Based on various researches at Oak Spring University , Wuhan Zhongyuan Huadian Sci Tech is operating in a macro-environment that has been destablized by – challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices,
banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Wuhan Zhongyuan Huadian Sci Tech
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Wuhan Zhongyuan Huadian Sci Tech can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Wuhan Zhongyuan Huadian Sci Tech, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Wuhan Zhongyuan Huadian Sci 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 Wuhan Zhongyuan Huadian Sci Tech can be done for the following purposes –
1. Strategic planning of Wuhan Zhongyuan Huadian Sci Tech
2. Improving business portfolio management of Wuhan Zhongyuan Huadian Sci Tech
3. Assessing feasibility of the new initiative in China
4. Making a Scientific & Technical Instr. sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Wuhan Zhongyuan Huadian Sci Tech
Strengths of Wuhan Zhongyuan Huadian Sci Tech | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Wuhan Zhongyuan Huadian Sci Tech are -
Strong track record of project management in the Scientific & Technical Instr. industry
– Wuhan Zhongyuan Huadian Sci Tech 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 Wuhan Zhongyuan Huadian Sci 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.
Operational resilience
– The operational resilience strategy of Wuhan Zhongyuan Huadian Sci Tech comprises – understanding the underlying the factors in the Scientific & Technical Instr. industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Superior customer experience
– The customer experience strategy of Wuhan Zhongyuan Huadian Sci Tech in Scientific & Technical Instr. industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Scientific & Technical Instr.
– Wuhan Zhongyuan Huadian Sci Tech is one of the leading players in the Scientific & Technical Instr. industry in China. Over the years it has not only transformed the business landscape in the Scientific & Technical Instr. industry in China but also across the existing markets. The ability to lead change has enabled Wuhan Zhongyuan Huadian Sci Tech in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Wuhan Zhongyuan Huadian Sci Tech has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Scientific & Technical Instr. industry. Secondly the value chain collaborators of Wuhan Zhongyuan Huadian Sci Tech have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Wuhan Zhongyuan Huadian Sci 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 Scientific & Technical Instr. 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
– Wuhan Zhongyuan Huadian Sci Tech is one of the leading players in the Scientific & Technical Instr. 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 Wuhan Zhongyuan Huadian Sci Tech in the Technology sector have low bargaining power. Wuhan Zhongyuan Huadian Sci Tech has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Wuhan Zhongyuan Huadian Sci Tech to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Wuhan Zhongyuan Huadian Sci 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.
Digital Transformation in Scientific & Technical Instr. industry
- digital transformation varies from industry to industry. For Wuhan Zhongyuan Huadian Sci Tech digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Wuhan Zhongyuan Huadian Sci 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.
Successful track record of launching new products
– Wuhan Zhongyuan Huadian Sci Tech has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Wuhan Zhongyuan Huadian Sci 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.
Weaknesses of Wuhan Zhongyuan Huadian Sci Tech | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Wuhan Zhongyuan Huadian Sci Tech are -
Capital Spending Reduction
– Even during the low interest decade, Wuhan Zhongyuan Huadian Sci Tech has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Scientific & Technical Instr. industry using digital technology.
Interest costs
– Compare to the competition, Wuhan Zhongyuan Huadian Sci 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.
Slow to strategic competitive environment developments
– As Wuhan Zhongyuan Huadian Sci Tech is one of the leading players in the Scientific & Technical Instr. industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Scientific & Technical Instr. industry in last five years.
Skills based hiring in Scientific & Technical Instr. industry
– The stress on hiring functional specialists at Wuhan Zhongyuan Huadian Sci Tech 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.
High bargaining power of channel partners in Scientific & Technical Instr. industry
– because of the regulatory requirements in China, Wuhan Zhongyuan Huadian Sci Tech 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 Scientific & Technical Instr. industry.
Ability to respond to the competition
– As the decision making is very deliberative at Wuhan Zhongyuan Huadian Sci Tech, in the dynamic environment of Scientific & Technical Instr. industry it has struggled to respond to the nimble upstart competition. Wuhan Zhongyuan Huadian Sci Tech has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– From the 10K / annual statement of Wuhan Zhongyuan Huadian Sci Tech, it seems that company is thinking out the frontier risks that can impact Scientific & Technical Instr. industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Low market penetration in new markets
– Outside its home market of China, Wuhan Zhongyuan Huadian Sci Tech needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on Wuhan Zhongyuan Huadian Sci Tech ‘s star products
– The top 2 products and services of Wuhan Zhongyuan Huadian Sci Tech still accounts for major business revenue. This dependence on star products in Scientific & Technical Instr. industry has resulted into insufficient focus on developing new products, even though Wuhan Zhongyuan Huadian Sci Tech has relatively successful track record of launching new products.
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 Wuhan Zhongyuan Huadian Sci Tech supply chain. Even after few cautionary changes, Wuhan Zhongyuan Huadian Sci Tech is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Wuhan Zhongyuan Huadian Sci Tech vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Wuhan Zhongyuan Huadian Sci Tech has a high cash cycle compare to other players in the Scientific & Technical Instr. industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Wuhan Zhongyuan Huadian Sci Tech Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Wuhan Zhongyuan Huadian Sci Tech are -
Developing new processes and practices
– Wuhan Zhongyuan Huadian Sci Tech can develop new processes and procedures in Scientific & Technical Instr. 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Scientific & Technical Instr. industry, but it has also influenced the consumer preferences. Wuhan Zhongyuan Huadian Sci Tech can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Wuhan Zhongyuan Huadian Sci Tech has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Scientific & Technical Instr. sector. This continuous investment in analytics has enabled Wuhan Zhongyuan Huadian Sci Tech to build a competitive advantage using analytics. The analytics driven competitive advantage can help Wuhan Zhongyuan Huadian Sci Tech to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Wuhan Zhongyuan Huadian Sci 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 Wuhan Zhongyuan Huadian Sci Tech to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Wuhan Zhongyuan Huadian Sci Tech has opened avenues for new revenue streams for the organization in Scientific & Technical Instr. industry. This can help Wuhan Zhongyuan Huadian Sci Tech to build a more holistic ecosystem for Wuhan Zhongyuan Huadian Sci Tech products in the Scientific & Technical Instr. industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Wuhan Zhongyuan Huadian Sci Tech can use these opportunities to build new business models that can help the communities that Wuhan Zhongyuan Huadian Sci Tech operates in. Secondly it can use opportunities from government spending in Scientific & Technical Instr. sector.
Buying journey improvements
– Wuhan Zhongyuan Huadian Sci Tech can improve the customer journey of consumers in the Scientific & Technical Instr. industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Loyalty marketing
– Wuhan Zhongyuan Huadian Sci Tech 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.
Better consumer reach
– The expansion of the 5G network will help Wuhan Zhongyuan Huadian Sci Tech to increase its market reach. Wuhan Zhongyuan Huadian Sci 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Scientific & Technical Instr. industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Wuhan Zhongyuan Huadian Sci Tech 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. Wuhan Zhongyuan Huadian Sci Tech 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.
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 Wuhan Zhongyuan Huadian Sci 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.
Use of Bitcoin and other crypto currencies for transactions in Scientific & Technical Instr. industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Wuhan Zhongyuan Huadian Sci Tech in the Scientific & Technical Instr. industry. Now Wuhan Zhongyuan Huadian Sci Tech can target international markets with far fewer capital restrictions requirements than the existing system.
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. Wuhan Zhongyuan Huadian Sci Tech can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Wuhan Zhongyuan Huadian Sci Tech External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Wuhan Zhongyuan Huadian Sci Tech are -
Regulatory challenges
– Wuhan Zhongyuan Huadian Sci 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 Scientific & Technical Instr. industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Wuhan Zhongyuan Huadian Sci 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 Wuhan Zhongyuan Huadian Sci Tech 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 Wuhan Zhongyuan Huadian Sci Tech in the Scientific & Technical Instr. sector and impact the bottomline of the organization.
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. Wuhan Zhongyuan Huadian Sci Tech needs to understand the core reasons impacting the Scientific & Technical Instr. industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Wuhan Zhongyuan Huadian Sci Tech in Scientific & Technical Instr. industry. The Scientific & Technical Instr. 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.
Shortening product life cycle
– it is one of the major threat that Wuhan Zhongyuan Huadian Sci Tech is facing in Scientific & Technical Instr. sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Wuhan Zhongyuan Huadian Sci Tech business can come under increasing regulations regarding data privacy, data security, 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. Wuhan Zhongyuan Huadian Sci 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Wuhan Zhongyuan Huadian Sci 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 Scientific & Technical Instr. sector.
Environmental challenges
– Wuhan Zhongyuan Huadian Sci 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. Wuhan Zhongyuan Huadian Sci Tech can take advantage of this fund but it will also bring new competitors in the Scientific & Technical Instr. industry.
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
– Wuhan Zhongyuan Huadian Sci Tech has witnessed rapid integration of technology during Covid-19 in the Scientific & Technical Instr. industry. As one of the leading players in the industry, Wuhan Zhongyuan Huadian Sci Tech needs to keep up with the evolution of technology in the Scientific & Technical Instr. 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.
Consumer confidence and its impact on Wuhan Zhongyuan Huadian Sci Tech 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 Scientific & Technical Instr. industry and other sectors.
Weighted SWOT Analysis of Wuhan Zhongyuan Huadian Sci Tech Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Wuhan Zhongyuan Huadian Sci 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 Wuhan Zhongyuan Huadian Sci 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 Wuhan Zhongyuan Huadian Sci 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 Wuhan Zhongyuan Huadian Sci 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 Wuhan Zhongyuan Huadian Sci Tech needs to make to build a sustainable competitive advantage.