SWOT Analysis / TOWS Matrix for Shandong Huapeng Glass (China)
Based on various researches at Oak Spring University , Shandong Huapeng Glass is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, geopolitical disruptions, technology disruption, increasing government debt because of Covid-19 spendings, wage bills are increasing, there is backlash against globalization, talent flight as more people leaving formal jobs,
supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Shandong Huapeng Glass
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Shandong Huapeng Glass can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shandong Huapeng Glass, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shandong Huapeng Glass 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 Shandong Huapeng Glass can be done for the following purposes –
1. Strategic planning of Shandong Huapeng Glass
2. Improving business portfolio management of Shandong Huapeng Glass
3. Assessing feasibility of the new initiative in China
4. Making a Containers & Packaging sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Shandong Huapeng Glass
Strengths of Shandong Huapeng Glass | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shandong Huapeng Glass are -
Sustainable margins compare to other players in Containers & Packaging industry
– Shandong Huapeng Glass has clearly differentiated products in the market place. This has enabled Shandong Huapeng Glass to fetch slight price premium compare to the competitors in the Containers & Packaging industry. The sustainable margins have also helped Shandong Huapeng Glass to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Shandong Huapeng Glass in the Basic Materials sector have low bargaining power. Shandong Huapeng Glass has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shandong Huapeng Glass to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management in the Containers & Packaging industry
– Shandong Huapeng Glass is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Shandong Huapeng Glass
– The covid-19 pandemic has put organizational resilience at the centre of everthing Shandong Huapeng Glass does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Containers & Packaging industry
- digital transformation varies from industry to industry. For Shandong Huapeng Glass digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shandong Huapeng Glass 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.
Training and development
– Shandong Huapeng Glass 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.
Learning organization
- Shandong Huapeng Glass 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 Shandong Huapeng Glass is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Shandong Huapeng Glass emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Shandong Huapeng Glass 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.
Analytics focus
– Shandong Huapeng Glass 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 Containers & Packaging 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.
Ability to recruit top talent
– Shandong Huapeng Glass is one of the leading players in the Containers & Packaging 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.
Diverse revenue streams
– Shandong Huapeng Glass is present in almost all the verticals within the Containers & Packaging industry. This has provided Shandong Huapeng Glass a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
High switching costs
– The high switching costs that Shandong Huapeng Glass 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.
Weaknesses of Shandong Huapeng Glass | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shandong Huapeng Glass are -
Employees’ less understanding of Shandong Huapeng Glass strategy
– From the outside it seems that the employees of Shandong Huapeng Glass 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.
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 Shandong Huapeng Glass supply chain. Even after few cautionary changes, Shandong Huapeng Glass is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Shandong Huapeng Glass vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee of Shandong Huapeng Glass is just above the Containers & Packaging 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.
Need for greater diversity
– Shandong Huapeng Glass has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Slow to strategic competitive environment developments
– As Shandong Huapeng Glass is one of the leading players in the Containers & Packaging industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Containers & Packaging industry in last five years.
High operating costs
– Compare to the competitors, Shandong Huapeng Glass has high operating costs in the Containers & Packaging industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Shandong Huapeng Glass lucrative customers.
Interest costs
– Compare to the competition, Shandong Huapeng Glass 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.
Lack of clear differentiation of Shandong Huapeng Glass products
– To increase the profitability and margins on the products, Shandong Huapeng Glass needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners in Containers & Packaging industry
– because of the regulatory requirements in China, Shandong Huapeng Glass is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Containers & Packaging industry.
Skills based hiring in Containers & Packaging industry
– The stress on hiring functional specialists at Shandong Huapeng Glass 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 Shandong Huapeng Glass, in the dynamic environment of Containers & Packaging industry it has struggled to respond to the nimble upstart competition. Shandong Huapeng Glass has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Shandong Huapeng Glass Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Shandong Huapeng Glass are -
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. Shandong Huapeng Glass 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 Shandong Huapeng Glass 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.
Better consumer reach
– The expansion of the 5G network will help Shandong Huapeng Glass to increase its market reach. Shandong Huapeng Glass 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 Containers & Packaging industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Shandong Huapeng Glass in the Containers & Packaging industry. Now Shandong Huapeng Glass can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Shandong Huapeng Glass can use these opportunities to build new business models that can help the communities that Shandong Huapeng Glass operates in. Secondly it can use opportunities from government spending in Containers & Packaging sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Shandong Huapeng Glass 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 Shandong Huapeng Glass to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Shandong Huapeng Glass can develop new processes and procedures in Containers & Packaging industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Using analytics as competitive advantage
– Shandong Huapeng Glass has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Containers & Packaging sector. This continuous investment in analytics has enabled Shandong Huapeng Glass to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shandong Huapeng Glass to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Shandong Huapeng Glass 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Containers & Packaging industry, but it has also influenced the consumer preferences. Shandong Huapeng Glass can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Shandong Huapeng Glass 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 Containers & Packaging industry.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Shandong Huapeng Glass can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Shandong Huapeng Glass is facing challenges because of the dominance of functional experts in the organization. Shandong Huapeng Glass can utilize new technology in the field of Containers & Packaging industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats Shandong Huapeng Glass External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Shandong Huapeng Glass are -
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 Shandong Huapeng Glass business can come under increasing regulations regarding data privacy, data security, etc.
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.
Regulatory challenges
– Shandong Huapeng Glass 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 Containers & Packaging industry regulations.
Stagnating economy with rate increase
– Shandong Huapeng Glass can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the Containers & Packaging industry.
Environmental challenges
– Shandong Huapeng Glass 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. Shandong Huapeng Glass can take advantage of this fund but it will also bring new competitors in the Containers & Packaging industry.
Increasing wage structure of Shandong Huapeng Glass
– 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 Shandong Huapeng Glass.
High dependence on third party suppliers
– Shandong Huapeng Glass 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Shandong Huapeng Glass 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 Shandong Huapeng Glass prominent markets.
Technology acceleration in Forth Industrial Revolution
– Shandong Huapeng Glass has witnessed rapid integration of technology during Covid-19 in the Containers & Packaging industry. As one of the leading players in the industry, Shandong Huapeng Glass needs to keep up with the evolution of technology in the Containers & Packaging sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
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.
Consumer confidence and its impact on Shandong Huapeng Glass demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in Containers & Packaging industry and other sectors.
Easy access to finance
– Easy access to finance in Containers & Packaging industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Shandong Huapeng Glass can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Containers & Packaging industry are lowering. It can presents Shandong Huapeng Glass with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Containers & Packaging sector.
Weighted SWOT Analysis of Shandong Huapeng Glass Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Shandong Huapeng Glass 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 Shandong Huapeng Glass 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 Shandong Huapeng Glass 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 Shandong Huapeng Glass 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 Shandong Huapeng Glass needs to make to build a sustainable competitive advantage.
