SWOT Analysis / TOWS Matrix for Beijing HuaYuanYiTong Thermal (China)
Based on various researches at Oak Spring University , Beijing HuaYuanYiTong Thermal is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, increasing commodity prices,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Beijing HuaYuanYiTong Thermal
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Beijing HuaYuanYiTong Thermal can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Beijing HuaYuanYiTong Thermal, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Beijing HuaYuanYiTong Thermal 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 HuaYuanYiTong Thermal can be done for the following purposes –
1. Strategic planning of Beijing HuaYuanYiTong Thermal
2. Improving business portfolio management of Beijing HuaYuanYiTong Thermal
3. Assessing feasibility of the new initiative in China
4. Making a Business Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Beijing HuaYuanYiTong Thermal
Strengths of Beijing HuaYuanYiTong Thermal | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Beijing HuaYuanYiTong Thermal are -
High brand equity
– Beijing HuaYuanYiTong Thermal has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Beijing HuaYuanYiTong Thermal to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Beijing HuaYuanYiTong Thermal 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 Business 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.
Digital Transformation in Business Services industry
- digital transformation varies from industry to industry. For Beijing HuaYuanYiTong Thermal digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Beijing HuaYuanYiTong Thermal 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
– Beijing HuaYuanYiTong Thermal has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Beijing HuaYuanYiTong Thermal 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.
Strong track record of project management in the Business Services industry
– Beijing HuaYuanYiTong Thermal is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Beijing HuaYuanYiTong Thermal
– The covid-19 pandemic has put organizational resilience at the centre of everthing Beijing HuaYuanYiTong Thermal does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Beijing HuaYuanYiTong Thermal 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 HuaYuanYiTong Thermal is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Beijing HuaYuanYiTong Thermal emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy of Beijing HuaYuanYiTong Thermal comprises – understanding the underlying the factors in the Business 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.
Diverse revenue streams
– Beijing HuaYuanYiTong Thermal is present in almost all the verticals within the Business Services industry. This has provided Beijing HuaYuanYiTong Thermal a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
High switching costs
– The high switching costs that Beijing HuaYuanYiTong Thermal 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
– Beijing HuaYuanYiTong Thermal has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Business Services industry. Secondly the value chain collaborators of Beijing HuaYuanYiTong Thermal have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Beijing HuaYuanYiTong Thermal in the Services sector have low bargaining power. Beijing HuaYuanYiTong Thermal has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Beijing HuaYuanYiTong Thermal to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses of Beijing HuaYuanYiTong Thermal | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Beijing HuaYuanYiTong Thermal are -
Skills based hiring in Business Services industry
– The stress on hiring functional specialists at Beijing HuaYuanYiTong Thermal 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.
Increasing silos among functional specialists
– The organizational structure of Beijing HuaYuanYiTong Thermal is dominated by functional specialists. It is not different from other players in the Business Services industry, but Beijing HuaYuanYiTong Thermal needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Beijing HuaYuanYiTong Thermal to focus more on services in the Business Services industry rather than just following the product oriented approach.
High dependence on Beijing HuaYuanYiTong Thermal ‘s star products
– The top 2 products and services of Beijing HuaYuanYiTong Thermal still accounts for major business revenue. This dependence on star products in Business Services industry has resulted into insufficient focus on developing new products, even though Beijing HuaYuanYiTong Thermal has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Beijing HuaYuanYiTong Thermal has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Business Services industry over the last five years. Beijing HuaYuanYiTong Thermal 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.
High operating costs
– Compare to the competitors, Beijing HuaYuanYiTong Thermal has high operating costs in the Business Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Beijing HuaYuanYiTong Thermal lucrative customers.
Lack of clear differentiation of Beijing HuaYuanYiTong Thermal products
– To increase the profitability and margins on the products, Beijing HuaYuanYiTong Thermal needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– From the 10K / annual statement of Beijing HuaYuanYiTong Thermal, it seems that company is thinking out the frontier risks that can impact Business Services 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.
High bargaining power of channel partners in Business Services industry
– because of the regulatory requirements in China, Beijing HuaYuanYiTong Thermal 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 Business Services industry.
Ability to respond to the competition
– As the decision making is very deliberative at Beijing HuaYuanYiTong Thermal, in the dynamic environment of Business Services industry it has struggled to respond to the nimble upstart competition. Beijing HuaYuanYiTong Thermal has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 HuaYuanYiTong Thermal supply chain. Even after few cautionary changes, Beijing HuaYuanYiTong Thermal is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Beijing HuaYuanYiTong Thermal vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Beijing HuaYuanYiTong Thermal has some of the most successful models in the Business Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Beijing HuaYuanYiTong Thermal should strive to include more intangible value offerings along with its core products and services.
Beijing HuaYuanYiTong Thermal Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Beijing HuaYuanYiTong Thermal are -
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Business Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Beijing HuaYuanYiTong Thermal 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. Beijing HuaYuanYiTong Thermal 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Beijing HuaYuanYiTong Thermal in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Business Services industry, and it will provide faster access to the consumers.
Loyalty marketing
– Beijing HuaYuanYiTong Thermal 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.
Using analytics as competitive advantage
– Beijing HuaYuanYiTong Thermal has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Business Services sector. This continuous investment in analytics has enabled Beijing HuaYuanYiTong Thermal to build a competitive advantage using analytics. The analytics driven competitive advantage can help Beijing HuaYuanYiTong Thermal to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Beijing HuaYuanYiTong Thermal to increase its market reach. Beijing HuaYuanYiTong Thermal 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Beijing HuaYuanYiTong Thermal 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 HuaYuanYiTong Thermal to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Beijing HuaYuanYiTong Thermal can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Buying journey improvements
– Beijing HuaYuanYiTong Thermal can improve the customer journey of consumers in the Business 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.
Leveraging digital technologies
– Beijing HuaYuanYiTong Thermal 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.
Creating value in data economy
– The success of analytics program of Beijing HuaYuanYiTong Thermal has opened avenues for new revenue streams for the organization in Business Services industry. This can help Beijing HuaYuanYiTong Thermal to build a more holistic ecosystem for Beijing HuaYuanYiTong Thermal products in the Business Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Beijing HuaYuanYiTong Thermal 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 Business Services industry.
Manufacturing automation
– Beijing HuaYuanYiTong Thermal can use the latest technology developments to improve its manufacturing and designing process in Business 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.
Learning at scale
– Online learning technologies has now opened space for Beijing HuaYuanYiTong Thermal 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.
Threats Beijing HuaYuanYiTong Thermal External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Beijing HuaYuanYiTong Thermal are -
Environmental challenges
– Beijing HuaYuanYiTong Thermal 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 HuaYuanYiTong Thermal can take advantage of this fund but it will also bring new competitors in the Business Services industry.
Easy access to finance
– Easy access to finance in Business Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Beijing HuaYuanYiTong Thermal can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Beijing HuaYuanYiTong Thermal 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 Business Services industry.
Regulatory challenges
– Beijing HuaYuanYiTong Thermal 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 Business Services industry regulations.
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 HuaYuanYiTong Thermal.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Beijing HuaYuanYiTong Thermal in Business Services industry. The Business 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Business Services industry are lowering. It can presents Beijing HuaYuanYiTong Thermal with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Business Services sector.
Consumer confidence and its impact on Beijing HuaYuanYiTong Thermal 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 Business Services industry and other sectors.
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 HuaYuanYiTong Thermal needs to understand the core reasons impacting the Business Services industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Beijing HuaYuanYiTong Thermal has witnessed rapid integration of technology during Covid-19 in the Business Services industry. As one of the leading players in the industry, Beijing HuaYuanYiTong Thermal needs to keep up with the evolution of technology in the Business Services 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.
High dependence on third party suppliers
– Beijing HuaYuanYiTong Thermal high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Beijing HuaYuanYiTong Thermal 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 HuaYuanYiTong Thermal prominent markets.
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.
Weighted SWOT Analysis of Beijing HuaYuanYiTong Thermal Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Beijing HuaYuanYiTong Thermal 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 HuaYuanYiTong Thermal 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 HuaYuanYiTong Thermal 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 HuaYuanYiTong Thermal 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 HuaYuanYiTong Thermal needs to make to build a sustainable competitive advantage.