Fujian Haiyuan Auto Equipments (2529) SWOT Analysis / TOWS Matrix / MBA Resources
Auto & Truck Manufacturers
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Fujian Haiyuan Auto Equipments (China)
Based on various researches at Oak Spring University , Fujian Haiyuan Auto Equipments is operating in a macro-environment that has been destablized by – increasing energy prices, there is backlash against globalization, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels,
wage bills are increasing, geopolitical disruptions, etc
Introduction to SWOT Analysis of Fujian Haiyuan Auto Equipments
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Fujian Haiyuan Auto Equipments can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fujian Haiyuan Auto Equipments, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fujian Haiyuan Auto Equipments 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 Fujian Haiyuan Auto Equipments can be done for the following purposes –
1. Strategic planning of Fujian Haiyuan Auto Equipments
2. Improving business portfolio management of Fujian Haiyuan Auto Equipments
3. Assessing feasibility of the new initiative in China
4. Making a Auto & Truck Manufacturers sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Fujian Haiyuan Auto Equipments
Strengths of Fujian Haiyuan Auto Equipments | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fujian Haiyuan Auto Equipments are -
Diverse revenue streams
– Fujian Haiyuan Auto Equipments is present in almost all the verticals within the Auto & Truck Manufacturers industry. This has provided Fujian Haiyuan Auto Equipments 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.
Low bargaining power of suppliers
– Suppliers of Fujian Haiyuan Auto Equipments in the Consumer Cyclical sector have low bargaining power. Fujian Haiyuan Auto Equipments has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Fujian Haiyuan Auto Equipments to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Auto & Truck Manufacturers
– Fujian Haiyuan Auto Equipments is one of the leading players in the Auto & Truck Manufacturers industry in China. Over the years it has not only transformed the business landscape in the Auto & Truck Manufacturers industry in China but also across the existing markets. The ability to lead change has enabled Fujian Haiyuan Auto Equipments in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy of Fujian Haiyuan Auto Equipments comprises – understanding the underlying the factors in the Auto & Truck Manufacturers 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.
Cross disciplinary teams
– Horizontal connected teams at the Fujian Haiyuan Auto Equipments 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.
Ability to recruit top talent
– Fujian Haiyuan Auto Equipments is one of the leading players in the Auto & Truck Manufacturers 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.
Highly skilled collaborators
– Fujian Haiyuan Auto Equipments has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Auto & Truck Manufacturers industry. Secondly the value chain collaborators of Fujian Haiyuan Auto Equipments have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management in the Auto & Truck Manufacturers industry
– Fujian Haiyuan Auto Equipments 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 Fujian Haiyuan Auto Equipments
– The covid-19 pandemic has put organizational resilience at the centre of everthing Fujian Haiyuan Auto Equipments does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Fujian Haiyuan Auto Equipments in Auto & Truck Manufacturers industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Fujian Haiyuan Auto Equipments is one of the most innovative firm in Auto & Truck Manufacturers sector.
Analytics focus
– Fujian Haiyuan Auto Equipments 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 Auto & Truck Manufacturers 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 Fujian Haiyuan Auto Equipments | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Fujian Haiyuan Auto Equipments are -
Lack of clear differentiation of Fujian Haiyuan Auto Equipments products
– To increase the profitability and margins on the products, Fujian Haiyuan Auto Equipments needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– From the outside it seems that Fujian Haiyuan Auto Equipments needs to have more collaboration between its sales team and marketing team. Sales professionals in the Auto & Truck Manufacturers industry have deep experience in developing customer relationships. Marketing department at Fujian Haiyuan Auto Equipments can leverage the sales team experience to cultivate customer relationships as Fujian Haiyuan Auto Equipments is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Fujian Haiyuan Auto Equipments has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Auto & Truck Manufacturers industry over the last five years. Fujian Haiyuan Auto Equipments 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 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 Fujian Haiyuan Auto Equipments supply chain. Even after few cautionary changes, Fujian Haiyuan Auto Equipments is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Fujian Haiyuan Auto Equipments vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Fujian Haiyuan Auto Equipments is dominated by functional specialists. It is not different from other players in the Auto & Truck Manufacturers industry, but Fujian Haiyuan Auto Equipments needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Fujian Haiyuan Auto Equipments to focus more on services in the Auto & Truck Manufacturers industry rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee of Fujian Haiyuan Auto Equipments is just above the Auto & Truck Manufacturers 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.
High bargaining power of channel partners in Auto & Truck Manufacturers industry
– because of the regulatory requirements in China, Fujian Haiyuan Auto Equipments 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 Auto & Truck Manufacturers industry.
Products dominated business model
– Even though Fujian Haiyuan Auto Equipments has some of the most successful models in the Auto & Truck Manufacturers industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Fujian Haiyuan Auto Equipments should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Fujian Haiyuan Auto Equipments is one of the leading players in the Auto & Truck Manufacturers industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Auto & Truck Manufacturers industry in last five years.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Fujian Haiyuan Auto Equipments is slow explore the new channels of communication. These new channels of communication can help Fujian Haiyuan Auto Equipments to provide better information regarding Auto & Truck Manufacturers products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Fujian Haiyuan Auto Equipments 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.
Fujian Haiyuan Auto Equipments Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Fujian Haiyuan Auto Equipments are -
Creating value in data economy
– The success of analytics program of Fujian Haiyuan Auto Equipments has opened avenues for new revenue streams for the organization in Auto & Truck Manufacturers industry. This can help Fujian Haiyuan Auto Equipments to build a more holistic ecosystem for Fujian Haiyuan Auto Equipments products in the Auto & Truck Manufacturers industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Fujian Haiyuan Auto Equipments 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Fujian Haiyuan Auto Equipments can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Fujian Haiyuan Auto Equipments 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Fujian Haiyuan Auto Equipments 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 Fujian Haiyuan Auto Equipments to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Fujian Haiyuan Auto Equipments can improve the customer journey of consumers in the Auto & Truck Manufacturers 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Auto & Truck Manufacturers industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Fujian Haiyuan Auto Equipments 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. Fujian Haiyuan Auto Equipments 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.
Leveraging digital technologies
– Fujian Haiyuan Auto Equipments 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 Fujian Haiyuan Auto Equipments 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Auto & Truck Manufacturers industry, but it has also influenced the consumer preferences. Fujian Haiyuan Auto Equipments can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Fujian Haiyuan Auto Equipments 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 Fujian Haiyuan Auto Equipments to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Fujian Haiyuan Auto Equipments is facing challenges because of the dominance of functional experts in the organization. Fujian Haiyuan Auto Equipments can utilize new technology in the field of Auto & Truck Manufacturers industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Learning at scale
– Online learning technologies has now opened space for Fujian Haiyuan Auto Equipments 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 Fujian Haiyuan Auto Equipments External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Fujian Haiyuan Auto Equipments are -
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.
Stagnating economy with rate increase
– Fujian Haiyuan Auto Equipments 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 Auto & Truck Manufacturers industry.
Easy access to finance
– Easy access to finance in Auto & Truck Manufacturers industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Fujian Haiyuan Auto Equipments can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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 Fujian Haiyuan Auto Equipments business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Fujian Haiyuan Auto Equipments 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 Auto & Truck Manufacturers industry regulations.
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. Fujian Haiyuan Auto Equipments 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Fujian Haiyuan Auto Equipments 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 Fujian Haiyuan Auto Equipments prominent markets.
Environmental challenges
– Fujian Haiyuan Auto Equipments 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. Fujian Haiyuan Auto Equipments can take advantage of this fund but it will also bring new competitors in the Auto & Truck Manufacturers industry.
Consumer confidence and its impact on Fujian Haiyuan Auto Equipments 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 Auto & Truck Manufacturers industry and other sectors.
High dependence on third party suppliers
– Fujian Haiyuan Auto Equipments 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Fujian Haiyuan Auto Equipments may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Auto & Truck Manufacturers sector.
Technology acceleration in Forth Industrial Revolution
– Fujian Haiyuan Auto Equipments has witnessed rapid integration of technology during Covid-19 in the Auto & Truck Manufacturers industry. As one of the leading players in the industry, Fujian Haiyuan Auto Equipments needs to keep up with the evolution of technology in the Auto & Truck Manufacturers 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 Fujian Haiyuan Auto Equipments Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Fujian Haiyuan Auto Equipments 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 Fujian Haiyuan Auto Equipments 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 Fujian Haiyuan Auto Equipments 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 Fujian Haiyuan Auto Equipments 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 Fujian Haiyuan Auto Equipments needs to make to build a sustainable competitive advantage.