SWOT Analysis / TOWS Matrix for Shanghai Vohringer Wood (China)
Based on various researches at Oak Spring University , Shanghai Vohringer Wood is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, there is backlash against globalization, technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing household debt because of falling income levels, increasing commodity prices, etc
Introduction to SWOT Analysis of Shanghai Vohringer Wood
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Shanghai Vohringer Wood can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shanghai Vohringer Wood, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shanghai Vohringer Wood 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 Shanghai Vohringer Wood can be done for the following purposes –
1. Strategic planning of Shanghai Vohringer Wood
2. Improving business portfolio management of Shanghai Vohringer Wood
3. Assessing feasibility of the new initiative in China
4. Making a Forestry & Wood Products sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Shanghai Vohringer Wood
Strengths of Shanghai Vohringer Wood | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shanghai Vohringer Wood are -
Strong track record of project management in the Forestry & Wood Products industry
– Shanghai Vohringer Wood 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
– Shanghai Vohringer Wood has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Shanghai Vohringer Wood 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 brand equity
– Shanghai Vohringer Wood has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Shanghai Vohringer Wood to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Shanghai Vohringer Wood has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Shanghai Vohringer Wood staying ahead in the Forestry & Wood Products industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Shanghai Vohringer Wood is present in almost all the verticals within the Forestry & Wood Products industry. This has provided Shanghai Vohringer Wood 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.
Ability to recruit top talent
– Shanghai Vohringer Wood is one of the leading players in the Forestry & Wood 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.
High switching costs
– The high switching costs that Shanghai Vohringer Wood 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.
Organizational Resilience of Shanghai Vohringer Wood
– The covid-19 pandemic has put organizational resilience at the centre of everthing Shanghai Vohringer Wood 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 Shanghai Vohringer Wood in Forestry & Wood Products industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Shanghai Vohringer Wood has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Forestry & Wood Products industry. Secondly the value chain collaborators of Shanghai Vohringer Wood have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Shanghai Vohringer Wood is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Shanghai Vohringer Wood is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Shanghai Vohringer Wood emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Shanghai Vohringer Wood in the Basic Materials sector have low bargaining power. Shanghai Vohringer Wood has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shanghai Vohringer Wood to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses of Shanghai Vohringer Wood | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shanghai Vohringer Wood are -
Employees’ less understanding of Shanghai Vohringer Wood strategy
– From the outside it seems that the employees of Shanghai Vohringer Wood 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.
Lack of clear differentiation of Shanghai Vohringer Wood products
– To increase the profitability and margins on the products, Shanghai Vohringer Wood 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 Shanghai Vohringer Wood needs to have more collaboration between its sales team and marketing team. Sales professionals in the Forestry & Wood Products industry have deep experience in developing customer relationships. Marketing department at Shanghai Vohringer Wood can leverage the sales team experience to cultivate customer relationships as Shanghai Vohringer Wood is planning to shift buying processes online.
Skills based hiring in Forestry & Wood Products industry
– The stress on hiring functional specialists at Shanghai Vohringer Wood 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.
High cash cycle compare to competitors
Shanghai Vohringer Wood has a high cash cycle compare to other players in the Forestry & Wood Products industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Increasing silos among functional specialists
– The organizational structure of Shanghai Vohringer Wood is dominated by functional specialists. It is not different from other players in the Forestry & Wood Products industry, but Shanghai Vohringer Wood needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Shanghai Vohringer Wood to focus more on services in the Forestry & Wood Products industry rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Shanghai Vohringer Wood 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 Forestry & Wood Products industry using digital technology.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Shanghai Vohringer Wood is slow explore the new channels of communication. These new channels of communication can help Shanghai Vohringer Wood to provide better information regarding Forestry & Wood Products products and services. It can also build an online community to further reach out to potential customers.
High dependence on Shanghai Vohringer Wood ‘s star products
– The top 2 products and services of Shanghai Vohringer Wood still accounts for major business revenue. This dependence on star products in Forestry & Wood Products industry has resulted into insufficient focus on developing new products, even though Shanghai Vohringer Wood has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of China, Shanghai Vohringer Wood needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Shanghai Vohringer Wood has some of the most successful models in the Forestry & Wood Products industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Shanghai Vohringer Wood should strive to include more intangible value offerings along with its core products and services.
Shanghai Vohringer Wood Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Shanghai Vohringer Wood 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, Shanghai Vohringer Wood can use these opportunities to build new business models that can help the communities that Shanghai Vohringer Wood operates in. Secondly it can use opportunities from government spending in Forestry & Wood Products sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Shanghai Vohringer Wood in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Forestry & Wood Products industry, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at Shanghai Vohringer Wood 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 Forestry & Wood Products industry.
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 Shanghai Vohringer Wood 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Shanghai Vohringer Wood can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Shanghai Vohringer Wood is facing challenges because of the dominance of functional experts in the organization. Shanghai Vohringer Wood can utilize new technology in the field of Forestry & Wood Products industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Using analytics as competitive advantage
– Shanghai Vohringer Wood has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Forestry & Wood Products sector. This continuous investment in analytics has enabled Shanghai Vohringer Wood to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shanghai Vohringer Wood to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Shanghai Vohringer Wood 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 Shanghai Vohringer Wood to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Shanghai Vohringer Wood 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.
Leveraging digital technologies
– Shanghai Vohringer Wood 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.
Developing new processes and practices
– Shanghai Vohringer Wood can develop new processes and procedures in Forestry & Wood 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Forestry & Wood Products industry, but it has also influenced the consumer preferences. Shanghai Vohringer Wood can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Shanghai Vohringer Wood can improve the customer journey of consumers in the Forestry & Wood 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.
Threats Shanghai Vohringer Wood External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Shanghai Vohringer Wood are -
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. Shanghai Vohringer Wood 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.
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 Shanghai Vohringer Wood.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Forestry & Wood Products industry are lowering. It can presents Shanghai Vohringer Wood with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Forestry & Wood Products sector.
Regulatory challenges
– Shanghai Vohringer Wood 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 Forestry & Wood Products industry regulations.
Environmental challenges
– Shanghai Vohringer Wood 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. Shanghai Vohringer Wood can take advantage of this fund but it will also bring new competitors in the Forestry & Wood Products industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Shanghai Vohringer Wood in Forestry & Wood Products industry. The Forestry & Wood 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Shanghai Vohringer Wood 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 Shanghai Vohringer Wood prominent markets.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Shanghai Vohringer Wood may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Forestry & Wood Products sector.
Increasing wage structure of Shanghai Vohringer Wood
– 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 Shanghai Vohringer Wood.
Technology acceleration in Forth Industrial Revolution
– Shanghai Vohringer Wood has witnessed rapid integration of technology during Covid-19 in the Forestry & Wood Products industry. As one of the leading players in the industry, Shanghai Vohringer Wood needs to keep up with the evolution of technology in the Forestry & Wood Products 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.
Consumer confidence and its impact on Shanghai Vohringer Wood 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 Forestry & Wood Products industry and other sectors.
Stagnating economy with rate increase
– Shanghai Vohringer Wood 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 Forestry & Wood Products industry.
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 Shanghai Vohringer Wood business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Shanghai Vohringer Wood Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Shanghai Vohringer Wood 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 Shanghai Vohringer Wood 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 Shanghai Vohringer Wood 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 Shanghai Vohringer Wood 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 Shanghai Vohringer Wood needs to make to build a sustainable competitive advantage.