Xiamen Yanjan New Material (300658) SWOT Analysis / TOWS Matrix / MBA Resources
Textiles - Non Apparel
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Xiamen Yanjan New Material (China)
Based on various researches at Oak Spring University , Xiamen Yanjan New Material is operating in a macro-environment that has been destablized by – supply chains are disrupted by pandemic , there is backlash against globalization, increasing government debt because of Covid-19 spendings, technology disruption, increasing commodity prices, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google,
central banks are concerned over increasing inflation, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Xiamen Yanjan New Material
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Xiamen Yanjan New Material can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Xiamen Yanjan New Material, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Xiamen Yanjan New Material 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 Xiamen Yanjan New Material can be done for the following purposes –
1. Strategic planning of Xiamen Yanjan New Material
2. Improving business portfolio management of Xiamen Yanjan New Material
3. Assessing feasibility of the new initiative in China
4. Making a Textiles - Non Apparel sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Xiamen Yanjan New Material
Strengths of Xiamen Yanjan New Material | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Xiamen Yanjan New Material are -
Sustainable margins compare to other players in Textiles - Non Apparel industry
– Xiamen Yanjan New Material has clearly differentiated products in the market place. This has enabled Xiamen Yanjan New Material to fetch slight price premium compare to the competitors in the Textiles - Non Apparel industry. The sustainable margins have also helped Xiamen Yanjan New Material to invest into research and development (R&D) and innovation.
Training and development
– Xiamen Yanjan New Material 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.
Digital Transformation in Textiles - Non Apparel industry
- digital transformation varies from industry to industry. For Xiamen Yanjan New Material digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Xiamen Yanjan New Material has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
High switching costs
– The high switching costs that Xiamen Yanjan New Material 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.
Organizational Resilience of Xiamen Yanjan New Material
– The covid-19 pandemic has put organizational resilience at the centre of everthing Xiamen Yanjan New Material does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Textiles - Non Apparel
– Xiamen Yanjan New Material is one of the leading players in the Textiles - Non Apparel industry in China. Over the years it has not only transformed the business landscape in the Textiles - Non Apparel industry in China but also across the existing markets. The ability to lead change has enabled Xiamen Yanjan New Material in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Xiamen Yanjan New Material 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.
Operational resilience
– The operational resilience strategy of Xiamen Yanjan New Material comprises – understanding the underlying the factors in the Textiles - Non Apparel 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.
Innovation driven organization
– Xiamen Yanjan New Material is one of the most innovative firm in Textiles - Non Apparel sector.
Strong track record of project management in the Textiles - Non Apparel industry
– Xiamen Yanjan New Material is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Xiamen Yanjan New Material has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Xiamen Yanjan New Material 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.
Superior customer experience
– The customer experience strategy of Xiamen Yanjan New Material in Textiles - Non Apparel industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses of Xiamen Yanjan New Material | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Xiamen Yanjan New Material are -
High cash cycle compare to competitors
Xiamen Yanjan New Material has a high cash cycle compare to other players in the Textiles - Non Apparel 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 Xiamen Yanjan New Material ‘s star products
– The top 2 products and services of Xiamen Yanjan New Material still accounts for major business revenue. This dependence on star products in Textiles - Non Apparel industry has resulted into insufficient focus on developing new products, even though Xiamen Yanjan New Material has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Xiamen Yanjan New Material is dominated by functional specialists. It is not different from other players in the Textiles - Non Apparel industry, but Xiamen Yanjan New Material needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Xiamen Yanjan New Material to focus more on services in the Textiles - Non Apparel industry rather than just following the product oriented approach.
No frontier risks strategy
– From the 10K / annual statement of Xiamen Yanjan New Material, it seems that company is thinking out the frontier risks that can impact Textiles - Non Apparel 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.
Slow to strategic competitive environment developments
– As Xiamen Yanjan New Material is one of the leading players in the Textiles - Non Apparel industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Textiles - Non Apparel industry in last five years.
Employees’ less understanding of Xiamen Yanjan New Material strategy
– From the outside it seems that the employees of Xiamen Yanjan New Material 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.
Low market penetration in new markets
– Outside its home market of China, Xiamen Yanjan New Material needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Xiamen Yanjan New Material has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Textiles - Non Apparel industry over the last five years. Xiamen Yanjan New Material 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 operating costs
– Compare to the competitors, Xiamen Yanjan New Material has high operating costs in the Textiles - Non Apparel industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Xiamen Yanjan New Material lucrative customers.
Skills based hiring in Textiles - Non Apparel industry
– The stress on hiring functional specialists at Xiamen Yanjan New Material 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.
Lack of clear differentiation of Xiamen Yanjan New Material products
– To increase the profitability and margins on the products, Xiamen Yanjan New Material needs to provide more differentiated products than what it is currently offering in the marketplace.
Xiamen Yanjan New Material Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Xiamen Yanjan New Material are -
Developing new processes and practices
– Xiamen Yanjan New Material can develop new processes and procedures in Textiles - Non Apparel 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.
Buying journey improvements
– Xiamen Yanjan New Material can improve the customer journey of consumers in the Textiles - Non Apparel 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.
Building a culture of innovation
– managers at Xiamen Yanjan New Material 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 Textiles - Non Apparel industry.
Low interest rates
– Even though inflation is raising its head in most developed economies, Xiamen Yanjan New Material 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.
Manufacturing automation
– Xiamen Yanjan New Material can use the latest technology developments to improve its manufacturing and designing process in Textiles - Non Apparel 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Xiamen Yanjan New Material can use these opportunities to build new business models that can help the communities that Xiamen Yanjan New Material operates in. Secondly it can use opportunities from government spending in Textiles - Non Apparel sector.
Loyalty marketing
– Xiamen Yanjan New Material 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.
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. Xiamen Yanjan New Material can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Xiamen Yanjan New Material 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.
Use of Bitcoin and other crypto currencies for transactions in Textiles - Non Apparel industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Xiamen Yanjan New Material in the Textiles - Non Apparel industry. Now Xiamen Yanjan New Material can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Xiamen Yanjan New Material has opened avenues for new revenue streams for the organization in Textiles - Non Apparel industry. This can help Xiamen Yanjan New Material to build a more holistic ecosystem for Xiamen Yanjan New Material products in the Textiles - Non Apparel industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Xiamen Yanjan New Material in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Textiles - Non Apparel industry, and it will provide faster access to the consumers.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Xiamen Yanjan New Material can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Xiamen Yanjan New Material External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Xiamen Yanjan New Material 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 Xiamen Yanjan New Material business can come under increasing regulations regarding data privacy, data security, etc.
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. Xiamen Yanjan New Material needs to understand the core reasons impacting the Textiles - Non Apparel industry. This will help it in building a better workplace.
Consumer confidence and its impact on Xiamen Yanjan New Material 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 Textiles - Non Apparel industry and other sectors.
Technology acceleration in Forth Industrial Revolution
– Xiamen Yanjan New Material has witnessed rapid integration of technology during Covid-19 in the Textiles - Non Apparel industry. As one of the leading players in the industry, Xiamen Yanjan New Material needs to keep up with the evolution of technology in the Textiles - Non Apparel 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 Xiamen Yanjan New Material in the Textiles - Non Apparel sector and impact the bottomline of the organization.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Xiamen Yanjan New Material 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 Xiamen Yanjan New Material prominent markets.
High dependence on third party suppliers
– Xiamen Yanjan New Material 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.
Stagnating economy with rate increase
– Xiamen Yanjan New Material 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 Textiles - Non Apparel industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Textiles - Non Apparel industry are lowering. It can presents Xiamen Yanjan New Material with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Textiles - Non Apparel sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Xiamen Yanjan New Material in Textiles - Non Apparel industry. The Textiles - Non Apparel 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.
Easy access to finance
– Easy access to finance in Textiles - Non Apparel industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Xiamen Yanjan New Material can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Xiamen Yanjan New Material 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. Xiamen Yanjan New Material can take advantage of this fund but it will also bring new competitors in the Textiles - Non Apparel industry.
Weighted SWOT Analysis of Xiamen Yanjan New Material Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Xiamen Yanjan New Material 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 Xiamen Yanjan New Material 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 Xiamen Yanjan New Material 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 Xiamen Yanjan New Material 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 Xiamen Yanjan New Material needs to make to build a sustainable competitive advantage.
