Based on various researches at Oak Spring University , Hangzhou Gaoxin Rubber & Plastic is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, geopolitical disruptions, supply chains are disrupted by pandemic , there is backlash against globalization, increasing energy prices,
increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Hangzhou Gaoxin Rubber & Plastic
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Hangzhou Gaoxin Rubber & Plastic can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hangzhou Gaoxin Rubber & Plastic, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hangzhou Gaoxin Rubber & Plastic 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 Hangzhou Gaoxin Rubber & Plastic can be done for the following purposes –
1. Strategic planning of Hangzhou Gaoxin Rubber & Plastic
2. Improving business portfolio management of Hangzhou Gaoxin Rubber & Plastic
3. Assessing feasibility of the new initiative in China
4. Making a Chemicals - Plastics & Rubber sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hangzhou Gaoxin Rubber & Plastic
Strengths of Hangzhou Gaoxin Rubber & Plastic | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hangzhou Gaoxin Rubber & Plastic are -
Operational resilience
– The operational resilience strategy of Hangzhou Gaoxin Rubber & Plastic comprises – understanding the underlying the factors in the Chemicals - Plastics & Rubber 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 recruit top talent
– Hangzhou Gaoxin Rubber & Plastic is one of the leading players in the Chemicals - Plastics & Rubber 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.
Learning organization
- Hangzhou Gaoxin Rubber & Plastic 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 Hangzhou Gaoxin Rubber & Plastic is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Hangzhou Gaoxin Rubber & Plastic emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Hangzhou Gaoxin Rubber & Plastic has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Chemicals - Plastics & Rubber industry. Secondly the value chain collaborators of Hangzhou Gaoxin Rubber & Plastic have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Hangzhou Gaoxin Rubber & Plastic in Chemicals - Plastics & Rubber industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Hangzhou Gaoxin Rubber & Plastic has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hangzhou Gaoxin Rubber & Plastic 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
– Hangzhou Gaoxin Rubber & Plastic 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 Chemicals - Plastics & Rubber 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.
Sustainable margins compare to other players in Chemicals - Plastics & Rubber industry
– Hangzhou Gaoxin Rubber & Plastic has clearly differentiated products in the market place. This has enabled Hangzhou Gaoxin Rubber & Plastic to fetch slight price premium compare to the competitors in the Chemicals - Plastics & Rubber industry. The sustainable margins have also helped Hangzhou Gaoxin Rubber & Plastic to invest into research and development (R&D) and innovation.
Innovation driven organization
– Hangzhou Gaoxin Rubber & Plastic is one of the most innovative firm in Chemicals - Plastics & Rubber sector.
Cross disciplinary teams
– Horizontal connected teams at the Hangzhou Gaoxin Rubber & Plastic 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.
Low bargaining power of suppliers
– Suppliers of Hangzhou Gaoxin Rubber & Plastic in the Basic Materials sector have low bargaining power. Hangzhou Gaoxin Rubber & Plastic has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hangzhou Gaoxin Rubber & Plastic to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Hangzhou Gaoxin Rubber & Plastic has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hangzhou Gaoxin Rubber & Plastic to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of Hangzhou Gaoxin Rubber & Plastic | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hangzhou Gaoxin Rubber & Plastic are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Hangzhou Gaoxin Rubber & Plastic is slow explore the new channels of communication. These new channels of communication can help Hangzhou Gaoxin Rubber & Plastic to provide better information regarding Chemicals - Plastics & Rubber products and services. It can also build an online community to further reach out to potential customers.
High dependence on Hangzhou Gaoxin Rubber & Plastic ‘s star products
– The top 2 products and services of Hangzhou Gaoxin Rubber & Plastic still accounts for major business revenue. This dependence on star products in Chemicals - Plastics & Rubber industry has resulted into insufficient focus on developing new products, even though Hangzhou Gaoxin Rubber & Plastic has relatively successful track record of launching new products.
Need for greater diversity
– Hangzhou Gaoxin Rubber & Plastic 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.
Interest costs
– Compare to the competition, Hangzhou Gaoxin Rubber & Plastic 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.
Compensation and incentives
– The revenue per employee of Hangzhou Gaoxin Rubber & Plastic is just above the Chemicals - Plastics & Rubber 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.
Aligning sales with marketing
– From the outside it seems that Hangzhou Gaoxin Rubber & Plastic needs to have more collaboration between its sales team and marketing team. Sales professionals in the Chemicals - Plastics & Rubber industry have deep experience in developing customer relationships. Marketing department at Hangzhou Gaoxin Rubber & Plastic can leverage the sales team experience to cultivate customer relationships as Hangzhou Gaoxin Rubber & Plastic is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative at Hangzhou Gaoxin Rubber & Plastic, in the dynamic environment of Chemicals - Plastics & Rubber industry it has struggled to respond to the nimble upstart competition. Hangzhou Gaoxin Rubber & Plastic has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Hangzhou Gaoxin Rubber & Plastic has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Chemicals - Plastics & Rubber industry over the last five years. Hangzhou Gaoxin Rubber & Plastic 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 bargaining power of channel partners in Chemicals - Plastics & Rubber industry
– because of the regulatory requirements in China, Hangzhou Gaoxin Rubber & Plastic 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 Chemicals - Plastics & Rubber industry.
Increasing silos among functional specialists
– The organizational structure of Hangzhou Gaoxin Rubber & Plastic is dominated by functional specialists. It is not different from other players in the Chemicals - Plastics & Rubber industry, but Hangzhou Gaoxin Rubber & Plastic needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hangzhou Gaoxin Rubber & Plastic to focus more on services in the Chemicals - Plastics & Rubber industry rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the Chemicals - Plastics & Rubber industry, Hangzhou Gaoxin Rubber & Plastic 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.
Hangzhou Gaoxin Rubber & Plastic Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Hangzhou Gaoxin Rubber & Plastic are -
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 Hangzhou Gaoxin Rubber & Plastic 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hangzhou Gaoxin Rubber & Plastic in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Chemicals - Plastics & Rubber industry, and it will provide faster access to the consumers.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Chemicals - Plastics & Rubber industry, but it has also influenced the consumer preferences. Hangzhou Gaoxin Rubber & Plastic can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Hangzhou Gaoxin Rubber & Plastic 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.
Creating value in data economy
– The success of analytics program of Hangzhou Gaoxin Rubber & Plastic has opened avenues for new revenue streams for the organization in Chemicals - Plastics & Rubber industry. This can help Hangzhou Gaoxin Rubber & Plastic to build a more holistic ecosystem for Hangzhou Gaoxin Rubber & Plastic products in the Chemicals - Plastics & Rubber industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Hangzhou Gaoxin Rubber & Plastic can use the latest technology developments to improve its manufacturing and designing process in Chemicals - Plastics & Rubber 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.
Loyalty marketing
– Hangzhou Gaoxin Rubber & Plastic 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hangzhou Gaoxin Rubber & Plastic 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 Chemicals - Plastics & Rubber industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Hangzhou Gaoxin Rubber & Plastic in the Chemicals - Plastics & Rubber industry. Now Hangzhou Gaoxin Rubber & Plastic can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hangzhou Gaoxin Rubber & Plastic 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 Hangzhou Gaoxin Rubber & Plastic to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Hangzhou Gaoxin Rubber & Plastic can improve the customer journey of consumers in the Chemicals - Plastics & Rubber 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 Hangzhou Gaoxin Rubber & Plastic to increase its market reach. Hangzhou Gaoxin Rubber & Plastic 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.
Using analytics as competitive advantage
– Hangzhou Gaoxin Rubber & Plastic has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Chemicals - Plastics & Rubber sector. This continuous investment in analytics has enabled Hangzhou Gaoxin Rubber & Plastic to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hangzhou Gaoxin Rubber & Plastic to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Hangzhou Gaoxin Rubber & Plastic External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Hangzhou Gaoxin Rubber & Plastic are -
Easy access to finance
– Easy access to finance in Chemicals - Plastics & Rubber industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Hangzhou Gaoxin Rubber & Plastic can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Hangzhou Gaoxin Rubber & Plastic
– 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 Hangzhou Gaoxin Rubber & Plastic.
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.
Shortening product life cycle
– it is one of the major threat that Hangzhou Gaoxin Rubber & Plastic is facing in Chemicals - Plastics & Rubber sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Chemicals - Plastics & Rubber industry are lowering. It can presents Hangzhou Gaoxin Rubber & Plastic with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Chemicals - Plastics & Rubber sector.
Stagnating economy with rate increase
– Hangzhou Gaoxin Rubber & Plastic 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 Chemicals - Plastics & Rubber industry.
Regulatory challenges
– Hangzhou Gaoxin Rubber & Plastic 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 Chemicals - Plastics & Rubber industry regulations.
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 Hangzhou Gaoxin Rubber & Plastic in the Chemicals - Plastics & Rubber sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Hangzhou Gaoxin Rubber & Plastic has witnessed rapid integration of technology during Covid-19 in the Chemicals - Plastics & Rubber industry. As one of the leading players in the industry, Hangzhou Gaoxin Rubber & Plastic needs to keep up with the evolution of technology in the Chemicals - Plastics & Rubber 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.
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. Hangzhou Gaoxin Rubber & Plastic needs to understand the core reasons impacting the Chemicals - Plastics & Rubber industry. This will help it in building a better workplace.
Environmental challenges
– Hangzhou Gaoxin Rubber & Plastic 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. Hangzhou Gaoxin Rubber & Plastic can take advantage of this fund but it will also bring new competitors in the Chemicals - Plastics & Rubber industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hangzhou Gaoxin Rubber & Plastic 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 Hangzhou Gaoxin Rubber & Plastic prominent markets.
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 Hangzhou Gaoxin Rubber & Plastic.
Weighted SWOT Analysis of Hangzhou Gaoxin Rubber & Plastic Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Hangzhou Gaoxin Rubber & Plastic 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 Hangzhou Gaoxin Rubber & Plastic 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 Hangzhou Gaoxin Rubber & Plastic 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 Hangzhou Gaoxin Rubber & Plastic 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 Hangzhou Gaoxin Rubber & Plastic needs to make to build a sustainable competitive advantage.