SWOT Analysis / TOWS Matrix for Mudanjiang Hengfeng (China)
Based on various researches at Oak Spring University , Mudanjiang Hengfeng is operating in a macro-environment that has been destablized by – supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, technology disruption, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, there is backlash against globalization,
increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Mudanjiang Hengfeng
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Mudanjiang Hengfeng can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mudanjiang Hengfeng, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mudanjiang Hengfeng 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 Mudanjiang Hengfeng can be done for the following purposes –
1. Strategic planning of Mudanjiang Hengfeng
2. Improving business portfolio management of Mudanjiang Hengfeng
3. Assessing feasibility of the new initiative in China
4. Making a Paper & Paper Products sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Mudanjiang Hengfeng
Strengths of Mudanjiang Hengfeng | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Mudanjiang Hengfeng are -
Strong track record of project management in the Paper & Paper Products industry
– Mudanjiang Hengfeng 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 Paper & Paper Products industry
- digital transformation varies from industry to industry. For Mudanjiang Hengfeng digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Mudanjiang Hengfeng 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.
Organizational Resilience of Mudanjiang Hengfeng
– The covid-19 pandemic has put organizational resilience at the centre of everthing Mudanjiang Hengfeng does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Mudanjiang Hengfeng is present in almost all the verticals within the Paper & Paper Products industry. This has provided Mudanjiang Hengfeng 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.
Innovation driven organization
– Mudanjiang Hengfeng is one of the most innovative firm in Paper & Paper Products sector.
Low bargaining power of suppliers
– Suppliers of Mudanjiang Hengfeng in the Basic Materials sector have low bargaining power. Mudanjiang Hengfeng has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Mudanjiang Hengfeng to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Mudanjiang Hengfeng has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Mudanjiang Hengfeng staying ahead in the Paper & Paper Products industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Paper & Paper Products
– Mudanjiang Hengfeng is one of the leading players in the Paper & Paper Products industry in China. Over the years it has not only transformed the business landscape in the Paper & Paper Products industry in China but also across the existing markets. The ability to lead change has enabled Mudanjiang Hengfeng in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Mudanjiang Hengfeng has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Paper & Paper Products industry. Secondly the value chain collaborators of Mudanjiang Hengfeng have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Paper & Paper Products industry
– Mudanjiang Hengfeng has clearly differentiated products in the market place. This has enabled Mudanjiang Hengfeng to fetch slight price premium compare to the competitors in the Paper & Paper Products industry. The sustainable margins have also helped Mudanjiang Hengfeng to invest into research and development (R&D) and innovation.
High brand equity
– Mudanjiang Hengfeng has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Mudanjiang Hengfeng to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy of Mudanjiang Hengfeng comprises – understanding the underlying the factors in the Paper & Paper Products 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.
Weaknesses of Mudanjiang Hengfeng | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Mudanjiang Hengfeng are -
No frontier risks strategy
– From the 10K / annual statement of Mudanjiang Hengfeng, it seems that company is thinking out the frontier risks that can impact Paper & Paper 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.
Compensation and incentives
– The revenue per employee of Mudanjiang Hengfeng is just above the Paper & Paper Products industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High dependence on Mudanjiang Hengfeng ‘s star products
– The top 2 products and services of Mudanjiang Hengfeng still accounts for major business revenue. This dependence on star products in Paper & Paper Products industry has resulted into insufficient focus on developing new products, even though Mudanjiang Hengfeng has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative at Mudanjiang Hengfeng, in the dynamic environment of Paper & Paper Products industry it has struggled to respond to the nimble upstart competition. Mudanjiang Hengfeng 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
Mudanjiang Hengfeng has a high cash cycle compare to other players in the Paper & Paper Products 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 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 Mudanjiang Hengfeng supply chain. Even after few cautionary changes, Mudanjiang Hengfeng is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Mudanjiang Hengfeng vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Mudanjiang Hengfeng 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, Mudanjiang Hengfeng has high operating costs in the Paper & Paper Products industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Mudanjiang Hengfeng lucrative customers.
Need for greater diversity
– Mudanjiang Hengfeng has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Capital Spending Reduction
– Even during the low interest decade, Mudanjiang Hengfeng 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 Paper & Paper Products industry using digital technology.
Workers concerns about automation
– As automation is fast increasing in the Paper & Paper Products industry, Mudanjiang Hengfeng 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.
Mudanjiang Hengfeng Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Mudanjiang Hengfeng are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Mudanjiang Hengfeng 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 Mudanjiang Hengfeng to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Mudanjiang Hengfeng can use the latest technology developments to improve its manufacturing and designing process in Paper & Paper Products 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Paper & Paper Products industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Mudanjiang Hengfeng 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. Mudanjiang Hengfeng 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Mudanjiang Hengfeng in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Paper & Paper Products 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 Paper & Paper Products industry, but it has also influenced the consumer preferences. Mudanjiang Hengfeng 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, Mudanjiang Hengfeng is facing challenges because of the dominance of functional experts in the organization. Mudanjiang Hengfeng can utilize new technology in the field of Paper & Paper Products industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Mudanjiang Hengfeng 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 Mudanjiang Hengfeng to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Mudanjiang Hengfeng 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Mudanjiang Hengfeng can use these opportunities to build new business models that can help the communities that Mudanjiang Hengfeng operates in. Secondly it can use opportunities from government spending in Paper & Paper Products sector.
Learning at scale
– Online learning technologies has now opened space for Mudanjiang Hengfeng 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.
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 Mudanjiang Hengfeng 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.
Leveraging digital technologies
– Mudanjiang Hengfeng 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.
Using analytics as competitive advantage
– Mudanjiang Hengfeng has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Paper & Paper Products sector. This continuous investment in analytics has enabled Mudanjiang Hengfeng to build a competitive advantage using analytics. The analytics driven competitive advantage can help Mudanjiang Hengfeng to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Mudanjiang Hengfeng External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Mudanjiang Hengfeng are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Mudanjiang Hengfeng 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 Mudanjiang Hengfeng prominent markets.
Shortening product life cycle
– it is one of the major threat that Mudanjiang Hengfeng is facing in Paper & Paper Products sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Mudanjiang Hengfeng may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Paper & Paper Products sector.
Environmental challenges
– Mudanjiang Hengfeng 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. Mudanjiang Hengfeng can take advantage of this fund but it will also bring new competitors in the Paper & Paper Products industry.
High dependence on third party suppliers
– Mudanjiang Hengfeng 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 Mudanjiang Hengfeng business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Mudanjiang Hengfeng in Paper & Paper Products industry. The Paper & Paper Products 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Paper & Paper Products industry are lowering. It can presents Mudanjiang Hengfeng with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Paper & Paper Products sector.
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. Mudanjiang Hengfeng needs to understand the core reasons impacting the Paper & Paper Products industry. This will help it in building a better workplace.
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 Mudanjiang Hengfeng in the Paper & Paper Products sector and impact the bottomline of the organization.
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.
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 Mudanjiang Hengfeng.
Consumer confidence and its impact on Mudanjiang Hengfeng 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 Paper & Paper Products industry and other sectors.
Weighted SWOT Analysis of Mudanjiang Hengfeng Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Mudanjiang Hengfeng 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 Mudanjiang Hengfeng 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 Mudanjiang Hengfeng 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 Mudanjiang Hengfeng 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 Mudanjiang Hengfeng needs to make to build a sustainable competitive advantage.
