SWOT Analysis / TOWS Matrix for Shanghai Sunglow Packaging (China)
Based on various researches at Oak Spring University , Shanghai Sunglow Packaging is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, there is backlash against globalization, wage bills are increasing, increasing energy prices, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing commodity prices, geopolitical disruptions, etc
Introduction to SWOT Analysis of Shanghai Sunglow Packaging
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Shanghai Sunglow Packaging can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shanghai Sunglow Packaging, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shanghai Sunglow Packaging 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 Shanghai Sunglow Packaging can be done for the following purposes –
1. Strategic planning of Shanghai Sunglow Packaging
2. Improving business portfolio management of Shanghai Sunglow Packaging
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 Shanghai Sunglow Packaging
Strengths of Shanghai Sunglow Packaging | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shanghai Sunglow Packaging are -
Digital Transformation in Containers & Packaging industry
- digital transformation varies from industry to industry. For Shanghai Sunglow Packaging digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shanghai Sunglow Packaging 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.
Highly skilled collaborators
– Shanghai Sunglow Packaging has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Containers & Packaging industry. Secondly the value chain collaborators of Shanghai Sunglow Packaging have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Shanghai Sunglow Packaging 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.
Sustainable margins compare to other players in Containers & Packaging industry
– Shanghai Sunglow Packaging has clearly differentiated products in the market place. This has enabled Shanghai Sunglow Packaging to fetch slight price premium compare to the competitors in the Containers & Packaging industry. The sustainable margins have also helped Shanghai Sunglow Packaging to invest into research and development (R&D) and innovation.
Innovation driven organization
– Shanghai Sunglow Packaging is one of the most innovative firm in Containers & Packaging sector.
Ability to lead change in Containers & Packaging
– Shanghai Sunglow Packaging is one of the leading players in the Containers & Packaging industry in China. Over the years it has not only transformed the business landscape in the Containers & Packaging industry in China but also across the existing markets. The ability to lead change has enabled Shanghai Sunglow Packaging in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Shanghai Sunglow Packaging 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.
Low bargaining power of suppliers
– Suppliers of Shanghai Sunglow Packaging in the Basic Materials sector have low bargaining power. Shanghai Sunglow Packaging has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shanghai Sunglow Packaging to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Shanghai Sunglow Packaging 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.
Strong track record of project management in the Containers & Packaging industry
– Shanghai Sunglow Packaging is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Shanghai Sunglow Packaging in Containers & Packaging industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Shanghai Sunglow Packaging 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 Shanghai Sunglow Packaging is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Shanghai Sunglow Packaging emphasize – knowledge, initiative, and innovation.
Weaknesses of Shanghai Sunglow Packaging | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shanghai Sunglow Packaging are -
High bargaining power of channel partners in Containers & Packaging industry
– because of the regulatory requirements in China, Shanghai Sunglow Packaging 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.
Capital Spending Reduction
– Even during the low interest decade, Shanghai Sunglow Packaging 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 Containers & Packaging industry using digital technology.
Aligning sales with marketing
– From the outside it seems that Shanghai Sunglow Packaging needs to have more collaboration between its sales team and marketing team. Sales professionals in the Containers & Packaging industry have deep experience in developing customer relationships. Marketing department at Shanghai Sunglow Packaging can leverage the sales team experience to cultivate customer relationships as Shanghai Sunglow Packaging is planning to shift buying processes online.
High operating costs
– Compare to the competitors, Shanghai Sunglow Packaging 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 Shanghai Sunglow Packaging lucrative customers.
High dependence on Shanghai Sunglow Packaging ‘s star products
– The top 2 products and services of Shanghai Sunglow Packaging still accounts for major business revenue. This dependence on star products in Containers & Packaging industry has resulted into insufficient focus on developing new products, even though Shanghai Sunglow Packaging has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Shanghai Sunglow Packaging is dominated by functional specialists. It is not different from other players in the Containers & Packaging industry, but Shanghai Sunglow Packaging needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Shanghai Sunglow Packaging to focus more on services in the Containers & Packaging industry rather than just following the product oriented approach.
Skills based hiring in Containers & Packaging industry
– The stress on hiring functional specialists at Shanghai Sunglow Packaging 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 Shanghai Sunglow Packaging, in the dynamic environment of Containers & Packaging industry it has struggled to respond to the nimble upstart competition. Shanghai Sunglow Packaging has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Shanghai Sunglow Packaging has a high cash cycle compare to other players in the Containers & Packaging industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Compensation and incentives
– The revenue per employee of Shanghai Sunglow Packaging 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.
Products dominated business model
– Even though Shanghai Sunglow Packaging has some of the most successful models in the Containers & Packaging industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Shanghai Sunglow Packaging should strive to include more intangible value offerings along with its core products and services.
Shanghai Sunglow Packaging Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Shanghai Sunglow Packaging are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Shanghai Sunglow Packaging 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, Shanghai Sunglow Packaging is facing challenges because of the dominance of functional experts in the organization. Shanghai Sunglow Packaging 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.
Buying journey improvements
– Shanghai Sunglow Packaging can improve the customer journey of consumers in the Containers & Packaging 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.
Using analytics as competitive advantage
– Shanghai Sunglow Packaging 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 Shanghai Sunglow Packaging to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shanghai Sunglow Packaging to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Shanghai Sunglow Packaging has opened avenues for new revenue streams for the organization in Containers & Packaging industry. This can help Shanghai Sunglow Packaging to build a more holistic ecosystem for Shanghai Sunglow Packaging products in the Containers & Packaging industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Shanghai Sunglow Packaging 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.
Better consumer reach
– The expansion of the 5G network will help Shanghai Sunglow Packaging to increase its market reach. Shanghai Sunglow Packaging 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 Shanghai Sunglow Packaging in the Containers & Packaging industry. Now Shanghai Sunglow Packaging can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Shanghai Sunglow Packaging 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Shanghai Sunglow Packaging in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Containers & Packaging industry, and it will provide faster access to the consumers.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Shanghai Sunglow Packaging 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 Shanghai Sunglow Packaging to hire the very best people irrespective of their geographical location.
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 Shanghai Sunglow Packaging 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.
Developing new processes and practices
– Shanghai Sunglow Packaging 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.
Threats Shanghai Sunglow Packaging External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Shanghai Sunglow Packaging are -
Increasing wage structure of Shanghai Sunglow Packaging
– 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 Shanghai Sunglow Packaging.
Consumer confidence and its impact on Shanghai Sunglow Packaging 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.
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 Shanghai Sunglow Packaging.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Shanghai Sunglow Packaging in Containers & Packaging industry. The Containers & Packaging 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.
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.
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. Shanghai Sunglow Packaging can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Shanghai Sunglow Packaging may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Containers & Packaging sector.
Shortening product life cycle
– it is one of the major threat that Shanghai Sunglow Packaging is facing in Containers & Packaging 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 Shanghai Sunglow Packaging 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, Shanghai Sunglow Packaging 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 Shanghai Sunglow Packaging prominent markets.
Stagnating economy with rate increase
– Shanghai Sunglow Packaging 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.
Technology acceleration in Forth Industrial Revolution
– Shanghai Sunglow Packaging has witnessed rapid integration of technology during Covid-19 in the Containers & Packaging industry. As one of the leading players in the industry, Shanghai Sunglow Packaging 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.
Weighted SWOT Analysis of Shanghai Sunglow Packaging Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Shanghai Sunglow Packaging 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 Shanghai Sunglow Packaging 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 Shanghai Sunglow Packaging 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 Shanghai Sunglow Packaging 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 Shanghai Sunglow Packaging needs to make to build a sustainable competitive advantage.
