SWOT Analysis / TOWS Matrix for Anhui Zhonghuan Environmental (China)
Based on various researches at Oak Spring University , Anhui Zhonghuan Environmental is operating in a macro-environment that has been destablized by – supply chains are disrupted by pandemic , there is increasing trade war between United States & China, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, increasing commodity prices,
competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Anhui Zhonghuan Environmental
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Anhui Zhonghuan Environmental can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Anhui Zhonghuan Environmental, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Anhui Zhonghuan Environmental 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 Anhui Zhonghuan Environmental can be done for the following purposes –
1. Strategic planning of Anhui Zhonghuan Environmental
2. Improving business portfolio management of Anhui Zhonghuan Environmental
3. Assessing feasibility of the new initiative in China
4. Making a Waste Management Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Anhui Zhonghuan Environmental
Strengths of Anhui Zhonghuan Environmental | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Anhui Zhonghuan Environmental are -
Low bargaining power of suppliers
– Suppliers of Anhui Zhonghuan Environmental in the Services sector have low bargaining power. Anhui Zhonghuan Environmental has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Anhui Zhonghuan Environmental to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Waste Management Services industry
– Anhui Zhonghuan Environmental has clearly differentiated products in the market place. This has enabled Anhui Zhonghuan Environmental to fetch slight price premium compare to the competitors in the Waste Management Services industry. The sustainable margins have also helped Anhui Zhonghuan Environmental to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Anhui Zhonghuan Environmental is one of the leading players in the Waste Management Services 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
– Anhui Zhonghuan Environmental is one of the most innovative firm in Waste Management Services sector.
Highly skilled collaborators
– Anhui Zhonghuan Environmental has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Waste Management Services industry. Secondly the value chain collaborators of Anhui Zhonghuan Environmental have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Anhui Zhonghuan Environmental has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Anhui Zhonghuan Environmental 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.
Strong track record of project management in the Waste Management Services industry
– Anhui Zhonghuan Environmental is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Anhui Zhonghuan Environmental 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 Waste Management Services 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.
Ability to lead change in Waste Management Services
– Anhui Zhonghuan Environmental is one of the leading players in the Waste Management Services industry in China. Over the years it has not only transformed the business landscape in the Waste Management Services industry in China but also across the existing markets. The ability to lead change has enabled Anhui Zhonghuan Environmental in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Waste Management Services industry
- digital transformation varies from industry to industry. For Anhui Zhonghuan Environmental digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Anhui Zhonghuan Environmental 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.
Effective Research and Development (R&D)
– Anhui Zhonghuan Environmental has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Anhui Zhonghuan Environmental staying ahead in the Waste Management Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Anhui Zhonghuan Environmental is present in almost all the verticals within the Waste Management Services industry. This has provided Anhui Zhonghuan Environmental 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.
Weaknesses of Anhui Zhonghuan Environmental | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Anhui Zhonghuan Environmental are -
No frontier risks strategy
– From the 10K / annual statement of Anhui Zhonghuan Environmental, it seems that company is thinking out the frontier risks that can impact Waste Management Services 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.
Slow decision making process
– As mentioned earlier in the report, Anhui Zhonghuan Environmental has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Waste Management Services industry over the last five years. Anhui Zhonghuan Environmental 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.
Compensation and incentives
– The revenue per employee of Anhui Zhonghuan Environmental is just above the Waste Management Services 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.
High bargaining power of channel partners in Waste Management Services industry
– because of the regulatory requirements in China, Anhui Zhonghuan Environmental 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 Waste Management Services industry.
Lack of clear differentiation of Anhui Zhonghuan Environmental products
– To increase the profitability and margins on the products, Anhui Zhonghuan Environmental needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Anhui Zhonghuan Environmental is dominated by functional specialists. It is not different from other players in the Waste Management Services industry, but Anhui Zhonghuan Environmental needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Anhui Zhonghuan Environmental to focus more on services in the Waste Management Services industry rather than just following the product oriented approach.
Employees’ less understanding of Anhui Zhonghuan Environmental strategy
– From the outside it seems that the employees of Anhui Zhonghuan Environmental 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.
High dependence on Anhui Zhonghuan Environmental ‘s star products
– The top 2 products and services of Anhui Zhonghuan Environmental still accounts for major business revenue. This dependence on star products in Waste Management Services industry has resulted into insufficient focus on developing new products, even though Anhui Zhonghuan Environmental has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Anhui Zhonghuan Environmental 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 Waste Management Services industry using digital technology.
Ability to respond to the competition
– As the decision making is very deliberative at Anhui Zhonghuan Environmental, in the dynamic environment of Waste Management Services industry it has struggled to respond to the nimble upstart competition. Anhui Zhonghuan Environmental has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring in Waste Management Services industry
– The stress on hiring functional specialists at Anhui Zhonghuan Environmental has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Anhui Zhonghuan Environmental Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Anhui Zhonghuan Environmental are -
Better consumer reach
– The expansion of the 5G network will help Anhui Zhonghuan Environmental to increase its market reach. Anhui Zhonghuan Environmental 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.
Developing new processes and practices
– Anhui Zhonghuan Environmental can develop new processes and procedures in Waste Management Services 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.
Buying journey improvements
– Anhui Zhonghuan Environmental can improve the customer journey of consumers in the Waste Management Services 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.
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. Anhui Zhonghuan Environmental can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Waste Management Services industry, but it has also influenced the consumer preferences. Anhui Zhonghuan Environmental can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Anhui Zhonghuan Environmental is facing challenges because of the dominance of functional experts in the organization. Anhui Zhonghuan Environmental can utilize new technology in the field of Waste Management Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Using analytics as competitive advantage
– Anhui Zhonghuan Environmental has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Waste Management Services sector. This continuous investment in analytics has enabled Anhui Zhonghuan Environmental to build a competitive advantage using analytics. The analytics driven competitive advantage can help Anhui Zhonghuan Environmental to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Anhui Zhonghuan Environmental can use these opportunities to build new business models that can help the communities that Anhui Zhonghuan Environmental operates in. Secondly it can use opportunities from government spending in Waste Management Services sector.
Loyalty marketing
– Anhui Zhonghuan Environmental 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.
Use of Bitcoin and other crypto currencies for transactions in Waste Management Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Anhui Zhonghuan Environmental in the Waste Management Services industry. Now Anhui Zhonghuan Environmental can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Anhui Zhonghuan Environmental in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Waste Management Services industry, and it will provide faster access to the consumers.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Anhui Zhonghuan Environmental can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Anhui Zhonghuan Environmental 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.
Threats Anhui Zhonghuan Environmental External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Anhui Zhonghuan Environmental are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Anhui Zhonghuan Environmental may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Waste Management Services sector.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Anhui Zhonghuan Environmental 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 Anhui Zhonghuan Environmental prominent markets.
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 Anhui Zhonghuan Environmental in the Waste Management Services sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Anhui Zhonghuan Environmental 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.
Environmental challenges
– Anhui Zhonghuan Environmental 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. Anhui Zhonghuan Environmental can take advantage of this fund but it will also bring new competitors in the Waste Management Services 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.
Easy access to finance
– Easy access to finance in Waste Management Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Anhui Zhonghuan Environmental can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Anhui Zhonghuan Environmental.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Waste Management Services industry are lowering. It can presents Anhui Zhonghuan Environmental with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Waste Management Services sector.
Technology acceleration in Forth Industrial Revolution
– Anhui Zhonghuan Environmental has witnessed rapid integration of technology during Covid-19 in the Waste Management Services industry. As one of the leading players in the industry, Anhui Zhonghuan Environmental needs to keep up with the evolution of technology in the Waste Management Services 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.
Consumer confidence and its impact on Anhui Zhonghuan Environmental 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 Waste Management Services industry and other sectors.
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. Anhui Zhonghuan Environmental 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.
Weighted SWOT Analysis of Anhui Zhonghuan Environmental Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Anhui Zhonghuan Environmental 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 Anhui Zhonghuan Environmental 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 Anhui Zhonghuan Environmental 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 Anhui Zhonghuan Environmental 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 Anhui Zhonghuan Environmental needs to make to build a sustainable competitive advantage.
