SWOT Analysis / TOWS Matrix for Hainan Haiqi Transportation (China)
Based on various researches at Oak Spring University , Hainan Haiqi Transportation is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, increasing household debt because of falling income levels, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies,
wage bills are increasing, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Hainan Haiqi Transportation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Hainan Haiqi Transportation can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hainan Haiqi Transportation, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hainan Haiqi Transportation 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 Hainan Haiqi Transportation can be done for the following purposes –
1. Strategic planning of Hainan Haiqi Transportation
2. Improving business portfolio management of Hainan Haiqi Transportation
3. Assessing feasibility of the new initiative in China
4. Making a Misc. Transportation sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hainan Haiqi Transportation
Strengths of Hainan Haiqi Transportation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hainan Haiqi Transportation are -
Analytics focus
– Hainan Haiqi Transportation 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. Transportation 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.
Strong track record of project management in the Misc. Transportation industry
– Hainan Haiqi Transportation is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Misc. Transportation industry
– Hainan Haiqi Transportation has clearly differentiated products in the market place. This has enabled Hainan Haiqi Transportation to fetch slight price premium compare to the competitors in the Misc. Transportation industry. The sustainable margins have also helped Hainan Haiqi Transportation to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Hainan Haiqi Transportation is present in almost all the verticals within the Misc. Transportation industry. This has provided Hainan Haiqi Transportation 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.
Highly skilled collaborators
– Hainan Haiqi Transportation has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Misc. Transportation industry. Secondly the value chain collaborators of Hainan Haiqi Transportation have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Hainan Haiqi Transportation in the Transportation sector have low bargaining power. Hainan Haiqi Transportation has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hainan Haiqi Transportation to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Hainan Haiqi Transportation has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hainan Haiqi Transportation to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Hainan Haiqi Transportation 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 Hainan Haiqi Transportation is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Hainan Haiqi Transportation emphasize – knowledge, initiative, and innovation.
Training and development
– Hainan Haiqi Transportation has one of the best training and development program in Transportation 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.
Digital Transformation in Misc. Transportation industry
- digital transformation varies from industry to industry. For Hainan Haiqi Transportation digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hainan Haiqi Transportation 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.
Ability to recruit top talent
– Hainan Haiqi Transportation is one of the leading players in the Misc. Transportation 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
– Hainan Haiqi Transportation is one of the most innovative firm in Misc. Transportation sector.
Weaknesses of Hainan Haiqi Transportation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hainan Haiqi Transportation are -
Capital Spending Reduction
– Even during the low interest decade, Hainan Haiqi Transportation 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. Transportation industry using digital technology.
Need for greater diversity
– Hainan Haiqi Transportation has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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 Hainan Haiqi Transportation supply chain. Even after few cautionary changes, Hainan Haiqi Transportation is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hainan Haiqi Transportation vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Hainan Haiqi Transportation has a high cash cycle compare to other players in the Misc. Transportation industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High dependence on Hainan Haiqi Transportation ‘s star products
– The top 2 products and services of Hainan Haiqi Transportation still accounts for major business revenue. This dependence on star products in Misc. Transportation industry has resulted into insufficient focus on developing new products, even though Hainan Haiqi Transportation has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of China, Hainan Haiqi Transportation needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Hainan Haiqi Transportation products
– To increase the profitability and margins on the products, Hainan Haiqi Transportation needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee of Hainan Haiqi Transportation is just above the Misc. Transportation 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.
Workers concerns about automation
– As automation is fast increasing in the Misc. Transportation industry, Hainan Haiqi Transportation 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.
Slow to strategic competitive environment developments
– As Hainan Haiqi Transportation is one of the leading players in the Misc. Transportation industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Misc. Transportation industry in last five years.
Ability to respond to the competition
– As the decision making is very deliberative at Hainan Haiqi Transportation, in the dynamic environment of Misc. Transportation industry it has struggled to respond to the nimble upstart competition. Hainan Haiqi Transportation has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Hainan Haiqi Transportation Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Hainan Haiqi Transportation are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Hainan Haiqi Transportation 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 Misc. Transportation industry, but it has also influenced the consumer preferences. Hainan Haiqi Transportation can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Hainan Haiqi Transportation can use the latest technology developments to improve its manufacturing and designing process in Misc. Transportation 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.
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 Hainan Haiqi Transportation 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.
Leveraging digital technologies
– Hainan Haiqi Transportation 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.
Building a culture of innovation
– managers at Hainan Haiqi Transportation 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 Misc. Transportation industry.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hainan Haiqi Transportation in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Misc. Transportation industry, and it will provide faster access to the consumers.
Use of Bitcoin and other crypto currencies for transactions in Misc. Transportation industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Hainan Haiqi Transportation in the Misc. Transportation industry. Now Hainan Haiqi Transportation can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Hainan Haiqi Transportation 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.
Developing new processes and practices
– Hainan Haiqi Transportation can develop new processes and procedures in Misc. Transportation 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.
Better consumer reach
– The expansion of the 5G network will help Hainan Haiqi Transportation to increase its market reach. Hainan Haiqi Transportation 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hainan Haiqi Transportation can use these opportunities to build new business models that can help the communities that Hainan Haiqi Transportation operates in. Secondly it can use opportunities from government spending in Misc. Transportation sector.
Learning at scale
– Online learning technologies has now opened space for Hainan Haiqi Transportation 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 Hainan Haiqi Transportation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Hainan Haiqi Transportation are -
Increasing wage structure of Hainan Haiqi Transportation
– 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 Hainan Haiqi Transportation.
Consumer confidence and its impact on Hainan Haiqi Transportation 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 Misc. Transportation industry and other sectors.
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 Misc. Transportation industry are lowering. It can presents Hainan Haiqi Transportation with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Misc. Transportation sector.
High dependence on third party suppliers
– Hainan Haiqi Transportation 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.
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 Hainan Haiqi Transportation in the Misc. Transportation sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hainan Haiqi Transportation in Misc. Transportation industry. The Misc. Transportation 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Hainan Haiqi Transportation 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. Transportation sector.
Shortening product life cycle
– it is one of the major threat that Hainan Haiqi Transportation is facing in Misc. Transportation sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Misc. Transportation industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Hainan Haiqi Transportation 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. Hainan Haiqi Transportation needs to understand the core reasons impacting the Misc. Transportation 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, Hainan Haiqi Transportation 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 Hainan Haiqi Transportation prominent markets.
Regulatory challenges
– Hainan Haiqi Transportation 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. Transportation industry regulations.
Weighted SWOT Analysis of Hainan Haiqi Transportation Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Hainan Haiqi Transportation 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 Hainan Haiqi Transportation 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 Hainan Haiqi Transportation 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 Hainan Haiqi Transportation 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 Hainan Haiqi Transportation needs to make to build a sustainable competitive advantage.