SWOT Analysis / TOWS Matrix for YanTai Yuancheng Gold (China)
Based on various researches at Oak Spring University , YanTai Yuancheng Gold is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion,
there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of YanTai Yuancheng Gold
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that YanTai Yuancheng Gold can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the YanTai Yuancheng Gold, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which YanTai Yuancheng Gold 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 YanTai Yuancheng Gold can be done for the following purposes –
1. Strategic planning of YanTai Yuancheng Gold
2. Improving business portfolio management of YanTai Yuancheng Gold
3. Assessing feasibility of the new initiative in China
4. Making a Gold & Silver sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of YanTai Yuancheng Gold
Strengths of YanTai Yuancheng Gold | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of YanTai Yuancheng Gold are -
Successful track record of launching new products
– YanTai Yuancheng Gold has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. YanTai Yuancheng Gold 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 recruit top talent
– YanTai Yuancheng Gold is one of the leading players in the Gold & Silver 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.
Digital Transformation in Gold & Silver industry
- digital transformation varies from industry to industry. For YanTai Yuancheng Gold digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. YanTai Yuancheng Gold 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
– YanTai Yuancheng Gold has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled YanTai Yuancheng Gold to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of YanTai Yuancheng Gold
– The covid-19 pandemic has put organizational resilience at the centre of everthing YanTai Yuancheng Gold does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– YanTai Yuancheng Gold has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – YanTai Yuancheng Gold staying ahead in the Gold & Silver industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– YanTai Yuancheng Gold has one of the best training and development program in Basic Materials industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Innovation driven organization
– YanTai Yuancheng Gold is one of the most innovative firm in Gold & Silver sector.
Operational resilience
– The operational resilience strategy of YanTai Yuancheng Gold comprises – understanding the underlying the factors in the Gold & Silver 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.
Strong track record of project management in the Gold & Silver industry
– YanTai Yuancheng Gold is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– YanTai Yuancheng Gold has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Gold & Silver industry. Secondly the value chain collaborators of YanTai Yuancheng Gold have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of YanTai Yuancheng Gold in the Basic Materials sector have low bargaining power. YanTai Yuancheng Gold has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps YanTai Yuancheng Gold to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses of YanTai Yuancheng Gold | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of YanTai Yuancheng Gold are -
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of YanTai Yuancheng Gold supply chain. Even after few cautionary changes, YanTai Yuancheng Gold is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left YanTai Yuancheng Gold vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, YanTai Yuancheng Gold 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.
Slow to strategic competitive environment developments
– As YanTai Yuancheng Gold is one of the leading players in the Gold & Silver industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Gold & Silver industry in last five years.
Need for greater diversity
– YanTai Yuancheng Gold 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, YanTai Yuancheng Gold has high operating costs in the Gold & Silver industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract YanTai Yuancheng Gold lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, YanTai Yuancheng Gold is slow explore the new channels of communication. These new channels of communication can help YanTai Yuancheng Gold to provide better information regarding Gold & Silver products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, YanTai Yuancheng Gold 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 Gold & Silver industry using digital technology.
High cash cycle compare to competitors
YanTai Yuancheng Gold has a high cash cycle compare to other players in the Gold & Silver industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Low market penetration in new markets
– Outside its home market of China, YanTai Yuancheng Gold needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of YanTai Yuancheng Gold products
– To increase the profitability and margins on the products, YanTai Yuancheng Gold needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on YanTai Yuancheng Gold ‘s star products
– The top 2 products and services of YanTai Yuancheng Gold still accounts for major business revenue. This dependence on star products in Gold & Silver industry has resulted into insufficient focus on developing new products, even though YanTai Yuancheng Gold has relatively successful track record of launching new products.
YanTai Yuancheng Gold Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of YanTai Yuancheng Gold are -
Using analytics as competitive advantage
– YanTai Yuancheng Gold has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Gold & Silver sector. This continuous investment in analytics has enabled YanTai Yuancheng Gold to build a competitive advantage using analytics. The analytics driven competitive advantage can help YanTai Yuancheng Gold to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help YanTai Yuancheng Gold to increase its market reach. YanTai Yuancheng Gold 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.
Building a culture of innovation
– managers at YanTai Yuancheng Gold 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 Gold & Silver industry.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for YanTai Yuancheng Gold 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 YanTai Yuancheng Gold to hire the very best people irrespective of their geographical location.
Use of Bitcoin and other crypto currencies for transactions in Gold & Silver industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for YanTai Yuancheng Gold in the Gold & Silver industry. Now YanTai Yuancheng Gold can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for YanTai Yuancheng Gold in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Gold & Silver industry, and it will provide faster access to the consumers.
Leveraging digital technologies
– YanTai Yuancheng Gold 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.
Loyalty marketing
– YanTai Yuancheng Gold 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.
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 YanTai Yuancheng Gold 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.
Creating value in data economy
– The success of analytics program of YanTai Yuancheng Gold has opened avenues for new revenue streams for the organization in Gold & Silver industry. This can help YanTai Yuancheng Gold to build a more holistic ecosystem for YanTai Yuancheng Gold products in the Gold & Silver industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Gold & Silver industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. YanTai Yuancheng Gold 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. YanTai Yuancheng Gold 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.
Developing new processes and practices
– YanTai Yuancheng Gold can develop new processes and procedures in Gold & Silver 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.
Learning at scale
– Online learning technologies has now opened space for YanTai Yuancheng Gold 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.
Threats YanTai Yuancheng Gold External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of YanTai Yuancheng Gold are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, YanTai Yuancheng Gold 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 YanTai Yuancheng Gold prominent markets.
Increasing wage structure of YanTai Yuancheng Gold
– 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 YanTai Yuancheng Gold.
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.
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 YanTai Yuancheng Gold business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– YanTai Yuancheng Gold 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 Gold & Silver industry regulations.
Shortening product life cycle
– it is one of the major threat that YanTai Yuancheng Gold is facing in Gold & Silver sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– YanTai Yuancheng Gold 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. YanTai Yuancheng Gold can take advantage of this fund but it will also bring new competitors in the Gold & Silver industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, YanTai Yuancheng Gold may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Gold & Silver 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. YanTai Yuancheng Gold 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 YanTai Yuancheng Gold.
High dependence on third party suppliers
– YanTai Yuancheng Gold 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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Gold & Silver industry are lowering. It can presents YanTai Yuancheng Gold with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Gold & Silver sector.
Weighted SWOT Analysis of YanTai Yuancheng Gold Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at YanTai Yuancheng Gold 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 YanTai Yuancheng Gold 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 YanTai Yuancheng Gold 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 YanTai Yuancheng Gold 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 YanTai Yuancheng Gold needs to make to build a sustainable competitive advantage.
