Shandong Longquan Pipeline Eng A (2671) SWOT Analysis / TOWS Matrix / MBA Resources
Construction - Raw Materials
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Shandong Longquan Pipeline Eng A (China)
Based on various researches at Oak Spring University , Shandong Longquan Pipeline Eng A is operating in a macro-environment that has been destablized by – supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, there is increasing trade war between United States & China, technology disruption, geopolitical disruptions, increasing commodity prices,
customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Shandong Longquan Pipeline Eng A
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Shandong Longquan Pipeline Eng A can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shandong Longquan Pipeline Eng A, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shandong Longquan Pipeline Eng A 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 Longquan Pipeline Eng A can be done for the following purposes –
1. Strategic planning of Shandong Longquan Pipeline Eng A
2. Improving business portfolio management of Shandong Longquan Pipeline Eng A
3. Assessing feasibility of the new initiative in China
4. Making a Construction - Raw Materials sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Shandong Longquan Pipeline Eng A
Strengths of Shandong Longquan Pipeline Eng A | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shandong Longquan Pipeline Eng A are -
High switching costs
– The high switching costs that Shandong Longquan Pipeline Eng A 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.
Highly skilled collaborators
– Shandong Longquan Pipeline Eng A has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Construction - Raw Materials industry. Secondly the value chain collaborators of Shandong Longquan Pipeline Eng A have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Construction - Raw Materials industry
- digital transformation varies from industry to industry. For Shandong Longquan Pipeline Eng A digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shandong Longquan Pipeline Eng A 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.
Superior customer experience
– The customer experience strategy of Shandong Longquan Pipeline Eng A in Construction - Raw Materials industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Shandong Longquan Pipeline Eng A 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.
Operational resilience
– The operational resilience strategy of Shandong Longquan Pipeline Eng A comprises – understanding the underlying the factors in the Construction - Raw Materials 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.
Organizational Resilience of Shandong Longquan Pipeline Eng A
– The covid-19 pandemic has put organizational resilience at the centre of everthing Shandong Longquan Pipeline Eng A does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Shandong Longquan Pipeline Eng A 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 Longquan Pipeline Eng A is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Shandong Longquan Pipeline Eng A emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Construction - Raw Materials industry
– Shandong Longquan Pipeline Eng A has clearly differentiated products in the market place. This has enabled Shandong Longquan Pipeline Eng A to fetch slight price premium compare to the competitors in the Construction - Raw Materials industry. The sustainable margins have also helped Shandong Longquan Pipeline Eng A to invest into research and development (R&D) and innovation.
Innovation driven organization
– Shandong Longquan Pipeline Eng A is one of the most innovative firm in Construction - Raw Materials sector.
Ability to recruit top talent
– Shandong Longquan Pipeline Eng A is one of the leading players in the Construction - Raw Materials 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.
Training and development
– Shandong Longquan Pipeline Eng A 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.
Weaknesses of Shandong Longquan Pipeline Eng A | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shandong Longquan Pipeline Eng A are -
Interest costs
– Compare to the competition, Shandong Longquan Pipeline Eng A 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 harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Shandong Longquan Pipeline Eng A is slow explore the new channels of communication. These new channels of communication can help Shandong Longquan Pipeline Eng A to provide better information regarding Construction - Raw Materials products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of China, Shandong Longquan Pipeline Eng A needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on Shandong Longquan Pipeline Eng A ‘s star products
– The top 2 products and services of Shandong Longquan Pipeline Eng A still accounts for major business revenue. This dependence on star products in Construction - Raw Materials industry has resulted into insufficient focus on developing new products, even though Shandong Longquan Pipeline Eng A has relatively successful track record of launching new products.
High cash cycle compare to competitors
Shandong Longquan Pipeline Eng A has a high cash cycle compare to other players in the Construction - Raw Materials industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Increasing silos among functional specialists
– The organizational structure of Shandong Longquan Pipeline Eng A is dominated by functional specialists. It is not different from other players in the Construction - Raw Materials industry, but Shandong Longquan Pipeline Eng A needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Shandong Longquan Pipeline Eng A to focus more on services in the Construction - Raw Materials industry rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Shandong Longquan Pipeline Eng A is one of the leading players in the Construction - Raw Materials industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Construction - Raw Materials industry in last five years.
Skills based hiring in Construction - Raw Materials industry
– The stress on hiring functional specialists at Shandong Longquan Pipeline Eng A 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.
Compensation and incentives
– The revenue per employee of Shandong Longquan Pipeline Eng A is just above the Construction - Raw Materials 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.
Aligning sales with marketing
– From the outside it seems that Shandong Longquan Pipeline Eng A needs to have more collaboration between its sales team and marketing team. Sales professionals in the Construction - Raw Materials industry have deep experience in developing customer relationships. Marketing department at Shandong Longquan Pipeline Eng A can leverage the sales team experience to cultivate customer relationships as Shandong Longquan Pipeline Eng A is planning to shift buying processes online.
High bargaining power of channel partners in Construction - Raw Materials industry
– because of the regulatory requirements in China, Shandong Longquan Pipeline Eng A 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 Construction - Raw Materials industry.
Shandong Longquan Pipeline Eng A Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Shandong Longquan Pipeline Eng A are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Construction - Raw Materials industry, but it has also influenced the consumer preferences. Shandong Longquan Pipeline Eng A can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Shandong Longquan Pipeline Eng A has opened avenues for new revenue streams for the organization in Construction - Raw Materials industry. This can help Shandong Longquan Pipeline Eng A to build a more holistic ecosystem for Shandong Longquan Pipeline Eng A products in the Construction - Raw Materials industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Shandong Longquan Pipeline Eng A can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Shandong Longquan Pipeline Eng A to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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 Longquan Pipeline Eng A 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
– Shandong Longquan Pipeline Eng A can improve the customer journey of consumers in the Construction - Raw Materials 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Shandong Longquan Pipeline Eng A 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 Longquan Pipeline Eng A to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Shandong Longquan Pipeline Eng A can use the latest technology developments to improve its manufacturing and designing process in Construction - Raw Materials 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.
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 Longquan Pipeline Eng A can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Shandong Longquan Pipeline Eng A 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 - Raw Materials industry, and it will provide faster access to the consumers.
Leveraging digital technologies
– Shandong Longquan Pipeline Eng A 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.
Use of Bitcoin and other crypto currencies for transactions in Construction - Raw Materials industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Shandong Longquan Pipeline Eng A in the Construction - Raw Materials industry. Now Shandong Longquan Pipeline Eng A can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Shandong Longquan Pipeline Eng A 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 Shandong Longquan Pipeline Eng A to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Shandong Longquan Pipeline Eng A External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Shandong Longquan Pipeline Eng A are -
Stagnating economy with rate increase
– Shandong Longquan Pipeline Eng A 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 - Raw Materials industry.
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.
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.
Environmental challenges
– Shandong Longquan Pipeline Eng A 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 Longquan Pipeline Eng A can take advantage of this fund but it will also bring new competitors in the Construction - Raw Materials industry.
High dependence on third party suppliers
– Shandong Longquan Pipeline Eng A 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.
Easy access to finance
– Easy access to finance in Construction - Raw Materials industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Shandong Longquan Pipeline Eng A can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Shandong Longquan Pipeline Eng A is facing in Construction - Raw Materials 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 Shandong Longquan Pipeline Eng A business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Shandong Longquan Pipeline Eng A 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 Construction - Raw Materials industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Shandong Longquan Pipeline Eng A may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Construction - Raw Materials sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Shandong Longquan Pipeline Eng A in Construction - Raw Materials industry. The Construction - Raw Materials 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.
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 Shandong Longquan Pipeline Eng A.
Technology acceleration in Forth Industrial Revolution
– Shandong Longquan Pipeline Eng A has witnessed rapid integration of technology during Covid-19 in the Construction - Raw Materials industry. As one of the leading players in the industry, Shandong Longquan Pipeline Eng A needs to keep up with the evolution of technology in the Construction - Raw Materials 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 Shandong Longquan Pipeline Eng A Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Shandong Longquan Pipeline Eng A 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 Longquan Pipeline Eng A 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 Longquan Pipeline Eng A 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 Longquan Pipeline Eng A 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 Longquan Pipeline Eng A needs to make to build a sustainable competitive advantage.