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 – digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies,
central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, 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 -
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.
Analytics focus
– Mudanjiang Hengfeng 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 Paper & Paper Products 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.
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.
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.
Learning organization
- Mudanjiang Hengfeng 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 Mudanjiang Hengfeng is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Mudanjiang Hengfeng emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Mudanjiang Hengfeng is one of the most innovative firm in Paper & Paper Products sector.
Superior customer experience
– The customer experience strategy of Mudanjiang Hengfeng in Paper & Paper Products industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Mudanjiang Hengfeng is one of the leading players in the Paper & Paper 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.
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.
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.
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.
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.
Weaknesses of Mudanjiang Hengfeng | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Mudanjiang Hengfeng are -
Slow decision making process
– As mentioned earlier in the report, Mudanjiang Hengfeng has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Paper & Paper Products industry over the last five years. Mudanjiang Hengfeng 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 bargaining power of channel partners in Paper & Paper Products industry
– because of the regulatory requirements in China, Mudanjiang Hengfeng is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Paper & Paper Products industry.
Aligning sales with marketing
– From the outside it seems that Mudanjiang Hengfeng needs to have more collaboration between its sales team and marketing team. Sales professionals in the Paper & Paper Products industry have deep experience in developing customer relationships. Marketing department at Mudanjiang Hengfeng can leverage the sales team experience to cultivate customer relationships as Mudanjiang Hengfeng is planning to shift buying processes online.
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.
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.
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.
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.
Lack of clear differentiation of Mudanjiang Hengfeng products
– To increase the profitability and margins on the products, Mudanjiang Hengfeng needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Mudanjiang Hengfeng is dominated by functional specialists. It is not different from other players in the Paper & Paper Products industry, but Mudanjiang Hengfeng needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Mudanjiang Hengfeng to focus more on services in the Paper & Paper Products industry rather than just following the product oriented approach.
Products dominated business model
– Even though Mudanjiang Hengfeng has some of the most successful models in the Paper & Paper Products industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Mudanjiang Hengfeng should strive to include more intangible value offerings along with its core products and services.
Mudanjiang Hengfeng Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Mudanjiang Hengfeng are -
Use of Bitcoin and other crypto currencies for transactions in Paper & Paper Products industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Mudanjiang Hengfeng in the Paper & Paper Products industry. Now Mudanjiang Hengfeng can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Mudanjiang Hengfeng can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Mudanjiang Hengfeng has opened avenues for new revenue streams for the organization in Paper & Paper Products industry. This can help Mudanjiang Hengfeng to build a more holistic ecosystem for Mudanjiang Hengfeng products in the Paper & Paper Products industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Mudanjiang Hengfeng 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.
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.
Buying journey improvements
– Mudanjiang Hengfeng can improve the customer journey of consumers in the Paper & Paper 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 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.
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.
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. Mudanjiang Hengfeng can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Mudanjiang Hengfeng External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Mudanjiang Hengfeng are -
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.
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.
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.
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.
Easy access to finance
– Easy access to finance in Paper & Paper Products industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Mudanjiang Hengfeng can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
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.
Technology acceleration in Forth Industrial Revolution
– Mudanjiang Hengfeng has witnessed rapid integration of technology during Covid-19 in the Paper & Paper Products industry. As one of the leading players in the industry, Mudanjiang Hengfeng needs to keep up with the evolution of technology in the Paper & Paper 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.
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. Mudanjiang Hengfeng 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.
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.
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.
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.