Based on various researches at Oak Spring University , NanJing Sanchao Advanced Materials is operating in a macro-environment that has been destablized by – increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, geopolitical disruptions,
increasing commodity prices, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of NanJing Sanchao Advanced Materials
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that NanJing Sanchao Advanced Materials can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the NanJing Sanchao Advanced Materials, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which NanJing Sanchao Advanced 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 NanJing Sanchao Advanced Materials can be done for the following purposes –
1. Strategic planning of NanJing Sanchao Advanced Materials
2. Improving business portfolio management of NanJing Sanchao Advanced Materials
3. Assessing feasibility of the new initiative in China
4. Making a Misc. Capital Goods sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of NanJing Sanchao Advanced Materials
Strengths of NanJing Sanchao Advanced Materials | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of NanJing Sanchao Advanced Materials are -
Successful track record of launching new products
– NanJing Sanchao Advanced Materials has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. NanJing Sanchao Advanced 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.
Analytics focus
– NanJing Sanchao Advanced Materials 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. Capital Goods 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.
Low bargaining power of suppliers
– Suppliers of NanJing Sanchao Advanced Materials in the Capital Goods sector have low bargaining power. NanJing Sanchao Advanced Materials has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps NanJing Sanchao Advanced Materials to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Misc. Capital Goods
– NanJing Sanchao Advanced Materials is one of the leading players in the Misc. Capital Goods industry in China. Over the years it has not only transformed the business landscape in the Misc. Capital Goods industry in China but also across the existing markets. The ability to lead change has enabled NanJing Sanchao Advanced Materials in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the NanJing Sanchao Advanced Materials 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.
Training and development
– NanJing Sanchao Advanced Materials has one of the best training and development program in Capital Goods industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Operational resilience
– The operational resilience strategy of NanJing Sanchao Advanced Materials comprises – understanding the underlying the factors in the Misc. Capital Goods 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.
High switching costs
– The high switching costs that NanJing Sanchao Advanced 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.
Digital Transformation in Misc. Capital Goods industry
- digital transformation varies from industry to industry. For NanJing Sanchao Advanced Materials digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. NanJing Sanchao Advanced Materials 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.
Organizational Resilience of NanJing Sanchao Advanced Materials
– The covid-19 pandemic has put organizational resilience at the centre of everthing NanJing Sanchao Advanced Materials does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management in the Misc. Capital Goods industry
– NanJing Sanchao Advanced 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.
Effective Research and Development (R&D)
– NanJing Sanchao Advanced Materials has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – NanJing Sanchao Advanced Materials staying ahead in the Misc. Capital Goods industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses of NanJing Sanchao Advanced Materials | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of NanJing Sanchao Advanced Materials are -
Increasing silos among functional specialists
– The organizational structure of NanJing Sanchao Advanced Materials is dominated by functional specialists. It is not different from other players in the Misc. Capital Goods industry, but NanJing Sanchao Advanced Materials needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help NanJing Sanchao Advanced Materials to focus more on services in the Misc. Capital Goods industry rather than just following the product oriented approach.
Interest costs
– Compare to the competition, NanJing Sanchao Advanced Materials 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 operating costs
– Compare to the competitors, NanJing Sanchao Advanced Materials has high operating costs in the Misc. Capital Goods industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract NanJing Sanchao Advanced Materials lucrative customers.
Products dominated business model
– Even though NanJing Sanchao Advanced Materials has some of the most successful models in the Misc. Capital Goods industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. NanJing Sanchao Advanced Materials should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners in Misc. Capital Goods industry
– because of the regulatory requirements in China, NanJing Sanchao Advanced Materials 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 Misc. Capital Goods industry.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, NanJing Sanchao Advanced Materials is slow explore the new channels of communication. These new channels of communication can help NanJing Sanchao Advanced Materials to provide better information regarding Misc. Capital Goods products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of NanJing Sanchao Advanced Materials products
– To increase the profitability and margins on the products, NanJing Sanchao Advanced Materials needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee of NanJing Sanchao Advanced Materials is just above the Misc. Capital Goods 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.
Need for greater diversity
– NanJing Sanchao Advanced Materials 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.
Employees’ less understanding of NanJing Sanchao Advanced Materials strategy
– From the outside it seems that the employees of NanJing Sanchao Advanced 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.
Slow to strategic competitive environment developments
– As NanJing Sanchao Advanced Materials is one of the leading players in the Misc. Capital Goods industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Misc. Capital Goods industry in last five years.
NanJing Sanchao Advanced Materials Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of NanJing Sanchao Advanced Materials are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, NanJing Sanchao Advanced Materials can use these opportunities to build new business models that can help the communities that NanJing Sanchao Advanced Materials operates in. Secondly it can use opportunities from government spending in Misc. Capital Goods sector.
Leveraging digital technologies
– NanJing Sanchao Advanced 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.
Creating value in data economy
– The success of analytics program of NanJing Sanchao Advanced Materials has opened avenues for new revenue streams for the organization in Misc. Capital Goods industry. This can help NanJing Sanchao Advanced Materials to build a more holistic ecosystem for NanJing Sanchao Advanced Materials products in the Misc. Capital Goods industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for NanJing Sanchao Advanced 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 NanJing Sanchao Advanced Materials to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects NanJing Sanchao Advanced Materials can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, NanJing Sanchao Advanced Materials 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 NanJing Sanchao Advanced Materials to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Use of Bitcoin and other crypto currencies for transactions in Misc. Capital Goods industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for NanJing Sanchao Advanced Materials in the Misc. Capital Goods industry. Now NanJing Sanchao Advanced Materials can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, NanJing Sanchao Advanced 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.
Building a culture of innovation
– managers at NanJing Sanchao Advanced 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 Misc. Capital Goods industry.
Using analytics as competitive advantage
– NanJing Sanchao Advanced Materials has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Misc. Capital Goods sector. This continuous investment in analytics has enabled NanJing Sanchao Advanced Materials to build a competitive advantage using analytics. The analytics driven competitive advantage can help NanJing Sanchao Advanced Materials to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Lowering marketing communication costs
– 5G expansion will open new opportunities for NanJing Sanchao Advanced 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 Misc. Capital Goods industry, and it will provide faster access to the consumers.
Loyalty marketing
– NanJing Sanchao Advanced 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.
Buying journey improvements
– NanJing Sanchao Advanced Materials can improve the customer journey of consumers in the Misc. Capital Goods 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.
Threats NanJing Sanchao Advanced Materials External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of NanJing Sanchao Advanced Materials are -
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 NanJing Sanchao Advanced Materials in the Misc. Capital Goods sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– NanJing Sanchao Advanced Materials 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 Misc. Capital Goods industry.
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.
Increasing wage structure of NanJing Sanchao Advanced 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 NanJing Sanchao Advanced Materials.
Easy access to finance
– Easy access to finance in Misc. Capital Goods industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. NanJing Sanchao Advanced Materials can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that NanJing Sanchao Advanced Materials is facing in Misc. Capital Goods sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Environmental challenges
– NanJing Sanchao Advanced Materials 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. NanJing Sanchao Advanced Materials can take advantage of this fund but it will also bring new competitors in the Misc. Capital Goods industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, NanJing Sanchao Advanced 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 NanJing Sanchao Advanced Materials prominent markets.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, NanJing Sanchao Advanced Materials 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. Capital Goods sector.
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. NanJing Sanchao Advanced 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.
Consumer confidence and its impact on NanJing Sanchao Advanced 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 Misc. Capital Goods industry and other sectors.
High dependence on third party suppliers
– NanJing Sanchao Advanced 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.
Weighted SWOT Analysis of NanJing Sanchao Advanced Materials Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at NanJing Sanchao Advanced 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 NanJing Sanchao Advanced 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 NanJing Sanchao Advanced 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 NanJing Sanchao Advanced 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 NanJing Sanchao Advanced Materials needs to make to build a sustainable competitive advantage.