SWOT Analysis / TOWS Matrix for Guangdong Songfa Ceramics (China)
Based on various researches at Oak Spring University , Guangdong Songfa Ceramics 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%, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs,
wage bills are increasing, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Guangdong Songfa Ceramics
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Guangdong Songfa Ceramics can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Guangdong Songfa Ceramics, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Guangdong Songfa Ceramics 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 Guangdong Songfa Ceramics can be done for the following purposes –
1. Strategic planning of Guangdong Songfa Ceramics
2. Improving business portfolio management of Guangdong Songfa Ceramics
3. Assessing feasibility of the new initiative in China
4. Making a Personal & Household Prods. sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Guangdong Songfa Ceramics
Strengths of Guangdong Songfa Ceramics | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Guangdong Songfa Ceramics are -
Ability to lead change in Personal & Household Prods.
– Guangdong Songfa Ceramics is one of the leading players in the Personal & Household Prods. industry in China. Over the years it has not only transformed the business landscape in the Personal & Household Prods. industry in China but also across the existing markets. The ability to lead change has enabled Guangdong Songfa Ceramics in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Personal & Household Prods. industry
– Guangdong Songfa Ceramics has clearly differentiated products in the market place. This has enabled Guangdong Songfa Ceramics to fetch slight price premium compare to the competitors in the Personal & Household Prods. industry. The sustainable margins have also helped Guangdong Songfa Ceramics to invest into research and development (R&D) and innovation.
Training and development
– Guangdong Songfa Ceramics has one of the best training and development program in Consumer/Non-Cyclical 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.
Organizational Resilience of Guangdong Songfa Ceramics
– The covid-19 pandemic has put organizational resilience at the centre of everthing Guangdong Songfa Ceramics 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 Personal & Household Prods. industry
– Guangdong Songfa Ceramics is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Personal & Household Prods. industry
- digital transformation varies from industry to industry. For Guangdong Songfa Ceramics digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Guangdong Songfa Ceramics 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.
High brand equity
– Guangdong Songfa Ceramics has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Guangdong Songfa Ceramics to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Guangdong Songfa Ceramics 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 Personal & Household Prods. 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.
Learning organization
- Guangdong Songfa Ceramics 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 Guangdong Songfa Ceramics is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Guangdong Songfa Ceramics emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Guangdong Songfa Ceramics in Personal & Household Prods. industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Guangdong Songfa Ceramics in the Consumer/Non-Cyclical sector have low bargaining power. Guangdong Songfa Ceramics has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Guangdong Songfa Ceramics to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Guangdong Songfa Ceramics has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Personal & Household Prods. industry. Secondly the value chain collaborators of Guangdong Songfa Ceramics have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses of Guangdong Songfa Ceramics | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Guangdong Songfa Ceramics are -
High bargaining power of channel partners in Personal & Household Prods. industry
– because of the regulatory requirements in China, Guangdong Songfa Ceramics 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 Personal & Household Prods. industry.
Slow to strategic competitive environment developments
– As Guangdong Songfa Ceramics is one of the leading players in the Personal & Household Prods. industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Personal & Household Prods. industry in last five years.
Workers concerns about automation
– As automation is fast increasing in the Personal & Household Prods. industry, Guangdong Songfa Ceramics 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.
Ability to respond to the competition
– As the decision making is very deliberative at Guangdong Songfa Ceramics, in the dynamic environment of Personal & Household Prods. industry it has struggled to respond to the nimble upstart competition. Guangdong Songfa Ceramics has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Guangdong Songfa Ceramics 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 Personal & Household Prods. industry using digital technology.
Aligning sales with marketing
– From the outside it seems that Guangdong Songfa Ceramics needs to have more collaboration between its sales team and marketing team. Sales professionals in the Personal & Household Prods. industry have deep experience in developing customer relationships. Marketing department at Guangdong Songfa Ceramics can leverage the sales team experience to cultivate customer relationships as Guangdong Songfa Ceramics is planning to shift buying processes online.
Employees’ less understanding of Guangdong Songfa Ceramics strategy
– From the outside it seems that the employees of Guangdong Songfa Ceramics 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 Guangdong Songfa Ceramics products
– To increase the profitability and margins on the products, Guangdong Songfa Ceramics needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Guangdong Songfa Ceramics 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.
High operating costs
– Compare to the competitors, Guangdong Songfa Ceramics has high operating costs in the Personal & Household Prods. industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Guangdong Songfa Ceramics lucrative customers.
High dependence on Guangdong Songfa Ceramics ‘s star products
– The top 2 products and services of Guangdong Songfa Ceramics still accounts for major business revenue. This dependence on star products in Personal & Household Prods. industry has resulted into insufficient focus on developing new products, even though Guangdong Songfa Ceramics has relatively successful track record of launching new products.
Guangdong Songfa Ceramics Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Guangdong Songfa Ceramics are -
Learning at scale
– Online learning technologies has now opened space for Guangdong Songfa Ceramics to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Use of Bitcoin and other crypto currencies for transactions in Personal & Household Prods. industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Guangdong Songfa Ceramics in the Personal & Household Prods. industry. Now Guangdong Songfa Ceramics can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Guangdong Songfa Ceramics can develop new processes and procedures in Personal & Household Prods. 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.
Leveraging digital technologies
– Guangdong Songfa Ceramics 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.
Manufacturing automation
– Guangdong Songfa Ceramics can use the latest technology developments to improve its manufacturing and designing process in Personal & Household Prods. 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.
Loyalty marketing
– Guangdong Songfa Ceramics 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Guangdong Songfa Ceramics is facing challenges because of the dominance of functional experts in the organization. Guangdong Songfa Ceramics can utilize new technology in the field of Personal & Household Prods. industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Guangdong Songfa Ceramics 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Guangdong Songfa Ceramics 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 Guangdong Songfa Ceramics to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Personal & Household Prods. industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Guangdong Songfa Ceramics 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. Guangdong Songfa Ceramics 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.
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 Guangdong Songfa Ceramics 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.
Building a culture of innovation
– managers at Guangdong Songfa Ceramics 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 Personal & Household Prods. industry.
Creating value in data economy
– The success of analytics program of Guangdong Songfa Ceramics has opened avenues for new revenue streams for the organization in Personal & Household Prods. industry. This can help Guangdong Songfa Ceramics to build a more holistic ecosystem for Guangdong Songfa Ceramics products in the Personal & Household Prods. industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats Guangdong Songfa Ceramics External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Guangdong Songfa Ceramics 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. Guangdong Songfa Ceramics 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.
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 Guangdong Songfa Ceramics in the Personal & Household Prods. sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Guangdong Songfa Ceramics high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Guangdong Songfa Ceramics may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Personal & Household Prods. sector.
Easy access to finance
– Easy access to finance in Personal & Household Prods. industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Guangdong Songfa Ceramics can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Guangdong Songfa Ceramics 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 Guangdong Songfa Ceramics prominent markets.
Increasing wage structure of Guangdong Songfa Ceramics
– 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 Guangdong Songfa Ceramics.
Shortening product life cycle
– it is one of the major threat that Guangdong Songfa Ceramics is facing in Personal & Household Prods. sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Guangdong Songfa Ceramics needs to understand the core reasons impacting the Personal & Household Prods. industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Guangdong Songfa Ceramics 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 Personal & Household Prods. industry.
Regulatory challenges
– Guangdong Songfa Ceramics 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 Personal & Household Prods. industry regulations.
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 Guangdong Songfa Ceramics business can come under increasing regulations regarding data privacy, data security, 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.
Weighted SWOT Analysis of Guangdong Songfa Ceramics Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Guangdong Songfa Ceramics 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 Guangdong Songfa Ceramics 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 Guangdong Songfa Ceramics 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 Guangdong Songfa Ceramics 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 Guangdong Songfa Ceramics needs to make to build a sustainable competitive advantage.