SWOT Analysis / TOWS Matrix for Lanzhou Sanmao Industrial (China)
Based on various researches at Oak Spring University , Lanzhou Sanmao Industrial is operating in a macro-environment that has been destablized by – challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, geopolitical disruptions, increasing government debt because of Covid-19 spendings,
increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Lanzhou Sanmao Industrial
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Lanzhou Sanmao Industrial can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Lanzhou Sanmao Industrial, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Lanzhou Sanmao Industrial 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 Lanzhou Sanmao Industrial can be done for the following purposes –
1. Strategic planning of Lanzhou Sanmao Industrial
2. Improving business portfolio management of Lanzhou Sanmao Industrial
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 Lanzhou Sanmao Industrial
Strengths of Lanzhou Sanmao Industrial | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Lanzhou Sanmao Industrial are -
Low bargaining power of suppliers
– Suppliers of Lanzhou Sanmao Industrial in the Consumer Cyclical sector have low bargaining power. Lanzhou Sanmao Industrial has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Lanzhou Sanmao Industrial to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management in the Textiles - Non Apparel industry
– Lanzhou Sanmao Industrial is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Lanzhou Sanmao Industrial is one of the leading players in the Textiles - Non Apparel 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.
Operational resilience
– The operational resilience strategy of Lanzhou Sanmao Industrial 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.
Superior customer experience
– The customer experience strategy of Lanzhou Sanmao Industrial in Textiles - Non Apparel industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Lanzhou Sanmao Industrial has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Lanzhou Sanmao Industrial to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Lanzhou Sanmao Industrial is present in almost all the verticals within the Textiles - Non Apparel industry. This has provided Lanzhou Sanmao Industrial 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.
Highly skilled collaborators
– Lanzhou Sanmao Industrial has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Textiles - Non Apparel industry. Secondly the value chain collaborators of Lanzhou Sanmao Industrial have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Lanzhou Sanmao Industrial has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Lanzhou Sanmao Industrial 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.
Effective Research and Development (R&D)
– Lanzhou Sanmao Industrial has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Lanzhou Sanmao Industrial staying ahead in the Textiles - Non Apparel industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Lanzhou Sanmao Industrial 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.
Cross disciplinary teams
– Horizontal connected teams at the Lanzhou Sanmao Industrial 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.
Weaknesses of Lanzhou Sanmao Industrial | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Lanzhou Sanmao Industrial are -
Workers concerns about automation
– As automation is fast increasing in the Textiles - Non Apparel industry, Lanzhou Sanmao Industrial 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.
Lack of clear differentiation of Lanzhou Sanmao Industrial products
– To increase the profitability and margins on the products, Lanzhou Sanmao Industrial needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Lanzhou Sanmao Industrial 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.
Employees’ less understanding of Lanzhou Sanmao Industrial strategy
– From the outside it seems that the employees of Lanzhou Sanmao Industrial 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.
Skills based hiring in Textiles - Non Apparel industry
– The stress on hiring functional specialists at Lanzhou Sanmao Industrial 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.
Increasing silos among functional specialists
– The organizational structure of Lanzhou Sanmao Industrial is dominated by functional specialists. It is not different from other players in the Textiles - Non Apparel industry, but Lanzhou Sanmao Industrial needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Lanzhou Sanmao Industrial to focus more on services in the Textiles - Non Apparel industry rather than just following the product oriented approach.
Need for greater diversity
– Lanzhou Sanmao Industrial 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.
Low market penetration in new markets
– Outside its home market of China, Lanzhou Sanmao Industrial needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Lanzhou Sanmao Industrial 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, Lanzhou Sanmao Industrial 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 Lanzhou Sanmao Industrial lucrative customers.
Products dominated business model
– Even though Lanzhou Sanmao Industrial has some of the most successful models in the Textiles - Non Apparel industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Lanzhou Sanmao Industrial should strive to include more intangible value offerings along with its core products and services.
Lanzhou Sanmao Industrial Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Lanzhou Sanmao Industrial are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Textiles - Non Apparel industry, but it has also influenced the consumer preferences. Lanzhou Sanmao Industrial can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Lanzhou Sanmao Industrial 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.
Learning at scale
– Online learning technologies has now opened space for Lanzhou Sanmao Industrial 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Lanzhou Sanmao Industrial can use these opportunities to build new business models that can help the communities that Lanzhou Sanmao Industrial operates in. Secondly it can use opportunities from government spending in Textiles - Non Apparel sector.
Developing new processes and practices
– Lanzhou Sanmao Industrial 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Lanzhou Sanmao Industrial 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 Lanzhou Sanmao Industrial to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Lanzhou Sanmao Industrial 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.
Creating value in data economy
– The success of analytics program of Lanzhou Sanmao Industrial has opened avenues for new revenue streams for the organization in Textiles - Non Apparel industry. This can help Lanzhou Sanmao Industrial to build a more holistic ecosystem for Lanzhou Sanmao Industrial products in the Textiles - Non Apparel industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Lanzhou Sanmao Industrial 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.
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 Lanzhou Sanmao Industrial in the Textiles - Non Apparel industry. Now Lanzhou Sanmao Industrial can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Lanzhou Sanmao Industrial to increase its market reach. Lanzhou Sanmao Industrial 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Lanzhou Sanmao Industrial is facing challenges because of the dominance of functional experts in the organization. Lanzhou Sanmao Industrial can utilize new technology in the field of Textiles - Non Apparel industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Using analytics as competitive advantage
– Lanzhou Sanmao Industrial has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Textiles - Non Apparel sector. This continuous investment in analytics has enabled Lanzhou Sanmao Industrial to build a competitive advantage using analytics. The analytics driven competitive advantage can help Lanzhou Sanmao Industrial to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Lanzhou Sanmao Industrial External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Lanzhou Sanmao Industrial 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 Lanzhou Sanmao Industrial business can come under increasing regulations regarding data privacy, data security, etc.
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.
Environmental challenges
– Lanzhou Sanmao Industrial 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. Lanzhou Sanmao Industrial can take advantage of this fund but it will also bring new competitors in the Textiles - Non Apparel industry.
High dependence on third party suppliers
– Lanzhou Sanmao Industrial 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.
Technology acceleration in Forth Industrial Revolution
– Lanzhou Sanmao Industrial has witnessed rapid integration of technology during Covid-19 in the Textiles - Non Apparel industry. As one of the leading players in the industry, Lanzhou Sanmao Industrial 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.
Shortening product life cycle
– it is one of the major threat that Lanzhou Sanmao Industrial is facing in Textiles - Non Apparel sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Lanzhou Sanmao Industrial.
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. Lanzhou Sanmao Industrial can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Lanzhou Sanmao Industrial 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.
Regulatory challenges
– Lanzhou Sanmao Industrial 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 Textiles - Non Apparel industry regulations.
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.
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 Lanzhou Sanmao Industrial in the Textiles - Non Apparel sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Lanzhou Sanmao Industrial 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.
Weighted SWOT Analysis of Lanzhou Sanmao Industrial Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Lanzhou Sanmao Industrial 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 Lanzhou Sanmao Industrial 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 Lanzhou Sanmao Industrial 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 Lanzhou Sanmao Industrial 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 Lanzhou Sanmao Industrial needs to make to build a sustainable competitive advantage.
