SWOT Analysis / TOWS Matrix for Zhengzhou GL Tech (China)
Based on various researches at Oak Spring University , Zhengzhou GL Tech is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, increasing transportation and logistics costs, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models,
there is backlash against globalization, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Zhengzhou GL Tech
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Zhengzhou GL Tech can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Zhengzhou GL Tech, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Zhengzhou GL Tech 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 Zhengzhou GL Tech can be done for the following purposes –
1. Strategic planning of Zhengzhou GL Tech
2. Improving business portfolio management of Zhengzhou GL Tech
3. Assessing feasibility of the new initiative in China
4. Making a Scientific & Technical Instr. sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Zhengzhou GL Tech
Strengths of Zhengzhou GL Tech | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Zhengzhou GL Tech are -
Strong track record of project management in the Scientific & Technical Instr. industry
– Zhengzhou GL Tech is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Zhengzhou GL Tech 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.
Ability to recruit top talent
– Zhengzhou GL Tech is one of the leading players in the Scientific & Technical Instr. 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.
Learning organization
- Zhengzhou GL Tech 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 Zhengzhou GL Tech is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Zhengzhou GL Tech emphasize – knowledge, initiative, and innovation.
Training and development
– Zhengzhou GL Tech has one of the best training and development program in Technology 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.
High switching costs
– The high switching costs that Zhengzhou GL Tech 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.
Analytics focus
– Zhengzhou GL Tech 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 Scientific & Technical Instr. 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.
Sustainable margins compare to other players in Scientific & Technical Instr. industry
– Zhengzhou GL Tech has clearly differentiated products in the market place. This has enabled Zhengzhou GL Tech to fetch slight price premium compare to the competitors in the Scientific & Technical Instr. industry. The sustainable margins have also helped Zhengzhou GL Tech to invest into research and development (R&D) and innovation.
Innovation driven organization
– Zhengzhou GL Tech is one of the most innovative firm in Scientific & Technical Instr. sector.
Organizational Resilience of Zhengzhou GL Tech
– The covid-19 pandemic has put organizational resilience at the centre of everthing Zhengzhou GL Tech does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy of Zhengzhou GL Tech comprises – understanding the underlying the factors in the Scientific & Technical Instr. 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.
Superior customer experience
– The customer experience strategy of Zhengzhou GL Tech in Scientific & Technical Instr. industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses of Zhengzhou GL Tech | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Zhengzhou GL Tech are -
Ability to respond to the competition
– As the decision making is very deliberative at Zhengzhou GL Tech, in the dynamic environment of Scientific & Technical Instr. industry it has struggled to respond to the nimble upstart competition. Zhengzhou GL Tech has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring in Scientific & Technical Instr. industry
– The stress on hiring functional specialists at Zhengzhou GL Tech 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.
Products dominated business model
– Even though Zhengzhou GL Tech has some of the most successful models in the Scientific & Technical Instr. industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Zhengzhou GL Tech should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– From the outside it seems that Zhengzhou GL Tech needs to have more collaboration between its sales team and marketing team. Sales professionals in the Scientific & Technical Instr. industry have deep experience in developing customer relationships. Marketing department at Zhengzhou GL Tech can leverage the sales team experience to cultivate customer relationships as Zhengzhou GL Tech is planning to shift buying processes online.
High bargaining power of channel partners in Scientific & Technical Instr. industry
– because of the regulatory requirements in China, Zhengzhou GL Tech 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 Scientific & Technical Instr. industry.
Compensation and incentives
– The revenue per employee of Zhengzhou GL Tech is just above the Scientific & Technical Instr. industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High dependence on Zhengzhou GL Tech ‘s star products
– The top 2 products and services of Zhengzhou GL Tech still accounts for major business revenue. This dependence on star products in Scientific & Technical Instr. industry has resulted into insufficient focus on developing new products, even though Zhengzhou GL Tech has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Zhengzhou GL Tech has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Scientific & Technical Instr. industry over the last five years. Zhengzhou GL Tech even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
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 Zhengzhou GL Tech supply chain. Even after few cautionary changes, Zhengzhou GL Tech is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Zhengzhou GL Tech vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Zhengzhou GL Tech 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.
Low market penetration in new markets
– Outside its home market of China, Zhengzhou GL Tech needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Zhengzhou GL Tech Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Zhengzhou GL Tech are -
Loyalty marketing
– Zhengzhou GL Tech 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.
Using analytics as competitive advantage
– Zhengzhou GL Tech has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Scientific & Technical Instr. sector. This continuous investment in analytics has enabled Zhengzhou GL Tech to build a competitive advantage using analytics. The analytics driven competitive advantage can help Zhengzhou GL Tech 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 Zhengzhou GL Tech 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 Zhengzhou GL Tech to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Zhengzhou GL Tech can use the latest technology developments to improve its manufacturing and designing process in Scientific & Technical Instr. 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.
Better consumer reach
– The expansion of the 5G network will help Zhengzhou GL Tech to increase its market reach. Zhengzhou GL Tech 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Scientific & Technical Instr. industry, but it has also influenced the consumer preferences. Zhengzhou GL Tech can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Use of Bitcoin and other crypto currencies for transactions in Scientific & Technical Instr. industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Zhengzhou GL Tech in the Scientific & Technical Instr. industry. Now Zhengzhou GL Tech can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Zhengzhou GL Tech can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Zhengzhou GL Tech 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Zhengzhou GL Tech can use these opportunities to build new business models that can help the communities that Zhengzhou GL Tech operates in. Secondly it can use opportunities from government spending in Scientific & Technical Instr. sector.
Leveraging digital technologies
– Zhengzhou GL Tech 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.
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 Zhengzhou GL Tech 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 Zhengzhou GL Tech has opened avenues for new revenue streams for the organization in Scientific & Technical Instr. industry. This can help Zhengzhou GL Tech to build a more holistic ecosystem for Zhengzhou GL Tech products in the Scientific & Technical Instr. industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats Zhengzhou GL Tech External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Zhengzhou GL Tech are -
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 Zhengzhou GL Tech business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Zhengzhou GL Tech 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 Scientific & Technical Instr. industry.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Shortening product life cycle
– it is one of the major threat that Zhengzhou GL Tech is facing in Scientific & Technical Instr. sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Zhengzhou GL Tech
– 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 Zhengzhou GL Tech.
Technology acceleration in Forth Industrial Revolution
– Zhengzhou GL Tech has witnessed rapid integration of technology during Covid-19 in the Scientific & Technical Instr. industry. As one of the leading players in the industry, Zhengzhou GL Tech needs to keep up with the evolution of technology in the Scientific & Technical Instr. 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.
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 Zhengzhou GL Tech.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Zhengzhou GL Tech 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 Zhengzhou GL Tech prominent markets.
Environmental challenges
– Zhengzhou GL Tech 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. Zhengzhou GL Tech can take advantage of this fund but it will also bring new competitors in the Scientific & Technical Instr. 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 Zhengzhou GL Tech in the Scientific & Technical Instr. sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Zhengzhou GL Tech 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.
Regulatory challenges
– Zhengzhou GL Tech 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 Scientific & Technical Instr. industry regulations.
Easy access to finance
– Easy access to finance in Scientific & Technical Instr. industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Zhengzhou GL Tech can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Zhengzhou GL Tech Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Zhengzhou GL Tech 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 Zhengzhou GL Tech 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 Zhengzhou GL Tech 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 Zhengzhou GL Tech 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 Zhengzhou GL Tech needs to make to build a sustainable competitive advantage.