Shanghai Kinlita Chemical Co (300225) SWOT Analysis / TOWS Matrix / MBA Resources
Chemical Manufacturing
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Shanghai Kinlita Chemical Co (China)
Based on various researches at Oak Spring University , Shanghai Kinlita Chemical Co is operating in a macro-environment that has been destablized by – banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation,
customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, etc
Introduction to SWOT Analysis of Shanghai Kinlita Chemical Co
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Shanghai Kinlita Chemical Co can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shanghai Kinlita Chemical Co, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shanghai Kinlita Chemical Co 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 Shanghai Kinlita Chemical Co can be done for the following purposes –
1. Strategic planning of Shanghai Kinlita Chemical Co
2. Improving business portfolio management of Shanghai Kinlita Chemical Co
3. Assessing feasibility of the new initiative in China
4. Making a Chemical Manufacturing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Shanghai Kinlita Chemical Co
Strengths of Shanghai Kinlita Chemical Co | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shanghai Kinlita Chemical Co are -
Cross disciplinary teams
– Horizontal connected teams at the Shanghai Kinlita Chemical Co 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
– Shanghai Kinlita Chemical Co is one of the leading players in the Chemical Manufacturing 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.
Operational resilience
– The operational resilience strategy of Shanghai Kinlita Chemical Co comprises – understanding the underlying the factors in the Chemical Manufacturing 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.
Innovation driven organization
– Shanghai Kinlita Chemical Co is one of the most innovative firm in Chemical Manufacturing sector.
Diverse revenue streams
– Shanghai Kinlita Chemical Co is present in almost all the verticals within the Chemical Manufacturing industry. This has provided Shanghai Kinlita Chemical Co 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 Shanghai Kinlita Chemical Co in Chemical Manufacturing industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Shanghai Kinlita Chemical Co has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Shanghai Kinlita Chemical Co 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.
Organizational Resilience of Shanghai Kinlita Chemical Co
– The covid-19 pandemic has put organizational resilience at the centre of everthing Shanghai Kinlita Chemical Co does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Shanghai Kinlita Chemical Co 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.
Sustainable margins compare to other players in Chemical Manufacturing industry
– Shanghai Kinlita Chemical Co has clearly differentiated products in the market place. This has enabled Shanghai Kinlita Chemical Co to fetch slight price premium compare to the competitors in the Chemical Manufacturing industry. The sustainable margins have also helped Shanghai Kinlita Chemical Co to invest into research and development (R&D) and innovation.
Learning organization
- Shanghai Kinlita Chemical Co 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 Shanghai Kinlita Chemical Co is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Shanghai Kinlita Chemical Co emphasize – knowledge, initiative, and innovation.
Strong track record of project management in the Chemical Manufacturing industry
– Shanghai Kinlita Chemical Co is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses of Shanghai Kinlita Chemical Co | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shanghai Kinlita Chemical Co are -
High dependence on Shanghai Kinlita Chemical Co ‘s star products
– The top 2 products and services of Shanghai Kinlita Chemical Co still accounts for major business revenue. This dependence on star products in Chemical Manufacturing industry has resulted into insufficient focus on developing new products, even though Shanghai Kinlita Chemical Co has relatively successful track record of launching new products.
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 Shanghai Kinlita Chemical Co supply chain. Even after few cautionary changes, Shanghai Kinlita Chemical Co is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Shanghai Kinlita Chemical Co vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Shanghai Kinlita Chemical Co is dominated by functional specialists. It is not different from other players in the Chemical Manufacturing industry, but Shanghai Kinlita Chemical Co needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Shanghai Kinlita Chemical Co to focus more on services in the Chemical Manufacturing industry rather than just following the product oriented approach.
Lack of clear differentiation of Shanghai Kinlita Chemical Co products
– To increase the profitability and margins on the products, Shanghai Kinlita Chemical Co needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Shanghai Kinlita Chemical Co 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 Chemical Manufacturing industry using digital technology.
No frontier risks strategy
– From the 10K / annual statement of Shanghai Kinlita Chemical Co, it seems that company is thinking out the frontier risks that can impact Chemical Manufacturing 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.
Interest costs
– Compare to the competition, Shanghai Kinlita Chemical Co 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.
Workers concerns about automation
– As automation is fast increasing in the Chemical Manufacturing industry, Shanghai Kinlita Chemical Co 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.
Aligning sales with marketing
– From the outside it seems that Shanghai Kinlita Chemical Co needs to have more collaboration between its sales team and marketing team. Sales professionals in the Chemical Manufacturing industry have deep experience in developing customer relationships. Marketing department at Shanghai Kinlita Chemical Co can leverage the sales team experience to cultivate customer relationships as Shanghai Kinlita Chemical Co is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Shanghai Kinlita Chemical Co has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Chemical Manufacturing industry over the last five years. Shanghai Kinlita Chemical Co 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.
Products dominated business model
– Even though Shanghai Kinlita Chemical Co has some of the most successful models in the Chemical Manufacturing industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Shanghai Kinlita Chemical Co should strive to include more intangible value offerings along with its core products and services.
Shanghai Kinlita Chemical Co Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Shanghai Kinlita Chemical Co are -
Using analytics as competitive advantage
– Shanghai Kinlita Chemical Co has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Chemical Manufacturing sector. This continuous investment in analytics has enabled Shanghai Kinlita Chemical Co to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shanghai Kinlita Chemical Co 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 Chemical Manufacturing industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Shanghai Kinlita Chemical Co in the Chemical Manufacturing industry. Now Shanghai Kinlita Chemical Co can target international markets with far fewer capital restrictions requirements than the existing system.
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. Shanghai Kinlita Chemical Co can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Shanghai Kinlita Chemical Co has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Shanghai Kinlita Chemical Co 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Chemical Manufacturing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Shanghai Kinlita Chemical Co 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. Shanghai Kinlita Chemical Co 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.
Manufacturing automation
– Shanghai Kinlita Chemical Co can use the latest technology developments to improve its manufacturing and designing process in Chemical Manufacturing sector. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Creating value in data economy
– The success of analytics program of Shanghai Kinlita Chemical Co has opened avenues for new revenue streams for the organization in Chemical Manufacturing industry. This can help Shanghai Kinlita Chemical Co to build a more holistic ecosystem for Shanghai Kinlita Chemical Co products in the Chemical Manufacturing 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, Shanghai Kinlita Chemical Co can use these opportunities to build new business models that can help the communities that Shanghai Kinlita Chemical Co operates in. Secondly it can use opportunities from government spending in Chemical Manufacturing sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Chemical Manufacturing industry, but it has also influenced the consumer preferences. Shanghai Kinlita Chemical Co can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Shanghai Kinlita Chemical Co can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Shanghai Kinlita Chemical Co to increase its market reach. Shanghai Kinlita Chemical Co 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, Shanghai Kinlita Chemical Co is facing challenges because of the dominance of functional experts in the organization. Shanghai Kinlita Chemical Co can utilize new technology in the field of Chemical Manufacturing industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats Shanghai Kinlita Chemical Co External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Shanghai Kinlita Chemical Co are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Chemical Manufacturing industry are lowering. It can presents Shanghai Kinlita Chemical Co with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Chemical Manufacturing sector.
Easy access to finance
– Easy access to finance in Chemical Manufacturing industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Shanghai Kinlita Chemical Co can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Shanghai Kinlita Chemical Co needs to understand the core reasons impacting the Chemical Manufacturing industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Shanghai Kinlita Chemical Co 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 Shanghai Kinlita Chemical Co prominent markets.
Increasing wage structure of Shanghai Kinlita Chemical Co
– 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 Shanghai Kinlita Chemical Co.
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 Shanghai Kinlita Chemical Co.
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.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Shanghai Kinlita Chemical Co will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
High dependence on third party suppliers
– Shanghai Kinlita Chemical Co 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Shanghai Kinlita Chemical Co in Chemical Manufacturing industry. The Chemical Manufacturing 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.
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 Shanghai Kinlita Chemical Co business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Shanghai Kinlita Chemical Co has witnessed rapid integration of technology during Covid-19 in the Chemical Manufacturing industry. As one of the leading players in the industry, Shanghai Kinlita Chemical Co needs to keep up with the evolution of technology in the Chemical Manufacturing 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.
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.
Weighted SWOT Analysis of Shanghai Kinlita Chemical Co Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Shanghai Kinlita Chemical Co 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 Shanghai Kinlita Chemical Co 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 Shanghai Kinlita Chemical Co 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 Shanghai Kinlita Chemical Co 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 Shanghai Kinlita Chemical Co needs to make to build a sustainable competitive advantage.
