Zhejiang Meilun Elevator (603321) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Zhejiang Meilun Elevator (China)

Based on various researches at Oak Spring University , Zhejiang Meilun Elevator is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, increasing transportation and logistics costs, there is backlash against globalization, increasing energy prices, supply chains are disrupted by pandemic , geopolitical disruptions, wage bills are increasing, etc

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Introduction to SWOT Analysis of Zhejiang Meilun Elevator

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

According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Zhejiang Meilun Elevator can be done for the following purposes –
1. Strategic planning of Zhejiang Meilun Elevator
2. Improving business portfolio management of Zhejiang Meilun Elevator
3. Assessing feasibility of the new initiative in China
4. Making a Misc. Capital Goods sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Zhejiang Meilun Elevator

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Strengths of Zhejiang Meilun Elevator | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Zhejiang Meilun Elevator are -

Training and development

– Zhejiang Meilun Elevator has one of the best training and development program in Capital Goods 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.

High switching costs

– The high switching costs that Zhejiang Meilun Elevator 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.

Learning organization

- Zhejiang Meilun Elevator 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 Zhejiang Meilun Elevator is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Zhejiang Meilun Elevator emphasize – knowledge, initiative, and innovation.

Innovation driven organization

– Zhejiang Meilun Elevator is one of the most innovative firm in Misc. Capital Goods sector.

Superior customer experience

– The customer experience strategy of Zhejiang Meilun Elevator in Misc. Capital Goods industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Successful track record of launching new products

– Zhejiang Meilun Elevator has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Zhejiang Meilun Elevator 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.

Effective Research and Development (R&D)

– Zhejiang Meilun Elevator has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Zhejiang Meilun Elevator staying ahead in the Misc. Capital Goods 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

– Zhejiang Meilun Elevator is one of the leading players in the Misc. Capital Goods 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.

Low bargaining power of suppliers

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

Ability to lead change in Misc. Capital Goods

– Zhejiang Meilun Elevator is one of the leading players in the Misc. Capital Goods industry in China. Over the years it has not only transformed the business landscape in the Misc. Capital Goods industry in China but also across the existing markets. The ability to lead change has enabled Zhejiang Meilun Elevator in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Organizational Resilience of Zhejiang Meilun Elevator

– The covid-19 pandemic has put organizational resilience at the centre of everthing Zhejiang Meilun Elevator does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Sustainable margins compare to other players in Misc. Capital Goods industry

– Zhejiang Meilun Elevator has clearly differentiated products in the market place. This has enabled Zhejiang Meilun Elevator to fetch slight price premium compare to the competitors in the Misc. Capital Goods industry. The sustainable margins have also helped Zhejiang Meilun Elevator to invest into research and development (R&D) and innovation.

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Weaknesses of Zhejiang Meilun Elevator | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Zhejiang Meilun Elevator are -

Slow to strategic competitive environment developments

– As Zhejiang Meilun Elevator is one of the leading players in the Misc. Capital Goods industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Misc. Capital Goods industry in last five years.

High cash cycle compare to competitors

Zhejiang Meilun Elevator has a high cash cycle compare to other players in the Misc. Capital Goods industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Skills based hiring in Misc. Capital Goods industry

– The stress on hiring functional specialists at Zhejiang Meilun Elevator has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.

Ability to respond to the competition

– As the decision making is very deliberative at Zhejiang Meilun Elevator, in the dynamic environment of Misc. Capital Goods industry it has struggled to respond to the nimble upstart competition. Zhejiang Meilun Elevator has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

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 Zhejiang Meilun Elevator supply chain. Even after few cautionary changes, Zhejiang Meilun Elevator is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Zhejiang Meilun Elevator vulnerable to further global disruptions in South East Asia.

Need for greater diversity

– Zhejiang Meilun Elevator 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.

Aligning sales with marketing

– From the outside it seems that Zhejiang Meilun Elevator needs to have more collaboration between its sales team and marketing team. Sales professionals in the Misc. Capital Goods industry have deep experience in developing customer relationships. Marketing department at Zhejiang Meilun Elevator can leverage the sales team experience to cultivate customer relationships as Zhejiang Meilun Elevator is planning to shift buying processes online.

High bargaining power of channel partners in Misc. Capital Goods industry

– because of the regulatory requirements in China, Zhejiang Meilun Elevator 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 Misc. Capital Goods industry.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Zhejiang Meilun Elevator is slow explore the new channels of communication. These new channels of communication can help Zhejiang Meilun Elevator to provide better information regarding Misc. Capital Goods products and services. It can also build an online community to further reach out to potential customers.

High dependence on Zhejiang Meilun Elevator ‘s star products

– The top 2 products and services of Zhejiang Meilun Elevator still accounts for major business revenue. This dependence on star products in Misc. Capital Goods industry has resulted into insufficient focus on developing new products, even though Zhejiang Meilun Elevator has relatively successful track record of launching new products.

Products dominated business model

– Even though Zhejiang Meilun Elevator has some of the most successful models in the Misc. Capital Goods industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Zhejiang Meilun Elevator should strive to include more intangible value offerings along with its core products and services.

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Zhejiang Meilun Elevator Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Zhejiang Meilun Elevator are -

Lowering marketing communication costs

– 5G expansion will open new opportunities for Zhejiang Meilun Elevator in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Misc. Capital Goods industry, and it will provide faster access to the consumers.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Misc. Capital Goods industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Zhejiang Meilun Elevator 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. Zhejiang Meilun Elevator 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.

Better consumer reach

– The expansion of the 5G network will help Zhejiang Meilun Elevator to increase its market reach. Zhejiang Meilun Elevator 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

– Zhejiang Meilun Elevator 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Zhejiang Meilun Elevator 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 Misc. Capital Goods industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Zhejiang Meilun Elevator in the Misc. Capital Goods industry. Now Zhejiang Meilun Elevator can target international markets with far fewer capital restrictions requirements than the existing system.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Zhejiang Meilun Elevator 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 Zhejiang Meilun Elevator to hire the very best people irrespective of their geographical location.

Manufacturing automation

– Zhejiang Meilun Elevator can use the latest technology developments to improve its manufacturing and designing process in Misc. Capital Goods 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.

Building a culture of innovation

– managers at Zhejiang Meilun Elevator 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 Misc. Capital Goods industry.

Low interest rates

– Even though inflation is raising its head in most developed economies, Zhejiang Meilun Elevator 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 Misc. Capital Goods industry, but it has also influenced the consumer preferences. Zhejiang Meilun Elevator 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 Zhejiang Meilun Elevator 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 Zhejiang Meilun Elevator 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.

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Threats Zhejiang Meilun Elevator External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Zhejiang Meilun Elevator are -

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Zhejiang Meilun Elevator may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Misc. Capital Goods sector.

New competition

– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Zhejiang Meilun Elevator in the Misc. Capital Goods sector and impact the bottomline of the organization.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Misc. Capital Goods industry are lowering. It can presents Zhejiang Meilun Elevator with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Misc. Capital Goods sector.

Stagnating economy with rate increase

– Zhejiang Meilun Elevator 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 Misc. Capital Goods industry.

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 Zhejiang Meilun Elevator.

High dependence on third party suppliers

– Zhejiang Meilun Elevator high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.

Shortening product life cycle

– it is one of the major threat that Zhejiang Meilun Elevator is facing in Misc. Capital Goods sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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. Zhejiang Meilun Elevator will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.

Increasing wage structure of Zhejiang Meilun Elevator

– 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 Zhejiang Meilun Elevator.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Zhejiang Meilun Elevator 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 Zhejiang Meilun Elevator prominent markets.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Zhejiang Meilun Elevator in Misc. Capital Goods industry. The Misc. Capital Goods 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.

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. Zhejiang Meilun Elevator needs to understand the core reasons impacting the Misc. Capital Goods industry. This will help it in building a better workplace.

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 Zhejiang Meilun Elevator business can come under increasing regulations regarding data privacy, data security, etc.

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Weighted SWOT Analysis of Zhejiang Meilun Elevator Template, Example

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

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