Haozhi Industrial | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Guangzhou Haozhi Industrial are -
Diverse revenue streams
– Guangzhou Haozhi Industrial is present in almost all the verticals within the Misc. Capital Goods industry. This has provided Guangzhou Haozhi Industrial 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 Guangzhou Haozhi Industrial in Misc. Capital Goods industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Guangzhou Haozhi Industrial 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.
Organizational Resilience of Guangzhou Haozhi Industrial
– The covid-19 pandemic has put organizational resilience at the centre of everthing Guangzhou Haozhi Industrial does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Guangzhou Haozhi Industrial has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Guangzhou Haozhi Industrial 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.
Analytics focus
– Guangzhou Haozhi Industrial is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the Misc. Capital Goods industry. The technology infrastructure of China is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Low bargaining power of suppliers
– Suppliers of Guangzhou Haozhi Industrial in the Capital Goods sector have low bargaining power. Guangzhou Haozhi Industrial has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Guangzhou Haozhi Industrial to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Guangzhou Haozhi Industrial 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.
Ability to recruit top talent
– Guangzhou Haozhi Industrial is one of the leading players in the Misc. Capital Goods 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.
Innovation driven organization
– Guangzhou Haozhi Industrial is one of the most innovative firm in Misc. Capital Goods sector.
Highly skilled collaborators
– Guangzhou Haozhi Industrial has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Misc. Capital Goods industry. Secondly the value chain collaborators of Guangzhou Haozhi Industrial have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Guangzhou Haozhi Industrial 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 Guangzhou Haozhi Industrial | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Guangzhou Haozhi Industrial are -
Capital Spending Reduction
– Even during the low interest decade, Guangzhou Haozhi Industrial 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 Misc. Capital Goods industry using digital technology.
Products dominated business model
– Even though Guangzhou Haozhi Industrial has some of the most successful models in the Misc. Capital Goods industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Guangzhou Haozhi Industrial should strive to include more intangible value offerings along with its core products and services.
Employees’ less understanding of Guangzhou Haozhi Industrial strategy
– From the outside it seems that the employees of Guangzhou Haozhi Industrial 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.
Slow to strategic competitive environment developments
– As Guangzhou Haozhi Industrial 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 decision making process
– As mentioned earlier in the report, Guangzhou Haozhi Industrial 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. Guangzhou Haozhi Industrial 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 Guangzhou Haozhi Industrial ‘s star products
– The top 2 products and services of Guangzhou Haozhi Industrial 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 Guangzhou Haozhi Industrial has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee of Guangzhou Haozhi Industrial 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.
Low market penetration in new markets
– Outside its home market of China, Guangzhou Haozhi Industrial needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Guangzhou Haozhi Industrial supply chain. Even after few cautionary changes, Guangzhou Haozhi Industrial is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Guangzhou Haozhi Industrial vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Guangzhou Haozhi Industrial 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.
Workers concerns about automation
– As automation is fast increasing in the Misc. Capital Goods industry, Guangzhou Haozhi Industrial needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Guangzhou Haozhi Industrial Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Guangzhou Haozhi Industrial 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, Guangzhou Haozhi Industrial can use these opportunities to build new business models that can help the communities that Guangzhou Haozhi Industrial operates in. Secondly it can use opportunities from government spending in Misc. Capital Goods sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Guangzhou Haozhi Industrial 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.
Creating value in data economy
– The success of analytics program of Guangzhou Haozhi Industrial has opened avenues for new revenue streams for the organization in Misc. Capital Goods industry. This can help Guangzhou Haozhi Industrial to build a more holistic ecosystem for Guangzhou Haozhi Industrial products in the Misc. Capital Goods industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Guangzhou Haozhi Industrial to increase its market reach. Guangzhou Haozhi Industrial 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Guangzhou Haozhi Industrial is facing challenges because of the dominance of functional experts in the organization. Guangzhou Haozhi Industrial can utilize new technology in the field of Misc. Capital Goods industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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 Guangzhou Haozhi Industrial 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.
Buying journey improvements
– Guangzhou Haozhi Industrial 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Misc. Capital Goods industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Guangzhou Haozhi Industrial can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Guangzhou Haozhi Industrial can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Using analytics as competitive advantage
– Guangzhou Haozhi Industrial has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Misc. Capital Goods sector. This continuous investment in analytics has enabled Guangzhou Haozhi Industrial to build a competitive advantage using analytics. The analytics driven competitive advantage can help Guangzhou Haozhi Industrial to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Guangzhou Haozhi Industrial in the Misc. Capital Goods industry. Now Guangzhou Haozhi Industrial can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Guangzhou Haozhi Industrial 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.
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. Guangzhou Haozhi Industrial 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 Guangzhou Haozhi Industrial 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.
Threats Guangzhou Haozhi Industrial External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Guangzhou Haozhi Industrial are -
Shortening product life cycle
– it is one of the major threat that Guangzhou Haozhi Industrial is facing in Misc. Capital Goods sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Guangzhou Haozhi Industrial has witnessed rapid integration of technology during Covid-19 in the Misc. Capital Goods industry. As one of the leading players in the industry, Guangzhou Haozhi Industrial needs to keep up with the evolution of technology in the Misc. Capital Goods 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Guangzhou Haozhi Industrial 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.
High dependence on third party suppliers
– Guangzhou Haozhi Industrial 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Guangzhou Haozhi Industrial 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 Guangzhou Haozhi Industrial prominent markets.
Regulatory challenges
– Guangzhou Haozhi Industrial 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 Misc. Capital Goods industry regulations.
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 Guangzhou Haozhi Industrial in the Misc. Capital Goods 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. Guangzhou Haozhi Industrial needs to understand the core reasons impacting the Misc. Capital Goods industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Misc. Capital Goods industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Guangzhou Haozhi Industrial can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Guangzhou Haozhi Industrial business can come under increasing regulations regarding data privacy, data security, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Guangzhou Haozhi Industrial.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Misc. Capital Goods industry are lowering. It can presents Guangzhou Haozhi Industrial 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.
Weighted SWOT Analysis of Guangzhou Haozhi Industrial Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Guangzhou Haozhi Industrial 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 Guangzhou Haozhi Industrial 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 Guangzhou Haozhi Industrial 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 Guangzhou Haozhi Industrial 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 Guangzhou Haozhi Industrial needs to make to build a sustainable competitive advantage.
