Shenyu Communication (300563) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Shenyu Communication (China)

Based on various researches at Oak Spring University , Shenyu Communication is operating in a macro-environment that has been destablized by – increasing energy prices, increasing transportation and logistics costs, there is backlash against globalization, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, geopolitical disruptions, increasing commodity prices, etc

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Introduction to SWOT Analysis of Shenyu Communication

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Shenyu Communication can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shenyu Communication, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shenyu Communication 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Shenyu Communication can be done for the following purposes –
1. Strategic planning of Shenyu Communication
2. Improving business portfolio management of Shenyu Communication
3. Assessing feasibility of the new initiative in China
4. Making a Misc. Fabricated Products sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Shenyu Communication

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Strengths of Shenyu Communication | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Shenyu Communication are -

Ability to lead change in Misc. Fabricated Products

– Shenyu Communication is one of the leading players in the Misc. Fabricated Products industry in China. Over the years it has not only transformed the business landscape in the Misc. Fabricated Products industry in China but also across the existing markets. The ability to lead change has enabled Shenyu Communication in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Strong track record of project management in the Misc. Fabricated Products industry

– Shenyu Communication 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 Misc. Fabricated Products industry

- digital transformation varies from industry to industry. For Shenyu Communication digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shenyu Communication 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.

Training and development

– Shenyu Communication 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.

High brand equity

– Shenyu Communication has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Shenyu Communication to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Ability to recruit top talent

– Shenyu Communication is one of the leading players in the Misc. Fabricated Products 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.

Highly skilled collaborators

– Shenyu Communication has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Misc. Fabricated Products industry. Secondly the value chain collaborators of Shenyu Communication have helped the firm to develop new products and bring them quickly to the marketplace.

Effective Research and Development (R&D)

– Shenyu Communication has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Shenyu Communication staying ahead in the Misc. Fabricated Products industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Sustainable margins compare to other players in Misc. Fabricated Products industry

– Shenyu Communication has clearly differentiated products in the market place. This has enabled Shenyu Communication to fetch slight price premium compare to the competitors in the Misc. Fabricated Products industry. The sustainable margins have also helped Shenyu Communication to invest into research and development (R&D) and innovation.

Low bargaining power of suppliers

– Suppliers of Shenyu Communication in the Basic Materials sector have low bargaining power. Shenyu Communication has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shenyu Communication to manage not only supply disruptions but also source products at highly competitive prices.

Diverse revenue streams

– Shenyu Communication is present in almost all the verticals within the Misc. Fabricated Products industry. This has provided Shenyu Communication a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.

Successful track record of launching new products

– Shenyu Communication has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Shenyu Communication 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.

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Weaknesses of Shenyu Communication | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Shenyu Communication are -

High operating costs

– Compare to the competitors, Shenyu Communication has high operating costs in the Misc. Fabricated Products industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Shenyu Communication lucrative customers.

No frontier risks strategy

– From the 10K / annual statement of Shenyu Communication, it seems that company is thinking out the frontier risks that can impact Misc. Fabricated Products industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.

Ability to respond to the competition

– As the decision making is very deliberative at Shenyu Communication, in the dynamic environment of Misc. Fabricated Products industry it has struggled to respond to the nimble upstart competition. Shenyu Communication has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

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 Shenyu Communication supply chain. Even after few cautionary changes, Shenyu Communication is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Shenyu Communication vulnerable to further global disruptions in South East Asia.

Aligning sales with marketing

– From the outside it seems that Shenyu Communication needs to have more collaboration between its sales team and marketing team. Sales professionals in the Misc. Fabricated Products industry have deep experience in developing customer relationships. Marketing department at Shenyu Communication can leverage the sales team experience to cultivate customer relationships as Shenyu Communication is planning to shift buying processes online.

Slow decision making process

– As mentioned earlier in the report, Shenyu Communication has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Misc. Fabricated Products industry over the last five years. Shenyu Communication 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.

Slow to strategic competitive environment developments

– As Shenyu Communication is one of the leading players in the Misc. Fabricated Products industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Misc. Fabricated Products industry in last five years.

Products dominated business model

– Even though Shenyu Communication has some of the most successful models in the Misc. Fabricated Products industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Shenyu Communication should strive to include more intangible value offerings along with its core products and services.

Lack of clear differentiation of Shenyu Communication products

– To increase the profitability and margins on the products, Shenyu Communication needs to provide more differentiated products than what it is currently offering in the marketplace.

Capital Spending Reduction

– Even during the low interest decade, Shenyu Communication 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 Misc. Fabricated Products industry using digital technology.

High dependence on Shenyu Communication ‘s star products

– The top 2 products and services of Shenyu Communication still accounts for major business revenue. This dependence on star products in Misc. Fabricated Products industry has resulted into insufficient focus on developing new products, even though Shenyu Communication has relatively successful track record of launching new products.

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Shenyu Communication Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Shenyu Communication are -

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Misc. Fabricated Products industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Shenyu Communication 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. Shenyu Communication 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.

Identify volunteer opportunities

– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Shenyu Communication can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Low interest rates

– Even though inflation is raising its head in most developed economies, Shenyu Communication 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.

Creating value in data economy

– The success of analytics program of Shenyu Communication has opened avenues for new revenue streams for the organization in Misc. Fabricated Products industry. This can help Shenyu Communication to build a more holistic ecosystem for Shenyu Communication products in the Misc. Fabricated Products industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Shenyu Communication 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 Shenyu Communication to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Using analytics as competitive advantage

– Shenyu Communication has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Misc. Fabricated Products sector. This continuous investment in analytics has enabled Shenyu Communication to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shenyu Communication to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Buying journey improvements

– Shenyu Communication can improve the customer journey of consumers in the Misc. Fabricated Products industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Misc. Fabricated Products industry, but it has also influenced the consumer preferences. Shenyu Communication can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

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 Shenyu Communication 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Shenyu Communication can use these opportunities to build new business models that can help the communities that Shenyu Communication operates in. Secondly it can use opportunities from government spending in Misc. Fabricated Products sector.

Use of Bitcoin and other crypto currencies for transactions in Misc. Fabricated Products industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Shenyu Communication in the Misc. Fabricated Products industry. Now Shenyu Communication can target international markets with far fewer capital restrictions requirements than the existing system.

Developing new processes and practices

– Shenyu Communication can develop new processes and procedures in Misc. Fabricated Products 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

– Shenyu Communication 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.

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Threats Shenyu Communication External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Shenyu Communication are -

Technology acceleration in Forth Industrial Revolution

– Shenyu Communication has witnessed rapid integration of technology during Covid-19 in the Misc. Fabricated Products industry. As one of the leading players in the industry, Shenyu Communication needs to keep up with the evolution of technology in the Misc. Fabricated Products 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.

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 Shenyu Communication in the Misc. Fabricated Products sector and impact the bottomline of the organization.

Easy access to finance

– Easy access to finance in Misc. Fabricated Products industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Shenyu Communication can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Stagnating economy with rate increase

– Shenyu Communication 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 Misc. Fabricated Products industry.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Shenyu Communication may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Misc. Fabricated Products sector.

Environmental challenges

– Shenyu Communication 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. Shenyu Communication can take advantage of this fund but it will also bring new competitors in the Misc. Fabricated Products industry.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Shenyu Communication 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 Shenyu Communication prominent markets.

High dependence on third party suppliers

– Shenyu Communication 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.

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 Shenyu Communication business can come under increasing regulations regarding data privacy, data security, etc.

Consumer confidence and its impact on Shenyu Communication 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 Misc. Fabricated Products industry and other sectors.

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 Shenyu Communication.

Regulatory challenges

– Shenyu Communication 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 Misc. Fabricated Products industry regulations.

Increasing wage structure of Shenyu Communication

– 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 Shenyu Communication.

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Weighted SWOT Analysis of Shenyu Communication Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Shenyu Communication 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 Shenyu Communication 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 Shenyu Communication 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 Shenyu Communication 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 Shenyu Communication needs to make to build a sustainable competitive advantage.

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