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 – competitive advantages are harder to sustain because of technology dispersion, technology disruption, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, increasing household debt because of falling income levels,
increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, 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 -
Learning organization
- Anhui Zhonghuan Environmental 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 Anhui Zhonghuan Environmental is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Anhui Zhonghuan Environmental emphasize – knowledge, initiative, and innovation.
High brand equity
– Anhui Zhonghuan Environmental has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Anhui Zhonghuan Environmental to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
Organizational Resilience of Anhui Zhonghuan Environmental
– The covid-19 pandemic has put organizational resilience at the centre of everthing Anhui Zhonghuan Environmental does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
High switching costs
– The high switching costs that Anhui Zhonghuan Environmental 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.
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.
Operational resilience
– The operational resilience strategy of Anhui Zhonghuan Environmental comprises – understanding the underlying the factors in the Waste Management Services 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.
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.
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.
Training and development
– Anhui Zhonghuan Environmental has one of the best training and development program in Services 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.
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 -
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.
Aligning sales with marketing
– From the outside it seems that Anhui Zhonghuan Environmental needs to have more collaboration between its sales team and marketing team. Sales professionals in the Waste Management Services industry have deep experience in developing customer relationships. Marketing department at Anhui Zhonghuan Environmental can leverage the sales team experience to cultivate customer relationships as Anhui Zhonghuan Environmental is planning to shift buying processes online.
High operating costs
– Compare to the competitors, Anhui Zhonghuan Environmental has high operating costs in the Waste Management Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Anhui Zhonghuan Environmental lucrative customers.
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.
Workers concerns about automation
– As automation is fast increasing in the Waste Management Services industry, Anhui Zhonghuan Environmental 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.
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 cash cycle compare to competitors
Anhui Zhonghuan Environmental has a high cash cycle compare to other players in the Waste Management Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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.
Need for greater diversity
– Anhui Zhonghuan Environmental 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.
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.
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.
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 -
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Anhui Zhonghuan Environmental can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help Anhui Zhonghuan Environmental to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
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.
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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Waste Management Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Anhui Zhonghuan Environmental 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. Anhui Zhonghuan Environmental 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.
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.
Building a culture of innovation
– managers at Anhui Zhonghuan Environmental 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 Waste Management Services industry.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Anhui Zhonghuan Environmental to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Anhui Zhonghuan Environmental to hire the very best people irrespective of their geographical location.
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.
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.
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 -
Stagnating economy with rate increase
– Anhui Zhonghuan Environmental can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the Waste Management Services industry.
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.
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. Anhui Zhonghuan Environmental needs to understand the core reasons impacting the Waste Management Services industry. This will help it in building a better workplace.
Increasing wage structure of Anhui Zhonghuan Environmental
– 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 Anhui Zhonghuan Environmental.
Shortening product life cycle
– it is one of the major threat that Anhui Zhonghuan Environmental is facing in Waste Management Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
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.
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 Anhui Zhonghuan Environmental business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
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.
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.
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.