Based on various researches at Oak Spring University , Beijing Hengtong Innovation Luxwood is operating in a macro-environment that has been destablized by – geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, increasing commodity prices, there is backlash against globalization, there is increasing trade war between United States & China, technology disruption,
challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Beijing Hengtong Innovation Luxwood
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Beijing Hengtong Innovation Luxwood can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Beijing Hengtong Innovation Luxwood, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Beijing Hengtong Innovation Luxwood 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 Beijing Hengtong Innovation Luxwood can be done for the following purposes –
1. Strategic planning of Beijing Hengtong Innovation Luxwood
2. Improving business portfolio management of Beijing Hengtong Innovation Luxwood
3. Assessing feasibility of the new initiative in China
4. Making a Construction Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Beijing Hengtong Innovation Luxwood
Strengths of Beijing Hengtong Innovation Luxwood | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Beijing Hengtong Innovation Luxwood are -
Digital Transformation in Construction Services industry
- digital transformation varies from industry to industry. For Beijing Hengtong Innovation Luxwood digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Beijing Hengtong Innovation Luxwood 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.
Cross disciplinary teams
– Horizontal connected teams at the Beijing Hengtong Innovation Luxwood 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.
Organizational Resilience of Beijing Hengtong Innovation Luxwood
– The covid-19 pandemic has put organizational resilience at the centre of everthing Beijing Hengtong Innovation Luxwood does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Beijing Hengtong Innovation Luxwood is one of the leading players in the Construction Services 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.
Operational resilience
– The operational resilience strategy of Beijing Hengtong Innovation Luxwood comprises – understanding the underlying the factors in the Construction Services 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.
Low bargaining power of suppliers
– Suppliers of Beijing Hengtong Innovation Luxwood in the Capital Goods sector have low bargaining power. Beijing Hengtong Innovation Luxwood has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Beijing Hengtong Innovation Luxwood to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Beijing Hengtong Innovation Luxwood 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 Beijing Hengtong Innovation Luxwood is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Beijing Hengtong Innovation Luxwood emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Beijing Hengtong Innovation Luxwood has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Beijing Hengtong Innovation Luxwood staying ahead in the Construction Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Beijing Hengtong Innovation Luxwood is one of the most innovative firm in Construction Services sector.
Sustainable margins compare to other players in Construction Services industry
– Beijing Hengtong Innovation Luxwood has clearly differentiated products in the market place. This has enabled Beijing Hengtong Innovation Luxwood to fetch slight price premium compare to the competitors in the Construction Services industry. The sustainable margins have also helped Beijing Hengtong Innovation Luxwood to invest into research and development (R&D) and innovation.
Training and development
– Beijing Hengtong Innovation Luxwood 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.
Analytics focus
– Beijing Hengtong Innovation Luxwood 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 Construction Services 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.
Weaknesses of Beijing Hengtong Innovation Luxwood | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Beijing Hengtong Innovation Luxwood are -
Need for greater diversity
– Beijing Hengtong Innovation Luxwood 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.
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 Beijing Hengtong Innovation Luxwood supply chain. Even after few cautionary changes, Beijing Hengtong Innovation Luxwood is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Beijing Hengtong Innovation Luxwood vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee of Beijing Hengtong Innovation Luxwood is just above the Construction Services 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.
Ability to respond to the competition
– As the decision making is very deliberative at Beijing Hengtong Innovation Luxwood, in the dynamic environment of Construction Services industry it has struggled to respond to the nimble upstart competition. Beijing Hengtong Innovation Luxwood has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Beijing Hengtong Innovation Luxwood has some of the most successful models in the Construction Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Beijing Hengtong Innovation Luxwood should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Beijing Hengtong Innovation Luxwood is dominated by functional specialists. It is not different from other players in the Construction Services industry, but Beijing Hengtong Innovation Luxwood needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Beijing Hengtong Innovation Luxwood to focus more on services in the Construction Services industry rather than just following the product oriented approach.
Aligning sales with marketing
– From the outside it seems that Beijing Hengtong Innovation Luxwood needs to have more collaboration between its sales team and marketing team. Sales professionals in the Construction Services industry have deep experience in developing customer relationships. Marketing department at Beijing Hengtong Innovation Luxwood can leverage the sales team experience to cultivate customer relationships as Beijing Hengtong Innovation Luxwood is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Beijing Hengtong Innovation Luxwood has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Construction Services industry over the last five years. Beijing Hengtong Innovation Luxwood even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Low market penetration in new markets
– Outside its home market of China, Beijing Hengtong Innovation Luxwood needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the Construction Services industry, Beijing Hengtong Innovation Luxwood needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Employees’ less understanding of Beijing Hengtong Innovation Luxwood strategy
– From the outside it seems that the employees of Beijing Hengtong Innovation Luxwood 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.
Beijing Hengtong Innovation Luxwood Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Beijing Hengtong Innovation Luxwood are -
Building a culture of innovation
– managers at Beijing Hengtong Innovation Luxwood 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 Construction Services industry.
Leveraging digital technologies
– Beijing Hengtong Innovation Luxwood 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.
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 Beijing Hengtong Innovation Luxwood 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.
Buying journey improvements
– Beijing Hengtong Innovation Luxwood can improve the customer journey of consumers in the Construction Services 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Beijing Hengtong Innovation Luxwood in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Construction Services industry, and it will provide faster access to the consumers.
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. Beijing Hengtong Innovation Luxwood can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Construction Services industry, but it has also influenced the consumer preferences. Beijing Hengtong Innovation Luxwood can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Beijing Hengtong Innovation Luxwood is facing challenges because of the dominance of functional experts in the organization. Beijing Hengtong Innovation Luxwood can utilize new technology in the field of Construction Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Using analytics as competitive advantage
– Beijing Hengtong Innovation Luxwood has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Construction Services sector. This continuous investment in analytics has enabled Beijing Hengtong Innovation Luxwood to build a competitive advantage using analytics. The analytics driven competitive advantage can help Beijing Hengtong Innovation Luxwood to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Beijing Hengtong Innovation Luxwood can use the latest technology developments to improve its manufacturing and designing process in Construction Services 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Beijing Hengtong Innovation Luxwood 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 Beijing Hengtong Innovation Luxwood to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Beijing Hengtong Innovation Luxwood can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help Beijing Hengtong Innovation Luxwood to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Beijing Hengtong Innovation Luxwood can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Beijing Hengtong Innovation Luxwood External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Beijing Hengtong Innovation Luxwood are -
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 Beijing Hengtong Innovation Luxwood in the Construction Services sector and impact the bottomline of the organization.
Environmental challenges
– Beijing Hengtong Innovation Luxwood 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. Beijing Hengtong Innovation Luxwood can take advantage of this fund but it will also bring new competitors in the Construction Services industry.
High dependence on third party suppliers
– Beijing Hengtong Innovation Luxwood 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Beijing Hengtong Innovation Luxwood in Construction Services industry. The Construction Services 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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Construction Services industry are lowering. It can presents Beijing Hengtong Innovation Luxwood with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Construction Services sector.
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 Beijing Hengtong Innovation Luxwood.
Shortening product life cycle
– it is one of the major threat that Beijing Hengtong Innovation Luxwood is facing in Construction Services 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 Beijing Hengtong Innovation Luxwood business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Beijing Hengtong Innovation Luxwood 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 Construction Services industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Beijing Hengtong Innovation Luxwood 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 Beijing Hengtong Innovation Luxwood prominent markets.
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. Beijing Hengtong Innovation Luxwood 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.
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. Beijing Hengtong Innovation Luxwood needs to understand the core reasons impacting the Construction Services industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Beijing Hengtong Innovation Luxwood Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Beijing Hengtong Innovation Luxwood 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 Beijing Hengtong Innovation Luxwood 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 Beijing Hengtong Innovation Luxwood 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 Beijing Hengtong Innovation Luxwood 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 Beijing Hengtong Innovation Luxwood needs to make to build a sustainable competitive advantage.