SWOT Analysis / TOWS Matrix for Hangzhou Huaxing Chuangye (China)
Based on various researches at Oak Spring University , Hangzhou Huaxing Chuangye is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, wage bills are increasing, increasing energy prices, technology disruption, there is backlash against globalization, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China,
challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Hangzhou Huaxing Chuangye
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Hangzhou Huaxing Chuangye can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hangzhou Huaxing Chuangye, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hangzhou Huaxing Chuangye operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Hangzhou Huaxing Chuangye can be done for the following purposes –
1. Strategic planning of Hangzhou Huaxing Chuangye
2. Improving business portfolio management of Hangzhou Huaxing Chuangye
3. Assessing feasibility of the new initiative in China
4. Making a Communications Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hangzhou Huaxing Chuangye
Strengths of Hangzhou Huaxing Chuangye | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hangzhou Huaxing Chuangye are -
High brand equity
– Hangzhou Huaxing Chuangye has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hangzhou Huaxing Chuangye to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy of Hangzhou Huaxing Chuangye comprises – understanding the underlying the factors in the Communications Services 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.
Innovation driven organization
– Hangzhou Huaxing Chuangye is one of the most innovative firm in Communications Services sector.
Sustainable margins compare to other players in Communications Services industry
– Hangzhou Huaxing Chuangye has clearly differentiated products in the market place. This has enabled Hangzhou Huaxing Chuangye to fetch slight price premium compare to the competitors in the Communications Services industry. The sustainable margins have also helped Hangzhou Huaxing Chuangye to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Hangzhou Huaxing Chuangye has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Communications Services industry. Secondly the value chain collaborators of Hangzhou Huaxing Chuangye have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management in the Communications Services industry
– Hangzhou Huaxing Chuangye is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Hangzhou Huaxing Chuangye in Communications Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Hangzhou Huaxing Chuangye has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hangzhou Huaxing Chuangye 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.
Ability to lead change in Communications Services
– Hangzhou Huaxing Chuangye is one of the leading players in the Communications Services industry in China. Over the years it has not only transformed the business landscape in the Communications Services industry in China but also across the existing markets. The ability to lead change has enabled Hangzhou Huaxing Chuangye in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Hangzhou Huaxing Chuangye is present in almost all the verticals within the Communications Services industry. This has provided Hangzhou Huaxing Chuangye 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
– Hangzhou Huaxing Chuangye is one of the leading players in the Communications Services 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.
Cross disciplinary teams
– Horizontal connected teams at the Hangzhou Huaxing Chuangye 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.
Weaknesses of Hangzhou Huaxing Chuangye | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hangzhou Huaxing Chuangye are -
High dependence on Hangzhou Huaxing Chuangye ‘s star products
– The top 2 products and services of Hangzhou Huaxing Chuangye still accounts for major business revenue. This dependence on star products in Communications Services industry has resulted into insufficient focus on developing new products, even though Hangzhou Huaxing Chuangye has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Hangzhou Huaxing Chuangye is dominated by functional specialists. It is not different from other players in the Communications Services industry, but Hangzhou Huaxing Chuangye needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hangzhou Huaxing Chuangye to focus more on services in the Communications Services industry rather than just following the product oriented approach.
No frontier risks strategy
– From the 10K / annual statement of Hangzhou Huaxing Chuangye, it seems that company is thinking out the frontier risks that can impact Communications Services 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.
High cash cycle compare to competitors
Hangzhou Huaxing Chuangye has a high cash cycle compare to other players in the Communications Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Lack of clear differentiation of Hangzhou Huaxing Chuangye products
– To increase the profitability and margins on the products, Hangzhou Huaxing Chuangye needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Hangzhou Huaxing Chuangye 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 bargaining power of channel partners in Communications Services industry
– because of the regulatory requirements in China, Hangzhou Huaxing Chuangye 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 Communications Services industry.
Workers concerns about automation
– As automation is fast increasing in the Communications Services industry, Hangzhou Huaxing Chuangye needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow to strategic competitive environment developments
– As Hangzhou Huaxing Chuangye is one of the leading players in the Communications Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Communications Services industry in last five years.
Ability to respond to the competition
– As the decision making is very deliberative at Hangzhou Huaxing Chuangye, in the dynamic environment of Communications Services industry it has struggled to respond to the nimble upstart competition. Hangzhou Huaxing Chuangye has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, Hangzhou Huaxing Chuangye has high operating costs in the Communications Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Hangzhou Huaxing Chuangye lucrative customers.
Hangzhou Huaxing Chuangye Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Hangzhou Huaxing Chuangye are -
Building a culture of innovation
– managers at Hangzhou Huaxing Chuangye 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 Communications Services industry.
Buying journey improvements
– Hangzhou Huaxing Chuangye can improve the customer journey of consumers in the Communications Services 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hangzhou Huaxing Chuangye in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Communications Services industry, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hangzhou Huaxing Chuangye 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Communications Services industry, but it has also influenced the consumer preferences. Hangzhou Huaxing Chuangye can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Hangzhou Huaxing Chuangye can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Hangzhou Huaxing Chuangye to increase its market reach. Hangzhou Huaxing Chuangye will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Leveraging digital technologies
– Hangzhou Huaxing Chuangye 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hangzhou Huaxing Chuangye 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 Hangzhou Huaxing Chuangye to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hangzhou Huaxing Chuangye to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Hangzhou Huaxing Chuangye to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Communications Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Hangzhou Huaxing Chuangye 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. Hangzhou Huaxing Chuangye 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.
Creating value in data economy
– The success of analytics program of Hangzhou Huaxing Chuangye has opened avenues for new revenue streams for the organization in Communications Services industry. This can help Hangzhou Huaxing Chuangye to build a more holistic ecosystem for Hangzhou Huaxing Chuangye products in the Communications Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hangzhou Huaxing Chuangye can use these opportunities to build new business models that can help the communities that Hangzhou Huaxing Chuangye operates in. Secondly it can use opportunities from government spending in Communications Services sector.
Threats Hangzhou Huaxing Chuangye External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Hangzhou Huaxing Chuangye are -
Environmental challenges
– Hangzhou Huaxing Chuangye 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. Hangzhou Huaxing Chuangye can take advantage of this fund but it will also bring new competitors in the Communications Services industry.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Hangzhou Huaxing Chuangye in the Communications Services sector and impact the bottomline of the organization.
Increasing wage structure of Hangzhou Huaxing Chuangye
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Hangzhou Huaxing Chuangye.
Stagnating economy with rate increase
– Hangzhou Huaxing Chuangye 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 Communications Services industry.
Regulatory challenges
– Hangzhou Huaxing Chuangye 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 Communications Services 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. Hangzhou Huaxing Chuangye 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 acceleration in Forth Industrial Revolution
– Hangzhou Huaxing Chuangye has witnessed rapid integration of technology during Covid-19 in the Communications Services industry. As one of the leading players in the industry, Hangzhou Huaxing Chuangye needs to keep up with the evolution of technology in the Communications Services 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.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Hangzhou Huaxing Chuangye needs to understand the core reasons impacting the Communications Services industry. This will help it in building a better workplace.
Consumer confidence and its impact on Hangzhou Huaxing Chuangye 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 Communications Services industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Hangzhou Huaxing Chuangye may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Communications Services sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hangzhou Huaxing Chuangye can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate Hangzhou Huaxing Chuangye prominent markets.
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.
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.
Weighted SWOT Analysis of Hangzhou Huaxing Chuangye Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Hangzhou Huaxing Chuangye needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of Hangzhou Huaxing Chuangye is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of Hangzhou Huaxing Chuangye is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Hangzhou Huaxing Chuangye to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Hangzhou Huaxing Chuangye needs to make to build a sustainable competitive advantage.
