SWOT Analysis / TOWS Matrix for Lanzhou Zhuangyuan (China)
Based on various researches at Oak Spring University , Lanzhou Zhuangyuan is operating in a macro-environment that has been destablized by – technology disruption, increasing transportation and logistics costs, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, geopolitical disruptions, talent flight as more people leaving formal jobs, there is backlash against globalization,
increasing inequality as vast percentage of new income is going to the top 1%, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Lanzhou Zhuangyuan
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Lanzhou Zhuangyuan can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Lanzhou Zhuangyuan, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Lanzhou Zhuangyuan 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 Lanzhou Zhuangyuan can be done for the following purposes –
1. Strategic planning of Lanzhou Zhuangyuan
2. Improving business portfolio management of Lanzhou Zhuangyuan
3. Assessing feasibility of the new initiative in China
4. Making a Food Processing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Lanzhou Zhuangyuan
Strengths of Lanzhou Zhuangyuan | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Lanzhou Zhuangyuan are -
Training and development
– Lanzhou Zhuangyuan has one of the best training and development program in Consumer/Non-Cyclical 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.
Low bargaining power of suppliers
– Suppliers of Lanzhou Zhuangyuan in the Consumer/Non-Cyclical sector have low bargaining power. Lanzhou Zhuangyuan has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Lanzhou Zhuangyuan to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Food Processing industry
– Lanzhou Zhuangyuan has clearly differentiated products in the market place. This has enabled Lanzhou Zhuangyuan to fetch slight price premium compare to the competitors in the Food Processing industry. The sustainable margins have also helped Lanzhou Zhuangyuan to invest into research and development (R&D) and innovation.
Analytics focus
– Lanzhou Zhuangyuan 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 Food Processing 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.
High brand equity
– Lanzhou Zhuangyuan has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Lanzhou Zhuangyuan to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Lanzhou Zhuangyuan has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Lanzhou Zhuangyuan 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.
Strong track record of project management in the Food Processing industry
– Lanzhou Zhuangyuan is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Lanzhou Zhuangyuan 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
– Lanzhou Zhuangyuan has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Food Processing industry. Secondly the value chain collaborators of Lanzhou Zhuangyuan have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Lanzhou Zhuangyuan has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Lanzhou Zhuangyuan staying ahead in the Food Processing industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Lanzhou Zhuangyuan is one of the leading players in the Food Processing 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 Lanzhou Zhuangyuan in Food Processing industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses of Lanzhou Zhuangyuan | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Lanzhou Zhuangyuan are -
Ability to respond to the competition
– As the decision making is very deliberative at Lanzhou Zhuangyuan, in the dynamic environment of Food Processing industry it has struggled to respond to the nimble upstart competition. Lanzhou Zhuangyuan has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring in Food Processing industry
– The stress on hiring functional specialists at Lanzhou Zhuangyuan 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.
Slow decision making process
– As mentioned earlier in the report, Lanzhou Zhuangyuan has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Food Processing industry over the last five years. Lanzhou Zhuangyuan 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 operating costs
– Compare to the competitors, Lanzhou Zhuangyuan has high operating costs in the Food Processing industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Lanzhou Zhuangyuan lucrative customers.
Slow to strategic competitive environment developments
– As Lanzhou Zhuangyuan is one of the leading players in the Food Processing industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Food Processing industry in last five years.
Products dominated business model
– Even though Lanzhou Zhuangyuan has some of the most successful models in the Food Processing industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Lanzhou Zhuangyuan should strive to include more intangible value offerings along with its core products and services.
High dependence on Lanzhou Zhuangyuan ‘s star products
– The top 2 products and services of Lanzhou Zhuangyuan still accounts for major business revenue. This dependence on star products in Food Processing industry has resulted into insufficient focus on developing new products, even though Lanzhou Zhuangyuan has relatively successful track record of launching new products.
Employees’ less understanding of Lanzhou Zhuangyuan strategy
– From the outside it seems that the employees of Lanzhou Zhuangyuan 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.
Compensation and incentives
– The revenue per employee of Lanzhou Zhuangyuan is just above the Food Processing industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High 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 Lanzhou Zhuangyuan supply chain. Even after few cautionary changes, Lanzhou Zhuangyuan is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Lanzhou Zhuangyuan vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Lanzhou Zhuangyuan 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.
Lanzhou Zhuangyuan Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Lanzhou Zhuangyuan are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Lanzhou Zhuangyuan can use these opportunities to build new business models that can help the communities that Lanzhou Zhuangyuan operates in. Secondly it can use opportunities from government spending in Food Processing sector.
Loyalty marketing
– Lanzhou Zhuangyuan 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, Lanzhou Zhuangyuan 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.
Learning at scale
– Online learning technologies has now opened space for Lanzhou Zhuangyuan 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 Lanzhou Zhuangyuan has opened avenues for new revenue streams for the organization in Food Processing industry. This can help Lanzhou Zhuangyuan to build a more holistic ecosystem for Lanzhou Zhuangyuan products in the Food Processing industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Lanzhou Zhuangyuan 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.
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. Lanzhou Zhuangyuan can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Lanzhou Zhuangyuan 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Food Processing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Lanzhou Zhuangyuan 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. Lanzhou Zhuangyuan 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.
Manufacturing automation
– Lanzhou Zhuangyuan can use the latest technology developments to improve its manufacturing and designing process in Food Processing 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.
Better consumer reach
– The expansion of the 5G network will help Lanzhou Zhuangyuan to increase its market reach. Lanzhou Zhuangyuan 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.
Use of Bitcoin and other crypto currencies for transactions in Food Processing industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Lanzhou Zhuangyuan in the Food Processing industry. Now Lanzhou Zhuangyuan can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Lanzhou Zhuangyuan in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Food Processing industry, and it will provide faster access to the consumers.
Threats Lanzhou Zhuangyuan External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Lanzhou Zhuangyuan are -
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.
Technology acceleration in Forth Industrial Revolution
– Lanzhou Zhuangyuan has witnessed rapid integration of technology during Covid-19 in the Food Processing industry. As one of the leading players in the industry, Lanzhou Zhuangyuan needs to keep up with the evolution of technology in the Food Processing 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.
Increasing wage structure of Lanzhou Zhuangyuan
– 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 Lanzhou Zhuangyuan.
Regulatory challenges
– Lanzhou Zhuangyuan 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 Food Processing industry regulations.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Lanzhou Zhuangyuan in Food Processing industry. The Food Processing 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.
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. Lanzhou Zhuangyuan 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.
Consumer confidence and its impact on Lanzhou Zhuangyuan 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 Food Processing industry and other sectors.
Stagnating economy with rate increase
– Lanzhou Zhuangyuan 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 Food Processing industry.
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 Lanzhou Zhuangyuan business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Lanzhou Zhuangyuan 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 Lanzhou Zhuangyuan prominent markets.
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 Lanzhou Zhuangyuan in the Food Processing sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Food Processing industry are lowering. It can presents Lanzhou Zhuangyuan with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Food Processing sector.
Weighted SWOT Analysis of Lanzhou Zhuangyuan Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Lanzhou Zhuangyuan 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 Lanzhou Zhuangyuan 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 Lanzhou Zhuangyuan 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 Lanzhou Zhuangyuan 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 Lanzhou Zhuangyuan needs to make to build a sustainable competitive advantage.
