Suzhou Yangtze New Materials (2652) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Suzhou Yangtze New Materials (China)

Based on various researches at Oak Spring University , Suzhou Yangtze New Materials is operating in a macro-environment that has been destablized by – cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, there is backlash against globalization, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, etc

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Introduction to SWOT Analysis of Suzhou Yangtze New Materials

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Suzhou Yangtze New Materials can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Suzhou Yangtze New Materials, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Suzhou Yangtze New Materials 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Suzhou Yangtze New Materials can be done for the following purposes –
1. Strategic planning of Suzhou Yangtze New Materials
2. Improving business portfolio management of Suzhou Yangtze New Materials
3. Assessing feasibility of the new initiative in China
4. Making a Containers & Packaging sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Suzhou Yangtze New Materials

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Strengths of Suzhou Yangtze New Materials | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Suzhou Yangtze New Materials are -

Low bargaining power of suppliers

– Suppliers of Suzhou Yangtze New Materials in the Basic Materials sector have low bargaining power. Suzhou Yangtze New Materials has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Suzhou Yangtze New Materials to manage not only supply disruptions but also source products at highly competitive prices.

Effective Research and Development (R&D)

– Suzhou Yangtze New Materials has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Suzhou Yangtze New Materials staying ahead in the Containers & Packaging industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

High switching costs

– The high switching costs that Suzhou Yangtze New Materials 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.

Highly skilled collaborators

– Suzhou Yangtze New Materials has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Containers & Packaging industry. Secondly the value chain collaborators of Suzhou Yangtze New Materials have helped the firm to develop new products and bring them quickly to the marketplace.

Learning organization

- Suzhou Yangtze New Materials 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 Suzhou Yangtze New Materials is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Suzhou Yangtze New Materials emphasize – knowledge, initiative, and innovation.

Cross disciplinary teams

– Horizontal connected teams at the Suzhou Yangtze New Materials 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.

Superior customer experience

– The customer experience strategy of Suzhou Yangtze New Materials in Containers & Packaging industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Innovation driven organization

– Suzhou Yangtze New Materials is one of the most innovative firm in Containers & Packaging sector.

Digital Transformation in Containers & Packaging industry

- digital transformation varies from industry to industry. For Suzhou Yangtze New Materials digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Suzhou Yangtze New Materials 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.

Operational resilience

– The operational resilience strategy of Suzhou Yangtze New Materials comprises – understanding the underlying the factors in the Containers & Packaging 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.

Successful track record of launching new products

– Suzhou Yangtze New Materials has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Suzhou Yangtze New Materials 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.

Analytics focus

– Suzhou Yangtze New Materials 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 Containers & Packaging 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.

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Weaknesses of Suzhou Yangtze New Materials | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Suzhou Yangtze New Materials are -

Aligning sales with marketing

– From the outside it seems that Suzhou Yangtze New Materials needs to have more collaboration between its sales team and marketing team. Sales professionals in the Containers & Packaging industry have deep experience in developing customer relationships. Marketing department at Suzhou Yangtze New Materials can leverage the sales team experience to cultivate customer relationships as Suzhou Yangtze New Materials is planning to shift buying processes online.

Skills based hiring in Containers & Packaging industry

– The stress on hiring functional specialists at Suzhou Yangtze New Materials 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.

Ability to respond to the competition

– As the decision making is very deliberative at Suzhou Yangtze New Materials, in the dynamic environment of Containers & Packaging industry it has struggled to respond to the nimble upstart competition. Suzhou Yangtze New Materials has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Lack of clear differentiation of Suzhou Yangtze New Materials products

– To increase the profitability and margins on the products, Suzhou Yangtze New Materials needs to provide more differentiated products than what it is currently offering in the marketplace.

Slow decision making process

– As mentioned earlier in the report, Suzhou Yangtze New Materials has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Containers & Packaging industry over the last five years. Suzhou Yangtze New Materials 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.

Capital Spending Reduction

– Even during the low interest decade, Suzhou Yangtze New Materials 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 Containers & Packaging industry using digital technology.

Interest costs

– Compare to the competition, Suzhou Yangtze New Materials has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.

High operating costs

– Compare to the competitors, Suzhou Yangtze New Materials has high operating costs in the Containers & Packaging industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Suzhou Yangtze New Materials lucrative customers.

High bargaining power of channel partners in Containers & Packaging industry

– because of the regulatory requirements in China, Suzhou Yangtze New Materials 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 Containers & Packaging industry.

Increasing silos among functional specialists

– The organizational structure of Suzhou Yangtze New Materials is dominated by functional specialists. It is not different from other players in the Containers & Packaging industry, but Suzhou Yangtze New Materials needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Suzhou Yangtze New Materials to focus more on services in the Containers & Packaging industry rather than just following the product oriented approach.

Products dominated business model

– Even though Suzhou Yangtze New Materials has some of the most successful models in the Containers & Packaging industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Suzhou Yangtze New Materials should strive to include more intangible value offerings along with its core products and services.

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Suzhou Yangtze New Materials Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Suzhou Yangtze New Materials are -

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Suzhou Yangtze New Materials 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

– Suzhou Yangtze New Materials can develop new processes and procedures in Containers & Packaging 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Suzhou Yangtze New Materials can use these opportunities to build new business models that can help the communities that Suzhou Yangtze New Materials operates in. Secondly it can use opportunities from government spending in Containers & Packaging sector.

Creating value in data economy

– The success of analytics program of Suzhou Yangtze New Materials has opened avenues for new revenue streams for the organization in Containers & Packaging industry. This can help Suzhou Yangtze New Materials to build a more holistic ecosystem for Suzhou Yangtze New Materials products in the Containers & Packaging industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Suzhou Yangtze New Materials 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 Suzhou Yangtze New Materials to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Low interest rates

– Even though inflation is raising its head in most developed economies, Suzhou Yangtze New Materials 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.

Use of Bitcoin and other crypto currencies for transactions in Containers & Packaging industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Suzhou Yangtze New Materials in the Containers & Packaging industry. Now Suzhou Yangtze New Materials can target international markets with far fewer capital restrictions requirements than the existing system.

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 Suzhou Yangtze New Materials 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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Suzhou Yangtze New Materials 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 Suzhou Yangtze New Materials to hire the very best people irrespective of their geographical location.

Loyalty marketing

– Suzhou Yangtze New Materials 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Suzhou Yangtze New Materials in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Containers & Packaging industry, and it will provide faster access to the consumers.

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. Suzhou Yangtze New Materials 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 Containers & Packaging industry, but it has also influenced the consumer preferences. Suzhou Yangtze New Materials can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

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Threats Suzhou Yangtze New Materials External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Suzhou Yangtze New Materials are -

Technology acceleration in Forth Industrial Revolution

– Suzhou Yangtze New Materials has witnessed rapid integration of technology during Covid-19 in the Containers & Packaging industry. As one of the leading players in the industry, Suzhou Yangtze New Materials needs to keep up with the evolution of technology in the Containers & Packaging 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.

Shortening product life cycle

– it is one of the major threat that Suzhou Yangtze New Materials is facing in Containers & Packaging sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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 Suzhou Yangtze New Materials.

Consumer confidence and its impact on Suzhou Yangtze New Materials 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 Containers & Packaging industry and other sectors.

Environmental challenges

– Suzhou Yangtze New Materials 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. Suzhou Yangtze New Materials can take advantage of this fund but it will also bring new competitors in the Containers & Packaging industry.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Suzhou Yangtze New Materials 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 Suzhou Yangtze New Materials prominent markets.

Regulatory challenges

– Suzhou Yangtze New Materials 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 Containers & Packaging industry regulations.

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. Suzhou Yangtze New Materials 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.

Increasing wage structure of Suzhou Yangtze New Materials

– 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 Suzhou Yangtze New Materials.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Containers & Packaging industry are lowering. It can presents Suzhou Yangtze New Materials with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Containers & Packaging 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 Suzhou Yangtze New Materials in the Containers & Packaging sector and impact the bottomline of the organization.

Easy access to finance

– Easy access to finance in Containers & Packaging industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Suzhou Yangtze New Materials can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

High dependence on third party suppliers

– Suzhou Yangtze New Materials 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.

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Weighted SWOT Analysis of Suzhou Yangtze New Materials Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Suzhou Yangtze New Materials 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 Suzhou Yangtze New Materials 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 Suzhou Yangtze New Materials 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 Suzhou Yangtze New Materials 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 Suzhou Yangtze New Materials needs to make to build a sustainable competitive advantage.

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