Based on various researches at Oak Spring University , Baoding Lucky Innovative Materials is operating in a macro-environment that has been destablized by – wage bills are increasing, there is increasing trade war between United States & China, increasing household debt because of falling income levels, increasing commodity prices, challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google,
there is backlash against globalization, technology disruption, etc
Introduction to SWOT Analysis of Baoding Lucky Innovative Materials
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Baoding Lucky Innovative Materials can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Baoding Lucky Innovative Materials, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Baoding Lucky Innovative Materials 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 Baoding Lucky Innovative Materials can be done for the following purposes –
1. Strategic planning of Baoding Lucky Innovative Materials
2. Improving business portfolio management of Baoding Lucky Innovative Materials
3. Assessing feasibility of the new initiative in China
4. Making a Audio & Video Equipment sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Baoding Lucky Innovative Materials
Strengths of Baoding Lucky Innovative Materials | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Baoding Lucky Innovative Materials are -
Successful track record of launching new products
– Baoding Lucky Innovative Materials has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Baoding Lucky Innovative Materials 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.
Learning organization
- Baoding Lucky Innovative Materials 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 Baoding Lucky Innovative Materials is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Baoding Lucky Innovative Materials emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Baoding Lucky Innovative Materials in the Consumer Cyclical sector have low bargaining power. Baoding Lucky Innovative Materials has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Baoding Lucky Innovative Materials to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Baoding Lucky Innovative Materials
– The covid-19 pandemic has put organizational resilience at the centre of everthing Baoding Lucky Innovative Materials does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Baoding Lucky Innovative Materials has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Audio & Video Equipment industry. Secondly the value chain collaborators of Baoding Lucky Innovative Materials have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Baoding Lucky Innovative Materials has one of the best training and development program in Consumer 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.
Strong track record of project management in the Audio & Video Equipment industry
– Baoding Lucky Innovative Materials is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Baoding Lucky Innovative Materials has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Baoding Lucky Innovative Materials to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Baoding Lucky Innovative Materials 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.
Sustainable margins compare to other players in Audio & Video Equipment industry
– Baoding Lucky Innovative Materials has clearly differentiated products in the market place. This has enabled Baoding Lucky Innovative Materials to fetch slight price premium compare to the competitors in the Audio & Video Equipment industry. The sustainable margins have also helped Baoding Lucky Innovative Materials to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Baoding Lucky Innovative Materials has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Baoding Lucky Innovative Materials staying ahead in the Audio & Video Equipment industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Baoding Lucky Innovative Materials 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 Audio & Video Equipment 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.
Weaknesses of Baoding Lucky Innovative Materials | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Baoding Lucky Innovative Materials are -
Ability to respond to the competition
– As the decision making is very deliberative at Baoding Lucky Innovative Materials, in the dynamic environment of Audio & Video Equipment industry it has struggled to respond to the nimble upstart competition. Baoding Lucky Innovative Materials has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Baoding Lucky Innovative Materials has a high cash cycle compare to other players in the Audio & Video Equipment industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High dependence on Baoding Lucky Innovative Materials ‘s star products
– The top 2 products and services of Baoding Lucky Innovative Materials still accounts for major business revenue. This dependence on star products in Audio & Video Equipment industry has resulted into insufficient focus on developing new products, even though Baoding Lucky Innovative Materials has relatively successful track record of launching new products.
Aligning sales with marketing
– From the outside it seems that Baoding Lucky Innovative Materials needs to have more collaboration between its sales team and marketing team. Sales professionals in the Audio & Video Equipment industry have deep experience in developing customer relationships. Marketing department at Baoding Lucky Innovative Materials can leverage the sales team experience to cultivate customer relationships as Baoding Lucky Innovative Materials is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee of Baoding Lucky Innovative Materials is just above the Audio & Video Equipment 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.
Lack of clear differentiation of Baoding Lucky Innovative Materials products
– To increase the profitability and margins on the products, Baoding Lucky Innovative Materials needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Baoding Lucky Innovative Materials 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 Audio & Video Equipment industry using digital technology.
Increasing silos among functional specialists
– The organizational structure of Baoding Lucky Innovative Materials is dominated by functional specialists. It is not different from other players in the Audio & Video Equipment industry, but Baoding Lucky Innovative Materials needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Baoding Lucky Innovative Materials to focus more on services in the Audio & Video Equipment industry rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Baoding Lucky Innovative Materials 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 operating costs
– Compare to the competitors, Baoding Lucky Innovative Materials has high operating costs in the Audio & Video Equipment industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Baoding Lucky Innovative Materials lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the Audio & Video Equipment industry, Baoding Lucky Innovative Materials 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.
Baoding Lucky Innovative Materials Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Baoding Lucky Innovative Materials are -
Manufacturing automation
– Baoding Lucky Innovative Materials can use the latest technology developments to improve its manufacturing and designing process in Audio & Video Equipment 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
– Baoding Lucky Innovative Materials 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
– Baoding Lucky Innovative Materials has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Audio & Video Equipment sector. This continuous investment in analytics has enabled Baoding Lucky Innovative Materials to build a competitive advantage using analytics. The analytics driven competitive advantage can help Baoding Lucky Innovative Materials to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Baoding Lucky Innovative Materials has opened avenues for new revenue streams for the organization in Audio & Video Equipment industry. This can help Baoding Lucky Innovative Materials to build a more holistic ecosystem for Baoding Lucky Innovative Materials products in the Audio & Video Equipment industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Baoding Lucky Innovative Materials 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 Audio & Video Equipment industry.
Low interest rates
– Even though inflation is raising its head in most developed economies, Baoding Lucky Innovative Materials 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Baoding Lucky Innovative Materials in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Audio & Video Equipment industry, and it will provide faster access to the consumers.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Audio & Video Equipment industry, but it has also influenced the consumer preferences. Baoding Lucky Innovative Materials can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Baoding Lucky Innovative Materials 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 Baoding Lucky Innovative Materials to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Baoding Lucky Innovative Materials can develop new processes and procedures in Audio & Video Equipment 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Baoding Lucky Innovative Materials 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 Baoding Lucky Innovative Materials to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Audio & Video Equipment industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Baoding Lucky Innovative Materials 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. Baoding Lucky Innovative Materials 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.
Learning at scale
– Online learning technologies has now opened space for Baoding Lucky Innovative Materials 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 Baoding Lucky Innovative Materials External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Baoding Lucky Innovative Materials are -
Technology acceleration in Forth Industrial Revolution
– Baoding Lucky Innovative Materials has witnessed rapid integration of technology during Covid-19 in the Audio & Video Equipment industry. As one of the leading players in the industry, Baoding Lucky Innovative Materials needs to keep up with the evolution of technology in the Audio & Video Equipment 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.
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.
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 Baoding Lucky Innovative Materials business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Baoding Lucky Innovative Materials 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 Baoding Lucky Innovative Materials prominent markets.
Regulatory challenges
– Baoding Lucky Innovative Materials 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 Audio & Video Equipment industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Audio & Video Equipment industry are lowering. It can presents Baoding Lucky Innovative Materials with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Audio & Video Equipment sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Baoding Lucky Innovative Materials may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Audio & Video Equipment sector.
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.
Consumer confidence and its impact on Baoding Lucky Innovative Materials 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 Audio & Video Equipment industry and other sectors.
Stagnating economy with rate increase
– Baoding Lucky Innovative Materials 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 Audio & Video Equipment 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 Baoding Lucky Innovative Materials in the Audio & Video Equipment sector and impact the bottomline of the organization.
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. Baoding Lucky Innovative Materials 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.
Shortening product life cycle
– it is one of the major threat that Baoding Lucky Innovative Materials is facing in Audio & Video Equipment sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Baoding Lucky Innovative Materials Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Baoding Lucky Innovative Materials 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 Baoding Lucky Innovative Materials 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 Baoding Lucky Innovative Materials 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 Baoding Lucky Innovative Materials 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 Baoding Lucky Innovative Materials needs to make to build a sustainable competitive advantage.