Shenzhen WOTE Materials (2886) SWOT Analysis / TOWS Matrix / MBA Resources
Chemicals - Plastics & Rubber
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Shenzhen WOTE Materials (China)
Based on various researches at Oak Spring University , Shenzhen WOTE Materials is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings,
digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Shenzhen WOTE Materials
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Shenzhen WOTE Materials can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shenzhen WOTE Materials, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shenzhen WOTE Materials 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 Shenzhen WOTE Materials can be done for the following purposes –
1. Strategic planning of Shenzhen WOTE Materials
2. Improving business portfolio management of Shenzhen WOTE Materials
3. Assessing feasibility of the new initiative in China
4. Making a Chemicals - Plastics & Rubber sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Shenzhen WOTE Materials
Strengths of Shenzhen WOTE Materials | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shenzhen WOTE Materials are -
Effective Research and Development (R&D)
– Shenzhen WOTE Materials has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Shenzhen WOTE Materials staying ahead in the Chemicals - Plastics & Rubber industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Chemicals - Plastics & Rubber
– Shenzhen WOTE Materials is one of the leading players in the Chemicals - Plastics & Rubber industry in China. Over the years it has not only transformed the business landscape in the Chemicals - Plastics & Rubber industry in China but also across the existing markets. The ability to lead change has enabled Shenzhen WOTE Materials in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Shenzhen WOTE Materials 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.
Ability to recruit top talent
– Shenzhen WOTE Materials is one of the leading players in the Chemicals - Plastics & Rubber 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.
Organizational Resilience of Shenzhen WOTE Materials
– The covid-19 pandemic has put organizational resilience at the centre of everthing Shenzhen WOTE Materials does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy of Shenzhen WOTE Materials comprises – understanding the underlying the factors in the Chemicals - Plastics & Rubber 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.
Training and development
– Shenzhen WOTE Materials has one of the best training and development program in Basic Materials 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.
Low bargaining power of suppliers
– Suppliers of Shenzhen WOTE Materials in the Basic Materials sector have low bargaining power. Shenzhen WOTE Materials has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shenzhen WOTE Materials to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management in the Chemicals - Plastics & Rubber industry
– Shenzhen WOTE Materials is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Shenzhen WOTE Materials has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Shenzhen WOTE Materials 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.
Diverse revenue streams
– Shenzhen WOTE Materials is present in almost all the verticals within the Chemicals - Plastics & Rubber industry. This has provided Shenzhen WOTE Materials 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 brand equity
– Shenzhen WOTE Materials has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Shenzhen WOTE Materials to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses of Shenzhen WOTE Materials | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shenzhen WOTE Materials are -
Slow decision making process
– As mentioned earlier in the report, Shenzhen WOTE Materials has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Chemicals - Plastics & Rubber industry over the last five years. Shenzhen WOTE Materials 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.
Products dominated business model
– Even though Shenzhen WOTE Materials has some of the most successful models in the Chemicals - Plastics & Rubber industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Shenzhen WOTE Materials should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee of Shenzhen WOTE Materials is just above the Chemicals - Plastics & Rubber 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 Shenzhen WOTE Materials needs to have more collaboration between its sales team and marketing team. Sales professionals in the Chemicals - Plastics & Rubber industry have deep experience in developing customer relationships. Marketing department at Shenzhen WOTE Materials can leverage the sales team experience to cultivate customer relationships as Shenzhen WOTE Materials is planning to shift buying processes online.
Lack of clear differentiation of Shenzhen WOTE Materials products
– To increase the profitability and margins on the products, Shenzhen WOTE Materials needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ less understanding of Shenzhen WOTE Materials strategy
– From the outside it seems that the employees of Shenzhen WOTE Materials 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, Shenzhen WOTE Materials has high operating costs in the Chemicals - Plastics & Rubber industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Shenzhen WOTE Materials lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Shenzhen WOTE Materials 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 Chemicals - Plastics & Rubber industry using digital technology.
No frontier risks strategy
– From the 10K / annual statement of Shenzhen WOTE Materials, it seems that company is thinking out the frontier risks that can impact Chemicals - Plastics & Rubber 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.
Increasing silos among functional specialists
– The organizational structure of Shenzhen WOTE Materials is dominated by functional specialists. It is not different from other players in the Chemicals - Plastics & Rubber industry, but Shenzhen WOTE Materials needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Shenzhen WOTE Materials to focus more on services in the Chemicals - Plastics & Rubber industry rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative at Shenzhen WOTE Materials, in the dynamic environment of Chemicals - Plastics & Rubber industry it has struggled to respond to the nimble upstart competition. Shenzhen WOTE Materials has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Shenzhen WOTE Materials Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Shenzhen WOTE Materials are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Shenzhen WOTE Materials 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.
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 Shenzhen WOTE Materials 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.
Using analytics as competitive advantage
– Shenzhen WOTE Materials has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Chemicals - Plastics & Rubber sector. This continuous investment in analytics has enabled Shenzhen WOTE Materials to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shenzhen WOTE Materials to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Shenzhen WOTE Materials 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 Chemicals - Plastics & Rubber industry.
Creating value in data economy
– The success of analytics program of Shenzhen WOTE Materials has opened avenues for new revenue streams for the organization in Chemicals - Plastics & Rubber industry. This can help Shenzhen WOTE Materials to build a more holistic ecosystem for Shenzhen WOTE Materials products in the Chemicals - Plastics & Rubber industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Shenzhen WOTE Materials can use the latest technology developments to improve its manufacturing and designing process in Chemicals - Plastics & Rubber 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.
Use of Bitcoin and other crypto currencies for transactions in Chemicals - Plastics & Rubber industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Shenzhen WOTE Materials in the Chemicals - Plastics & Rubber industry. Now Shenzhen WOTE Materials can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Shenzhen WOTE Materials 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Shenzhen WOTE Materials in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Chemicals - Plastics & Rubber industry, and it will provide faster access to the consumers.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Shenzhen WOTE Materials 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 Shenzhen WOTE Materials to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Shenzhen WOTE Materials can improve the customer journey of consumers in the Chemicals - Plastics & Rubber 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
– Shenzhen WOTE Materials 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Shenzhen WOTE Materials can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Shenzhen WOTE Materials External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Shenzhen WOTE Materials are -
High dependence on third party suppliers
– Shenzhen WOTE Materials 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.
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.
Shortening product life cycle
– it is one of the major threat that Shenzhen WOTE Materials is facing in Chemicals - Plastics & Rubber sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Shenzhen WOTE Materials 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 Shenzhen WOTE Materials prominent markets.
Consumer confidence and its impact on Shenzhen WOTE Materials 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 Chemicals - Plastics & Rubber 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. Shenzhen WOTE Materials needs to understand the core reasons impacting the Chemicals - Plastics & Rubber industry. This will help it in building a better workplace.
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 Shenzhen WOTE Materials in the Chemicals - Plastics & Rubber sector and impact the bottomline of the organization.
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. Shenzhen WOTE Materials 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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Chemicals - Plastics & Rubber industry are lowering. It can presents Shenzhen WOTE Materials with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Chemicals - Plastics & Rubber sector.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Shenzhen WOTE Materials.
Increasing wage structure of Shenzhen WOTE Materials
– 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 Shenzhen WOTE Materials.
Regulatory challenges
– Shenzhen WOTE Materials 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 Chemicals - Plastics & Rubber industry regulations.
Weighted SWOT Analysis of Shenzhen WOTE Materials Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Shenzhen WOTE Materials 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 Shenzhen WOTE Materials 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 Shenzhen WOTE Materials 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 Shenzhen WOTE Materials 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 Shenzhen WOTE Materials needs to make to build a sustainable competitive advantage.