SWOT Analysis / TOWS Matrix for Suzhou Hycan (China)
Based on various researches at Oak Spring University , Suzhou Hycan is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, increasing commodity prices,
there is increasing trade war between United States & China, increasing energy prices, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Suzhou Hycan can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Suzhou Hycan, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Suzhou Hycan 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 Suzhou Hycan can be done for the following purposes –
1. Strategic planning of Suzhou Hycan
2. Improving business portfolio management of Suzhou Hycan
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 Hycan
Strengths of Suzhou Hycan | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Suzhou Hycan are -
Low bargaining power of suppliers
– Suppliers of Suzhou Hycan in the Basic Materials sector have low bargaining power. Suzhou Hycan has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Suzhou Hycan to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Suzhou Hycan 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 Hycan is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Suzhou Hycan emphasize – knowledge, initiative, and innovation.
High brand equity
– Suzhou Hycan has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Suzhou Hycan to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Containers & Packaging industry
- digital transformation varies from industry to industry. For Suzhou Hycan digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Suzhou Hycan 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.
Organizational Resilience of Suzhou Hycan
– The covid-19 pandemic has put organizational resilience at the centre of everthing Suzhou Hycan does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Suzhou Hycan is present in almost all the verticals within the Containers & Packaging industry. This has provided Suzhou Hycan 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.
High switching costs
– The high switching costs that Suzhou Hycan 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 Hycan 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 Hycan have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Containers & Packaging industry
– Suzhou Hycan has clearly differentiated products in the market place. This has enabled Suzhou Hycan to fetch slight price premium compare to the competitors in the Containers & Packaging industry. The sustainable margins have also helped Suzhou Hycan to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Suzhou Hycan 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.
Operational resilience
– The operational resilience strategy of Suzhou Hycan 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.
Ability to lead change in Containers & Packaging
– Suzhou Hycan is one of the leading players in the Containers & Packaging industry in China. Over the years it has not only transformed the business landscape in the Containers & Packaging industry in China but also across the existing markets. The ability to lead change has enabled Suzhou Hycan in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses of Suzhou Hycan | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Suzhou Hycan are -
Ability to respond to the competition
– As the decision making is very deliberative at Suzhou Hycan, in the dynamic environment of Containers & Packaging industry it has struggled to respond to the nimble upstart competition. Suzhou Hycan has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– From the outside it seems that Suzhou Hycan 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 Hycan can leverage the sales team experience to cultivate customer relationships as Suzhou Hycan is planning to shift buying processes online.
High bargaining power of channel partners in Containers & Packaging industry
– because of the regulatory requirements in China, Suzhou Hycan 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.
Low market penetration in new markets
– Outside its home market of China, Suzhou Hycan needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Suzhou Hycan 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.
Slow to strategic competitive environment developments
– As Suzhou Hycan is one of the leading players in the Containers & Packaging industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Containers & Packaging industry in last five years.
Lack of clear differentiation of Suzhou Hycan products
– To increase the profitability and margins on the products, Suzhou Hycan needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Suzhou Hycan 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 Hycan should strive to include more intangible value offerings along with its core products and services.
Employees’ less understanding of Suzhou Hycan strategy
– From the outside it seems that the employees of Suzhou Hycan 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.
Slow decision making process
– As mentioned earlier in the report, Suzhou Hycan 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 Hycan 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.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Suzhou Hycan supply chain. Even after few cautionary changes, Suzhou Hycan is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Suzhou Hycan vulnerable to further global disruptions in South East Asia.
Suzhou Hycan Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Suzhou Hycan are -
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Containers & Packaging industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Suzhou Hycan 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. Suzhou Hycan 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.
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 Hycan can use these opportunities to build new business models that can help the communities that Suzhou Hycan 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 Hycan has opened avenues for new revenue streams for the organization in Containers & Packaging industry. This can help Suzhou Hycan to build a more holistic ecosystem for Suzhou Hycan products in the Containers & Packaging industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Suzhou Hycan can use the latest technology developments to improve its manufacturing and designing process in Containers & Packaging sector. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Developing new processes and practices
– Suzhou Hycan 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Suzhou Hycan 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.
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 Hycan 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.
Learning at scale
– Online learning technologies has now opened space for Suzhou Hycan 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.
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 Hycan can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Hycan in the Containers & Packaging industry. Now Suzhou Hycan can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Suzhou Hycan can improve the customer journey of consumers in the Containers & Packaging 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.
Better consumer reach
– The expansion of the 5G network will help Suzhou Hycan to increase its market reach. Suzhou Hycan 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.
Leveraging digital technologies
– Suzhou Hycan 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 Suzhou Hycan External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Suzhou Hycan are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Suzhou Hycan in Containers & Packaging industry. The Containers & Packaging industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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 Hycan in the Containers & Packaging sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Suzhou Hycan is facing in Containers & Packaging sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Suzhou Hycan 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 Hycan prominent markets.
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 Suzhou Hycan business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Suzhou Hycan
– 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 Hycan.
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 Hycan can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Environmental challenges
– Suzhou Hycan 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 Hycan can take advantage of this fund but it will also bring new competitors in the Containers & Packaging 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.
Consumer confidence and its impact on Suzhou Hycan 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.
Technology acceleration in Forth Industrial Revolution
– Suzhou Hycan has witnessed rapid integration of technology during Covid-19 in the Containers & Packaging industry. As one of the leading players in the industry, Suzhou Hycan 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.
Stagnating economy with rate increase
– Suzhou Hycan 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 Containers & Packaging industry.
Weighted SWOT Analysis of Suzhou Hycan Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Suzhou Hycan 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 Hycan 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 Hycan 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 Hycan 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 Hycan needs to make to build a sustainable competitive advantage.