Wuxi Honghui New Materials Tech (2802) SWOT Analysis / TOWS Matrix / MBA Resources
Chemicals - Plastics & Rubber
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Wuxi Honghui New Materials Tech (China)
Based on various researches at Oak Spring University , Wuxi Honghui New Materials Tech is operating in a macro-environment that has been destablized by – supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings,
increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Wuxi Honghui New Materials Tech
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Wuxi Honghui New Materials Tech can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Wuxi Honghui New Materials Tech, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Wuxi Honghui New Materials Tech 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 Wuxi Honghui New Materials Tech can be done for the following purposes –
1. Strategic planning of Wuxi Honghui New Materials Tech
2. Improving business portfolio management of Wuxi Honghui New Materials Tech
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 Wuxi Honghui New Materials Tech
Strengths of Wuxi Honghui New Materials Tech | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Wuxi Honghui New Materials Tech are -
Ability to lead change in Chemicals - Plastics & Rubber
– Wuxi Honghui New Materials Tech is one of the leading players in the Chemicals - Plastics & Rubber industry in China. Over the years it has not only transformed the business landscape in the Chemicals - Plastics & Rubber industry in China but also across the existing markets. The ability to lead change has enabled Wuxi Honghui New Materials Tech in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Wuxi Honghui New Materials Tech 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.
Effective Research and Development (R&D)
– Wuxi Honghui New Materials Tech has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Wuxi Honghui New Materials Tech staying ahead in the Chemicals - Plastics & Rubber industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Wuxi Honghui New Materials Tech has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Wuxi Honghui New Materials Tech 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.
Sustainable margins compare to other players in Chemicals - Plastics & Rubber industry
– Wuxi Honghui New Materials Tech has clearly differentiated products in the market place. This has enabled Wuxi Honghui New Materials Tech to fetch slight price premium compare to the competitors in the Chemicals - Plastics & Rubber industry. The sustainable margins have also helped Wuxi Honghui New Materials Tech to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Wuxi Honghui New Materials Tech 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.
Superior customer experience
– The customer experience strategy of Wuxi Honghui New Materials Tech in Chemicals - Plastics & Rubber industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Wuxi Honghui New Materials Tech 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.
Analytics focus
– Wuxi Honghui New Materials Tech 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.
Training and development
– Wuxi Honghui New Materials Tech has one of the best training and development program in Basic Materials 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.
Digital Transformation in Chemicals - Plastics & Rubber industry
- digital transformation varies from industry to industry. For Wuxi Honghui New Materials Tech digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Wuxi Honghui New Materials Tech 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.
High brand equity
– Wuxi Honghui New Materials Tech has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Wuxi Honghui New Materials Tech to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of Wuxi Honghui New Materials Tech | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Wuxi Honghui New Materials Tech are -
Aligning sales with marketing
– From the outside it seems that Wuxi Honghui New Materials Tech 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 Wuxi Honghui New Materials Tech can leverage the sales team experience to cultivate customer relationships as Wuxi Honghui New Materials Tech is planning to shift buying processes online.
High operating costs
– Compare to the competitors, Wuxi Honghui New Materials Tech has high operating costs in the Chemicals - Plastics & Rubber industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Wuxi Honghui New Materials Tech lucrative customers.
Products dominated business model
– Even though Wuxi Honghui New Materials Tech has some of the most successful models in the Chemicals - Plastics & Rubber industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Wuxi Honghui New Materials Tech should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Wuxi Honghui New Materials Tech is slow explore the new channels of communication. These new channels of communication can help Wuxi Honghui New Materials Tech 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.
Low market penetration in new markets
– Outside its home market of China, Wuxi Honghui New Materials Tech needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Wuxi Honghui New Materials Tech supply chain. Even after few cautionary changes, Wuxi Honghui New Materials Tech is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Wuxi Honghui New Materials Tech vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Wuxi Honghui New Materials Tech 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. Wuxi Honghui New Materials Tech 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.
Need for greater diversity
– Wuxi Honghui New Materials Tech 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.
High cash cycle compare to competitors
Wuxi Honghui New Materials Tech has a high cash cycle compare to other players in the Chemicals - Plastics & Rubber industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Interest costs
– Compare to the competition, Wuxi Honghui New Materials Tech 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.
Ability to respond to the competition
– As the decision making is very deliberative at Wuxi Honghui New Materials Tech, in the dynamic environment of Chemicals - Plastics & Rubber industry it has struggled to respond to the nimble upstart competition. Wuxi Honghui New Materials Tech has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Wuxi Honghui New Materials Tech Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Wuxi Honghui New Materials Tech are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Wuxi Honghui New Materials Tech 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 Wuxi Honghui New Materials Tech to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Wuxi Honghui New Materials Tech 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 Wuxi Honghui New Materials Tech to build a competitive advantage using analytics. The analytics driven competitive advantage can help Wuxi Honghui New Materials Tech to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Wuxi Honghui New Materials Tech to increase its market reach. Wuxi Honghui New Materials Tech 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Wuxi Honghui New Materials Tech is facing challenges because of the dominance of functional experts in the organization. Wuxi Honghui New Materials Tech can utilize new technology in the field of Chemicals - Plastics & Rubber industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Wuxi Honghui New Materials Tech 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.
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. Wuxi Honghui New Materials Tech can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Wuxi Honghui New Materials Tech 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.
Creating value in data economy
– The success of analytics program of Wuxi Honghui New Materials Tech has opened avenues for new revenue streams for the organization in Chemicals - Plastics & Rubber industry. This can help Wuxi Honghui New Materials Tech to build a more holistic ecosystem for Wuxi Honghui New Materials Tech products in the Chemicals - Plastics & Rubber industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Wuxi Honghui New Materials Tech can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Wuxi Honghui New Materials Tech in the Chemicals - Plastics & Rubber industry. Now Wuxi Honghui New Materials Tech can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Wuxi Honghui New Materials Tech 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 Chemicals - Plastics & Rubber industry.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Wuxi Honghui New Materials Tech can use these opportunities to build new business models that can help the communities that Wuxi Honghui New Materials Tech operates in. Secondly it can use opportunities from government spending in Chemicals - Plastics & Rubber sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Wuxi Honghui New Materials Tech 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 Wuxi Honghui New Materials Tech to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Wuxi Honghui New Materials Tech External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Wuxi Honghui New Materials Tech are -
Shortening product life cycle
– it is one of the major threat that Wuxi Honghui New Materials Tech is facing in Chemicals - Plastics & Rubber sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Wuxi Honghui New Materials Tech 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.
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 Wuxi Honghui New Materials Tech business can come under increasing regulations regarding data privacy, data security, 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 Wuxi Honghui New Materials Tech.
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. Wuxi Honghui New Materials Tech 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.
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 Wuxi Honghui New Materials Tech in the Chemicals - Plastics & Rubber sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Wuxi Honghui New Materials Tech 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Wuxi Honghui New Materials Tech 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 Wuxi Honghui New Materials Tech prominent markets.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Wuxi Honghui New Materials Tech may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Chemicals - Plastics & Rubber sector.
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. Wuxi Honghui New Materials Tech needs to understand the core reasons impacting the Chemicals - Plastics & Rubber industry. This will help it in building a better workplace.
Increasing wage structure of Wuxi Honghui New Materials Tech
– 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 Wuxi Honghui New Materials Tech.
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. Wuxi Honghui New Materials Tech can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Wuxi Honghui New Materials Tech 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. Wuxi Honghui New Materials Tech can take advantage of this fund but it will also bring new competitors in the Chemicals - Plastics & Rubber industry.
Weighted SWOT Analysis of Wuxi Honghui New Materials Tech Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Wuxi Honghui New Materials Tech 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 Wuxi Honghui New Materials Tech 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 Wuxi Honghui New Materials Tech 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 Wuxi Honghui New Materials Tech 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 Wuxi Honghui New Materials Tech needs to make to build a sustainable competitive advantage.