Zhejiang CFMoto Power (603129) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Zhejiang CFMoto Power (China)

Based on various researches at Oak Spring University , Zhejiang CFMoto Power is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, etc

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Introduction to SWOT Analysis of Zhejiang CFMoto Power

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Zhejiang CFMoto Power can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Zhejiang CFMoto Power, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Zhejiang CFMoto Power 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Zhejiang CFMoto Power can be done for the following purposes –
1. Strategic planning of Zhejiang CFMoto Power
2. Improving business portfolio management of Zhejiang CFMoto Power
3. Assessing feasibility of the new initiative in China
4. Making a Recreational Products sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Zhejiang CFMoto Power

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Strengths of Zhejiang CFMoto Power | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Zhejiang CFMoto Power are -

Analytics focus

– Zhejiang CFMoto Power 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 Recreational Products 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.

Highly skilled collaborators

– Zhejiang CFMoto Power has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Recreational Products industry. Secondly the value chain collaborators of Zhejiang CFMoto Power have helped the firm to develop new products and bring them quickly to the marketplace.

Organizational Resilience of Zhejiang CFMoto Power

– The covid-19 pandemic has put organizational resilience at the centre of everthing Zhejiang CFMoto Power does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Superior customer experience

– The customer experience strategy of Zhejiang CFMoto Power in Recreational Products industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Effective Research and Development (R&D)

– Zhejiang CFMoto Power has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Zhejiang CFMoto Power staying ahead in the Recreational Products industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Successful track record of launching new products

– Zhejiang CFMoto Power has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Zhejiang CFMoto Power 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.

Low bargaining power of suppliers

– Suppliers of Zhejiang CFMoto Power in the Consumer Cyclical sector have low bargaining power. Zhejiang CFMoto Power has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Zhejiang CFMoto Power to manage not only supply disruptions but also source products at highly competitive prices.

Ability to recruit top talent

– Zhejiang CFMoto Power is one of the leading players in the Recreational Products 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.

Digital Transformation in Recreational Products industry

- digital transformation varies from industry to industry. For Zhejiang CFMoto Power digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Zhejiang CFMoto Power 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.

Sustainable margins compare to other players in Recreational Products industry

– Zhejiang CFMoto Power has clearly differentiated products in the market place. This has enabled Zhejiang CFMoto Power to fetch slight price premium compare to the competitors in the Recreational Products industry. The sustainable margins have also helped Zhejiang CFMoto Power to invest into research and development (R&D) and innovation.

Training and development

– Zhejiang CFMoto Power has one of the best training and development program in Consumer Cyclical 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.

Learning organization

- Zhejiang CFMoto Power 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 CFMoto Power is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Zhejiang CFMoto Power emphasize – knowledge, initiative, and innovation.

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Weaknesses of Zhejiang CFMoto Power | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Zhejiang CFMoto Power are -

High bargaining power of channel partners in Recreational Products industry

– because of the regulatory requirements in China, Zhejiang CFMoto Power is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Recreational Products industry.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Zhejiang CFMoto Power is slow explore the new channels of communication. These new channels of communication can help Zhejiang CFMoto Power to provide better information regarding Recreational Products products and services. It can also build an online community to further reach out to potential customers.

Low market penetration in new markets

– Outside its home market of China, Zhejiang CFMoto Power needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Products dominated business model

– Even though Zhejiang CFMoto Power has some of the most successful models in the Recreational Products industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Zhejiang CFMoto Power should strive to include more intangible value offerings along with its core products and services.

High operating costs

– Compare to the competitors, Zhejiang CFMoto Power has high operating costs in the Recreational Products industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Zhejiang CFMoto Power lucrative customers.

Capital Spending Reduction

– Even during the low interest decade, Zhejiang CFMoto Power 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 Recreational Products industry using digital technology.

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 CFMoto Power supply chain. Even after few cautionary changes, Zhejiang CFMoto Power is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Zhejiang CFMoto Power vulnerable to further global disruptions in South East Asia.

High cash cycle compare to competitors

Zhejiang CFMoto Power has a high cash cycle compare to other players in the Recreational Products industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Ability to respond to the competition

– As the decision making is very deliberative at Zhejiang CFMoto Power, in the dynamic environment of Recreational Products industry it has struggled to respond to the nimble upstart competition. Zhejiang CFMoto Power has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Slow decision making process

– As mentioned earlier in the report, Zhejiang CFMoto Power has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Recreational Products industry over the last five years. Zhejiang CFMoto Power 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.

Slow to strategic competitive environment developments

– As Zhejiang CFMoto Power is one of the leading players in the Recreational Products industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Recreational Products industry in last five years.

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Zhejiang CFMoto Power Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Zhejiang CFMoto Power are -

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 CFMoto Power 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Zhejiang CFMoto Power 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.

Learning at scale

– Online learning technologies has now opened space for Zhejiang CFMoto Power 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.

Building a culture of innovation

– managers at Zhejiang CFMoto Power 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 Recreational Products industry.

Using analytics as competitive advantage

– Zhejiang CFMoto Power has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Recreational Products sector. This continuous investment in analytics has enabled Zhejiang CFMoto Power to build a competitive advantage using analytics. The analytics driven competitive advantage can help Zhejiang CFMoto Power to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Zhejiang CFMoto Power 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 CFMoto Power to hire the very best people irrespective of their geographical location.

Creating value in data economy

– The success of analytics program of Zhejiang CFMoto Power has opened avenues for new revenue streams for the organization in Recreational Products industry. This can help Zhejiang CFMoto Power to build a more holistic ecosystem for Zhejiang CFMoto Power products in the Recreational Products industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Zhejiang CFMoto Power can use these opportunities to build new business models that can help the communities that Zhejiang CFMoto Power operates in. Secondly it can use opportunities from government spending in Recreational Products sector.

Developing new processes and practices

– Zhejiang CFMoto Power can develop new processes and procedures in Recreational Products 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.

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. Zhejiang CFMoto Power can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Use of Bitcoin and other crypto currencies for transactions in Recreational Products industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Zhejiang CFMoto Power in the Recreational Products industry. Now Zhejiang CFMoto Power can target international markets with far fewer capital restrictions requirements than the existing system.

Leveraging digital technologies

– Zhejiang CFMoto Power 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.

Buying journey improvements

– Zhejiang CFMoto Power can improve the customer journey of consumers in the Recreational Products 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.

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Threats Zhejiang CFMoto Power External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Zhejiang CFMoto Power are -

Environmental challenges

– Zhejiang CFMoto Power 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. Zhejiang CFMoto Power can take advantage of this fund but it will also bring new competitors in the Recreational Products industry.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Zhejiang CFMoto Power in Recreational Products industry. The Recreational Products industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.

High dependence on third party suppliers

– Zhejiang CFMoto Power 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 CFMoto Power.

Increasing wage structure of Zhejiang CFMoto Power

– 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 CFMoto Power.

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.

Easy access to finance

– Easy access to finance in Recreational Products industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Zhejiang CFMoto Power can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Technology acceleration in Forth Industrial Revolution

– Zhejiang CFMoto Power has witnessed rapid integration of technology during Covid-19 in the Recreational Products industry. As one of the leading players in the industry, Zhejiang CFMoto Power needs to keep up with the evolution of technology in the Recreational Products 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.

Shortening product life cycle

– it is one of the major threat that Zhejiang CFMoto Power is facing in Recreational Products sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Stagnating economy with rate increase

– Zhejiang CFMoto Power 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 Recreational Products industry.

Technology disruption because of hacks, piracy etc

– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Recreational Products industry are lowering. It can presents Zhejiang CFMoto Power with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Recreational Products sector.

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 CFMoto Power needs to understand the core reasons impacting the Recreational Products industry. This will help it in building a better workplace.

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Weighted SWOT Analysis of Zhejiang CFMoto Power Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Zhejiang CFMoto Power 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 CFMoto Power 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 CFMoto Power 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 CFMoto Power 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 CFMoto Power needs to make to build a sustainable competitive advantage.

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