Chengdu Haoneng Tech A (603809) SWOT Analysis / TOWS Matrix / MBA Resources
Auto & Truck Parts
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Chengdu Haoneng Tech A (China)
Based on various researches at Oak Spring University , Chengdu Haoneng Tech A is operating in a macro-environment that has been destablized by – cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs,
geopolitical disruptions, wage bills are increasing, etc
Introduction to SWOT Analysis of Chengdu Haoneng Tech A
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Chengdu Haoneng Tech A can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Chengdu Haoneng Tech A, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Chengdu Haoneng Tech A operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Chengdu Haoneng Tech A can be done for the following purposes –
1. Strategic planning of Chengdu Haoneng Tech A
2. Improving business portfolio management of Chengdu Haoneng Tech A
3. Assessing feasibility of the new initiative in China
4. Making a Auto & Truck Parts sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Chengdu Haoneng Tech A
Strengths of Chengdu Haoneng Tech A | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Chengdu Haoneng Tech A are -
Cross disciplinary teams
– Horizontal connected teams at the Chengdu Haoneng Tech A are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Analytics focus
– Chengdu Haoneng Tech A 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 Auto & Truck Parts 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.
Diverse revenue streams
– Chengdu Haoneng Tech A is present in almost all the verticals within the Auto & Truck Parts industry. This has provided Chengdu Haoneng Tech A a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Successful track record of launching new products
– Chengdu Haoneng Tech A has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Chengdu Haoneng Tech A has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Sustainable margins compare to other players in Auto & Truck Parts industry
– Chengdu Haoneng Tech A has clearly differentiated products in the market place. This has enabled Chengdu Haoneng Tech A to fetch slight price premium compare to the competitors in the Auto & Truck Parts industry. The sustainable margins have also helped Chengdu Haoneng Tech A to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Chengdu Haoneng Tech A is one of the leading players in the Auto & Truck Parts industry in China. It is in a position to attract the best talent available in China. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Chengdu Haoneng Tech A is one of the most innovative firm in Auto & Truck Parts sector.
Superior customer experience
– The customer experience strategy of Chengdu Haoneng Tech A in Auto & Truck Parts industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Auto & Truck Parts
– Chengdu Haoneng Tech A is one of the leading players in the Auto & Truck Parts industry in China. Over the years it has not only transformed the business landscape in the Auto & Truck Parts industry in China but also across the existing markets. The ability to lead change has enabled Chengdu Haoneng Tech A in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Chengdu Haoneng Tech A in the Consumer Cyclical sector have low bargaining power. Chengdu Haoneng Tech A has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Chengdu Haoneng Tech A to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Chengdu Haoneng Tech A has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Chengdu Haoneng Tech A to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Chengdu Haoneng Tech A has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Weaknesses of Chengdu Haoneng Tech A | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Chengdu Haoneng Tech A are -
High cash cycle compare to competitors
Chengdu Haoneng Tech A has a high cash cycle compare to other players in the Auto & Truck Parts industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Employees’ less understanding of Chengdu Haoneng Tech A strategy
– From the outside it seems that the employees of Chengdu Haoneng Tech A 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.
Increasing silos among functional specialists
– The organizational structure of Chengdu Haoneng Tech A is dominated by functional specialists. It is not different from other players in the Auto & Truck Parts industry, but Chengdu Haoneng Tech A needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Chengdu Haoneng Tech A to focus more on services in the Auto & Truck Parts industry rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Chengdu Haoneng Tech A has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Auto & Truck Parts industry using digital technology.
High operating costs
– Compare to the competitors, Chengdu Haoneng Tech A has high operating costs in the Auto & Truck Parts industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Chengdu Haoneng Tech A lucrative customers.
Low market penetration in new markets
– Outside its home market of China, Chengdu Haoneng Tech A needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative at Chengdu Haoneng Tech A, in the dynamic environment of Auto & Truck Parts industry it has struggled to respond to the nimble upstart competition. Chengdu Haoneng Tech A has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the Auto & Truck Parts industry, Chengdu Haoneng Tech A 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 decision making process
– As mentioned earlier in the report, Chengdu Haoneng Tech A has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Auto & Truck Parts industry over the last five years. Chengdu Haoneng Tech A even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Lack of clear differentiation of Chengdu Haoneng Tech A products
– To increase the profitability and margins on the products, Chengdu Haoneng Tech A needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Chengdu Haoneng Tech A is slow explore the new channels of communication. These new channels of communication can help Chengdu Haoneng Tech A to provide better information regarding Auto & Truck Parts products and services. It can also build an online community to further reach out to potential customers.
Chengdu Haoneng Tech A Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Chengdu Haoneng Tech A are -
Use of Bitcoin and other crypto currencies for transactions in Auto & Truck Parts industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Chengdu Haoneng Tech A in the Auto & Truck Parts industry. Now Chengdu Haoneng Tech A can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Chengdu Haoneng Tech A can improve the customer journey of consumers in the Auto & Truck Parts 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.
Developing new processes and practices
– Chengdu Haoneng Tech A can develop new processes and procedures in Auto & Truck Parts industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Chengdu Haoneng Tech A in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Auto & Truck Parts industry, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Chengdu Haoneng Tech A can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Learning at scale
– Online learning technologies has now opened space for Chengdu Haoneng Tech A to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Chengdu Haoneng Tech A can use these opportunities to build new business models that can help the communities that Chengdu Haoneng Tech A operates in. Secondly it can use opportunities from government spending in Auto & Truck Parts sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Auto & Truck Parts industry, but it has also influenced the consumer preferences. Chengdu Haoneng Tech A can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Chengdu Haoneng Tech A has opened avenues for new revenue streams for the organization in Auto & Truck Parts industry. This can help Chengdu Haoneng Tech A to build a more holistic ecosystem for Chengdu Haoneng Tech A products in the Auto & Truck Parts industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Chengdu Haoneng Tech A is facing challenges because of the dominance of functional experts in the organization. Chengdu Haoneng Tech A can utilize new technology in the field of Auto & Truck Parts industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Better consumer reach
– The expansion of the 5G network will help Chengdu Haoneng Tech A to increase its market reach. Chengdu Haoneng Tech A 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.
Loyalty marketing
– Chengdu Haoneng Tech A 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.
Building a culture of innovation
– managers at Chengdu Haoneng Tech A can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Auto & Truck Parts industry.
Threats Chengdu Haoneng Tech A External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Chengdu Haoneng Tech A are -
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Chengdu Haoneng Tech A needs to understand the core reasons impacting the Auto & Truck Parts industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Chengdu Haoneng Tech A may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Auto & Truck Parts sector.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Chengdu Haoneng Tech A in the Auto & Truck Parts sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in Auto & Truck Parts industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Chengdu Haoneng Tech A 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
– Chengdu Haoneng Tech A has witnessed rapid integration of technology during Covid-19 in the Auto & Truck Parts industry. As one of the leading players in the industry, Chengdu Haoneng Tech A needs to keep up with the evolution of technology in the Auto & Truck Parts 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.
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. Chengdu Haoneng Tech A 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.
Shortening product life cycle
– it is one of the major threat that Chengdu Haoneng Tech A is facing in Auto & Truck Parts sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Auto & Truck Parts industry are lowering. It can presents Chengdu Haoneng Tech A with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Auto & Truck Parts sector.
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 Chengdu Haoneng Tech A.
Regulatory challenges
– Chengdu Haoneng Tech A needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Auto & Truck Parts industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Chengdu Haoneng Tech A can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate Chengdu Haoneng Tech A prominent markets.
Increasing wage structure of Chengdu Haoneng Tech A
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Chengdu Haoneng Tech A.
High dependence on third party suppliers
– Chengdu Haoneng Tech A high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Weighted SWOT Analysis of Chengdu Haoneng Tech A Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Chengdu Haoneng Tech A needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of Chengdu Haoneng Tech A is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of Chengdu Haoneng Tech A is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Chengdu Haoneng Tech A to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Chengdu Haoneng Tech A needs to make to build a sustainable competitive advantage.