SWOT Analysis / TOWS Matrix for Hangzhou XZB Tech (China)
Based on various researches at Oak Spring University , Hangzhou XZB Tech is operating in a macro-environment that has been destablized by – supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, central banks are concerned over increasing inflation, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion,
increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Hangzhou XZB Tech
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Hangzhou XZB Tech can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hangzhou XZB Tech, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hangzhou XZB Tech operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Hangzhou XZB Tech can be done for the following purposes –
1. Strategic planning of Hangzhou XZB Tech
2. Improving business portfolio management of Hangzhou XZB Tech
3. Assessing feasibility of the new initiative in China
4. Making a Misc. Fabricated Products sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hangzhou XZB Tech
Strengths of Hangzhou XZB Tech | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hangzhou XZB Tech are -
Diverse revenue streams
– Hangzhou XZB Tech is present in almost all the verticals within the Misc. Fabricated Products industry. This has provided Hangzhou XZB Tech 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.
Innovation driven organization
– Hangzhou XZB Tech is one of the most innovative firm in Misc. Fabricated Products sector.
Digital Transformation in Misc. Fabricated Products industry
- digital transformation varies from industry to industry. For Hangzhou XZB Tech digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hangzhou XZB Tech has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Low bargaining power of suppliers
– Suppliers of Hangzhou XZB Tech in the Basic Materials sector have low bargaining power. Hangzhou XZB Tech has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hangzhou XZB Tech to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Hangzhou XZB Tech has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hangzhou XZB Tech has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
High switching costs
– The high switching costs that Hangzhou XZB Tech has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Analytics focus
– Hangzhou XZB Tech is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the Misc. Fabricated Products 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.
Cross disciplinary teams
– Horizontal connected teams at the Hangzhou XZB Tech are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Strong track record of project management in the Misc. Fabricated Products industry
– Hangzhou XZB Tech is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy of Hangzhou XZB Tech comprises – understanding the underlying the factors in the Misc. Fabricated Products industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Superior customer experience
– The customer experience strategy of Hangzhou XZB Tech in Misc. Fabricated Products industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Hangzhou XZB Tech is one of the leading players in the Misc. Fabricated Products 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.
Weaknesses of Hangzhou XZB Tech | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hangzhou XZB Tech are -
Slow decision making process
– As mentioned earlier in the report, Hangzhou XZB Tech has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Misc. Fabricated Products industry over the last five years. Hangzhou XZB Tech 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.
Interest costs
– Compare to the competition, Hangzhou XZB Tech has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
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 Hangzhou XZB Tech supply chain. Even after few cautionary changes, Hangzhou XZB Tech is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hangzhou XZB Tech vulnerable to further global disruptions in South East Asia.
Employees’ less understanding of Hangzhou XZB Tech strategy
– From the outside it seems that the employees of Hangzhou XZB Tech 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.
High operating costs
– Compare to the competitors, Hangzhou XZB Tech has high operating costs in the Misc. Fabricated Products industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Hangzhou XZB Tech lucrative customers.
Low market penetration in new markets
– Outside its home market of China, Hangzhou XZB Tech needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Hangzhou XZB Tech has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Misc. Fabricated Products industry using digital technology.
Increasing silos among functional specialists
– The organizational structure of Hangzhou XZB Tech is dominated by functional specialists. It is not different from other players in the Misc. Fabricated Products industry, but Hangzhou XZB Tech needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hangzhou XZB Tech to focus more on services in the Misc. Fabricated Products industry rather than just following the product oriented approach.
No frontier risks strategy
– From the 10K / annual statement of Hangzhou XZB Tech, it seems that company is thinking out the frontier risks that can impact Misc. Fabricated Products 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.
Lack of clear differentiation of Hangzhou XZB Tech products
– To increase the profitability and margins on the products, Hangzhou XZB Tech needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring in Misc. Fabricated Products industry
– The stress on hiring functional specialists at Hangzhou XZB Tech has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Hangzhou XZB Tech Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Hangzhou XZB Tech are -
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 Hangzhou XZB Tech to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hangzhou XZB Tech is facing challenges because of the dominance of functional experts in the organization. Hangzhou XZB Tech can utilize new technology in the field of Misc. Fabricated Products industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Use of Bitcoin and other crypto currencies for transactions in Misc. Fabricated Products industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Hangzhou XZB Tech in the Misc. Fabricated Products industry. Now Hangzhou XZB Tech can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Hangzhou XZB Tech 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 Misc. Fabricated Products industry.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hangzhou XZB Tech can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Hangzhou XZB Tech 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 Misc. Fabricated Products industry, but it has also influenced the consumer preferences. Hangzhou XZB Tech can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hangzhou XZB Tech 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
– Hangzhou XZB Tech can improve the customer journey of consumers in the Misc. Fabricated Products industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Loyalty marketing
– Hangzhou XZB Tech has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hangzhou XZB Tech can use these opportunities to build new business models that can help the communities that Hangzhou XZB Tech operates in. Secondly it can use opportunities from government spending in Misc. Fabricated Products sector.
Developing new processes and practices
– Hangzhou XZB Tech can develop new processes and procedures in Misc. Fabricated Products 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hangzhou XZB Tech to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Hangzhou XZB Tech to hire the very best people irrespective of their geographical location.
Threats Hangzhou XZB Tech External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Hangzhou XZB Tech are -
Shortening product life cycle
– it is one of the major threat that Hangzhou XZB Tech is facing in Misc. Fabricated Products sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Hangzhou XZB Tech needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Misc. Fabricated Products industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Hangzhou XZB Tech may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Misc. Fabricated Products sector.
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 Hangzhou XZB Tech in the Misc. Fabricated Products sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in Misc. Fabricated Products industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Hangzhou XZB Tech can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Hangzhou XZB Tech.
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. Hangzhou XZB Tech needs to understand the core reasons impacting the Misc. Fabricated Products industry. This will help it in building a better workplace.
Consumer confidence and its impact on Hangzhou XZB Tech demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in Misc. Fabricated Products industry and other sectors.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Misc. Fabricated Products industry are lowering. It can presents Hangzhou XZB Tech with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Misc. Fabricated Products sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hangzhou XZB Tech can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate Hangzhou XZB Tech prominent markets.
Increasing wage structure of Hangzhou XZB Tech
– 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 Hangzhou XZB Tech.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hangzhou XZB Tech in Misc. Fabricated Products industry. The Misc. Fabricated Products 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.
Weighted SWOT Analysis of Hangzhou XZB Tech Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Hangzhou XZB Tech needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of Hangzhou XZB Tech is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of Hangzhou XZB Tech is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Hangzhou XZB Tech to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Hangzhou XZB Tech needs to make to build a sustainable competitive advantage.