SWOT Analysis / TOWS Matrix for Guizhou Wire Rope (China)
Based on various researches at Oak Spring University , Guizhou Wire Rope is operating in a macro-environment that has been destablized by – increasing commodity prices, supply chains are disrupted by pandemic , there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion,
central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Guizhou Wire Rope
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Guizhou Wire Rope can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Guizhou Wire Rope, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Guizhou Wire Rope 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 Guizhou Wire Rope can be done for the following purposes –
1. Strategic planning of Guizhou Wire Rope
2. Improving business portfolio management of Guizhou Wire Rope
3. Assessing feasibility of the new initiative in China
4. Making a Constr. - Supplies & Fixtures sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Guizhou Wire Rope
Strengths of Guizhou Wire Rope | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Guizhou Wire Rope are -
Sustainable margins compare to other players in Constr. - Supplies & Fixtures industry
– Guizhou Wire Rope has clearly differentiated products in the market place. This has enabled Guizhou Wire Rope to fetch slight price premium compare to the competitors in the Constr. - Supplies & Fixtures industry. The sustainable margins have also helped Guizhou Wire Rope to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Guizhou Wire Rope 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
– Guizhou Wire Rope 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 Constr. - Supplies & Fixtures 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.
Low bargaining power of suppliers
– Suppliers of Guizhou Wire Rope in the Capital Goods sector have low bargaining power. Guizhou Wire Rope has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Guizhou Wire Rope to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy of Guizhou Wire Rope comprises – understanding the underlying the factors in the Constr. - Supplies & Fixtures 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.
Cross disciplinary teams
– Horizontal connected teams at the Guizhou Wire Rope 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.
Diverse revenue streams
– Guizhou Wire Rope is present in almost all the verticals within the Constr. - Supplies & Fixtures industry. This has provided Guizhou Wire Rope 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.
Ability to recruit top talent
– Guizhou Wire Rope is one of the leading players in the Constr. - Supplies & Fixtures 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.
Superior customer experience
– The customer experience strategy of Guizhou Wire Rope in Constr. - Supplies & Fixtures industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management in the Constr. - Supplies & Fixtures industry
– Guizhou Wire Rope is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Guizhou Wire Rope 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 Guizhou Wire Rope is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Guizhou Wire Rope emphasize – knowledge, initiative, and innovation.
Digital Transformation in Constr. - Supplies & Fixtures industry
- digital transformation varies from industry to industry. For Guizhou Wire Rope digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Guizhou Wire Rope 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.
Weaknesses of Guizhou Wire Rope | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Guizhou Wire Rope are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Guizhou Wire Rope is slow explore the new channels of communication. These new channels of communication can help Guizhou Wire Rope to provide better information regarding Constr. - Supplies & Fixtures products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– From the outside it seems that Guizhou Wire Rope needs to have more collaboration between its sales team and marketing team. Sales professionals in the Constr. - Supplies & Fixtures industry have deep experience in developing customer relationships. Marketing department at Guizhou Wire Rope can leverage the sales team experience to cultivate customer relationships as Guizhou Wire Rope is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative at Guizhou Wire Rope, in the dynamic environment of Constr. - Supplies & Fixtures industry it has struggled to respond to the nimble upstart competition. Guizhou Wire Rope has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the Constr. - Supplies & Fixtures industry, Guizhou Wire Rope 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.
Increasing silos among functional specialists
– The organizational structure of Guizhou Wire Rope is dominated by functional specialists. It is not different from other players in the Constr. - Supplies & Fixtures industry, but Guizhou Wire Rope needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Guizhou Wire Rope to focus more on services in the Constr. - Supplies & Fixtures industry rather than just following the product oriented approach.
Skills based hiring in Constr. - Supplies & Fixtures industry
– The stress on hiring functional specialists at Guizhou Wire Rope 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.
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 Guizhou Wire Rope supply chain. Even after few cautionary changes, Guizhou Wire Rope is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Guizhou Wire Rope vulnerable to further global disruptions in South East Asia.
Employees’ less understanding of Guizhou Wire Rope strategy
– From the outside it seems that the employees of Guizhou Wire Rope don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High operating costs
– Compare to the competitors, Guizhou Wire Rope has high operating costs in the Constr. - Supplies & Fixtures industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Guizhou Wire Rope lucrative customers.
High dependence on Guizhou Wire Rope ‘s star products
– The top 2 products and services of Guizhou Wire Rope still accounts for major business revenue. This dependence on star products in Constr. - Supplies & Fixtures industry has resulted into insufficient focus on developing new products, even though Guizhou Wire Rope has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Guizhou Wire Rope 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 Constr. - Supplies & Fixtures industry using digital technology.
Guizhou Wire Rope Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Guizhou Wire Rope are -
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. Guizhou Wire Rope 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, Guizhou Wire Rope 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.
Better consumer reach
– The expansion of the 5G network will help Guizhou Wire Rope to increase its market reach. Guizhou Wire Rope 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 Constr. - Supplies & Fixtures industry, but it has also influenced the consumer preferences. Guizhou Wire Rope can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Guizhou Wire Rope is facing challenges because of the dominance of functional experts in the organization. Guizhou Wire Rope can utilize new technology in the field of Constr. - Supplies & Fixtures industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Creating value in data economy
– The success of analytics program of Guizhou Wire Rope has opened avenues for new revenue streams for the organization in Constr. - Supplies & Fixtures industry. This can help Guizhou Wire Rope to build a more holistic ecosystem for Guizhou Wire Rope products in the Constr. - Supplies & Fixtures industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Guizhou Wire Rope can improve the customer journey of consumers in the Constr. - Supplies & Fixtures 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Guizhou Wire Rope 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 Guizhou Wire Rope to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Guizhou Wire Rope in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Constr. - Supplies & Fixtures industry, and it will provide faster access to the consumers.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Guizhou Wire Rope 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 Guizhou Wire Rope to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Constr. - Supplies & Fixtures industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Guizhou Wire Rope 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. Guizhou Wire Rope 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Guizhou Wire Rope can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Use of Bitcoin and other crypto currencies for transactions in Constr. - Supplies & Fixtures industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Guizhou Wire Rope in the Constr. - Supplies & Fixtures industry. Now Guizhou Wire Rope can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Guizhou Wire Rope External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Guizhou Wire Rope are -
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 Guizhou Wire Rope.
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 Guizhou Wire Rope 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 Constr. - Supplies & Fixtures industry and other sectors.
Increasing wage structure of Guizhou Wire Rope
– 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 Guizhou Wire Rope.
Environmental challenges
– Guizhou Wire Rope 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. Guizhou Wire Rope can take advantage of this fund but it will also bring new competitors in the Constr. - Supplies & Fixtures industry.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Guizhou Wire Rope needs to understand the core reasons impacting the Constr. - Supplies & Fixtures industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Guizhou Wire Rope in Constr. - Supplies & Fixtures industry. The Constr. - Supplies & Fixtures industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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. Guizhou Wire Rope will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Guizhou Wire Rope in the Constr. - Supplies & Fixtures sector and impact the bottomline 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 Guizhou Wire Rope business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Guizhou Wire Rope 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 Constr. - Supplies & Fixtures industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Guizhou Wire Rope 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 Guizhou Wire Rope prominent markets.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Constr. - Supplies & Fixtures industry are lowering. It can presents Guizhou Wire Rope with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Constr. - Supplies & Fixtures sector.
Weighted SWOT Analysis of Guizhou Wire Rope Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Guizhou Wire Rope 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 Guizhou Wire Rope 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 Guizhou Wire Rope 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 Guizhou Wire Rope 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 Guizhou Wire Rope needs to make to build a sustainable competitive advantage.
