Ningbo Xianfeng New Material (300163) SWOT Analysis / TOWS Matrix / MBA Resources
Chemicals - Plastics & Rubber
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Ningbo Xianfeng New Material (China)
Based on various researches at Oak Spring University , Ningbo Xianfeng New Material is operating in a macro-environment that has been destablized by – challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, increasing energy prices, increasing household debt because of falling income levels,
increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Ningbo Xianfeng New Material
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Ningbo Xianfeng New Material can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ningbo Xianfeng New Material, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ningbo Xianfeng 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 Ningbo Xianfeng New Material can be done for the following purposes –
1. Strategic planning of Ningbo Xianfeng New Material
2. Improving business portfolio management of Ningbo Xianfeng New Material
3. Assessing feasibility of the new initiative in China
4. Making a Chemicals - Plastics & Rubber sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ningbo Xianfeng New Material
Strengths of Ningbo Xianfeng New Material | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ningbo Xianfeng New Material are -
Innovation driven organization
– Ningbo Xianfeng New Material is one of the most innovative firm in Chemicals - Plastics & Rubber sector.
Diverse revenue streams
– Ningbo Xianfeng New Material is present in almost all the verticals within the Chemicals - Plastics & Rubber industry. This has provided Ningbo Xianfeng New Material 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.
Successful track record of launching new products
– Ningbo Xianfeng New Material has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ningbo Xianfeng 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.
Ability to lead change in Chemicals - Plastics & Rubber
– Ningbo Xianfeng New Material is one of the leading players in the Chemicals - Plastics & Rubber industry in China. Over the years it has not only transformed the business landscape in the Chemicals - Plastics & Rubber industry in China but also across the existing markets. The ability to lead change has enabled Ningbo Xianfeng New Material in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Ningbo Xianfeng New Material in the Basic Materials sector have low bargaining power. Ningbo Xianfeng New Material has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ningbo Xianfeng New Material to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Chemicals - Plastics & Rubber industry
– Ningbo Xianfeng New Material has clearly differentiated products in the market place. This has enabled Ningbo Xianfeng New Material to fetch slight price premium compare to the competitors in the Chemicals - Plastics & Rubber industry. The sustainable margins have also helped Ningbo Xianfeng New Material to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy of Ningbo Xianfeng New Material comprises – understanding the underlying the factors in the Chemicals - Plastics & Rubber 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.
Ability to recruit top talent
– Ningbo Xianfeng New Material is one of the leading players in the Chemicals - Plastics & Rubber 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.
Effective Research and Development (R&D)
– Ningbo Xianfeng New Material has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Ningbo Xianfeng New Material staying ahead in the Chemicals - Plastics & Rubber industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Ningbo Xianfeng New Material has one of the best training and development program in Basic Materials 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.
Highly skilled collaborators
– Ningbo Xianfeng New Material has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Chemicals - Plastics & Rubber industry. Secondly the value chain collaborators of Ningbo Xianfeng New Material have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Ningbo Xianfeng 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.
Weaknesses of Ningbo Xianfeng New Material | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ningbo Xianfeng New Material are -
Employees’ less understanding of Ningbo Xianfeng New Material strategy
– From the outside it seems that the employees of Ningbo Xianfeng 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.
Lack of clear differentiation of Ningbo Xianfeng New Material products
– To increase the profitability and margins on the products, Ningbo Xianfeng New Material needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Ningbo Xianfeng New Material supply chain. Even after few cautionary changes, Ningbo Xianfeng New Material is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ningbo Xianfeng New Material vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ningbo Xianfeng New Material is slow explore the new channels of communication. These new channels of communication can help Ningbo Xianfeng New Material to provide better information regarding Chemicals - Plastics & Rubber products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– From the outside it seems that Ningbo Xianfeng New Material needs to have more collaboration between its sales team and marketing team. Sales professionals in the Chemicals - Plastics & Rubber industry have deep experience in developing customer relationships. Marketing department at Ningbo Xianfeng New Material can leverage the sales team experience to cultivate customer relationships as Ningbo Xianfeng New Material is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Ningbo Xianfeng New Material is dominated by functional specialists. It is not different from other players in the Chemicals - Plastics & Rubber industry, but Ningbo Xianfeng New Material needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ningbo Xianfeng New Material to focus more on services in the Chemicals - Plastics & Rubber industry rather than just following the product oriented approach.
High bargaining power of channel partners in Chemicals - Plastics & Rubber industry
– because of the regulatory requirements in China, Ningbo Xianfeng New Material 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 Chemicals - Plastics & Rubber industry.
High cash cycle compare to competitors
Ningbo Xianfeng New Material has a high cash cycle compare to other players in the Chemicals - Plastics & Rubber industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Products dominated business model
– Even though Ningbo Xianfeng New Material has some of the most successful models in the Chemicals - Plastics & Rubber industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Ningbo Xianfeng New Material should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of China, Ningbo Xianfeng New Material needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– From the 10K / annual statement of Ningbo Xianfeng New Material, it seems that company is thinking out the frontier risks that can impact Chemicals - Plastics & Rubber 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.
Ningbo Xianfeng New Material Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Ningbo Xianfeng New Material are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ningbo Xianfeng 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ningbo Xianfeng New Material 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 Ningbo Xianfeng New Material to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ningbo Xianfeng New Material 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 Ningbo Xianfeng New Material to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ningbo Xianfeng New Material can use these opportunities to build new business models that can help the communities that Ningbo Xianfeng New Material operates in. Secondly it can use opportunities from government spending in Chemicals - Plastics & Rubber sector.
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 Ningbo Xianfeng New Material 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ningbo Xianfeng 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.
Creating value in data economy
– The success of analytics program of Ningbo Xianfeng New Material has opened avenues for new revenue streams for the organization in Chemicals - Plastics & Rubber industry. This can help Ningbo Xianfeng New Material to build a more holistic ecosystem for Ningbo Xianfeng New Material products in the Chemicals - Plastics & Rubber industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Ningbo Xianfeng New Material has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Chemicals - Plastics & Rubber sector. This continuous investment in analytics has enabled Ningbo Xianfeng New Material to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ningbo Xianfeng New Material to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ningbo Xianfeng New Material is facing challenges because of the dominance of functional experts in the organization. Ningbo Xianfeng New Material can utilize new technology in the field of Chemicals - Plastics & Rubber industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Loyalty marketing
– Ningbo Xianfeng 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Chemicals - Plastics & Rubber industry, but it has also influenced the consumer preferences. Ningbo Xianfeng New Material can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Ningbo Xianfeng New Material can use the latest technology developments to improve its manufacturing and designing process in Chemicals - Plastics & Rubber 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.
Better consumer reach
– The expansion of the 5G network will help Ningbo Xianfeng New Material to increase its market reach. Ningbo Xianfeng New Material 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.
Threats Ningbo Xianfeng New Material External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Ningbo Xianfeng New Material are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ningbo Xianfeng 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 Ningbo Xianfeng New Material prominent markets.
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 Ningbo Xianfeng New Material in the Chemicals - Plastics & Rubber sector and impact the bottomline of the organization.
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. Ningbo Xianfeng New Material needs to understand the core reasons impacting the Chemicals - Plastics & Rubber industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Chemicals - Plastics & Rubber industry are lowering. It can presents Ningbo Xianfeng New Material with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Chemicals - Plastics & Rubber 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.
Stagnating economy with rate increase
– Ningbo Xianfeng 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 Chemicals - Plastics & Rubber industry.
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 Ningbo Xianfeng New Material business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Ningbo Xianfeng New Material has witnessed rapid integration of technology during Covid-19 in the Chemicals - Plastics & Rubber industry. As one of the leading players in the industry, Ningbo Xianfeng New Material needs to keep up with the evolution of technology in the Chemicals - Plastics & Rubber 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ningbo Xianfeng New Material in Chemicals - Plastics & Rubber industry. The Chemicals - Plastics & Rubber 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Ningbo Xianfeng New Material may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Chemicals - Plastics & Rubber sector.
Shortening product life cycle
– it is one of the major threat that Ningbo Xianfeng New Material is facing in Chemicals - Plastics & Rubber sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Ningbo Xianfeng New Material 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.
Easy access to finance
– Easy access to finance in Chemicals - Plastics & Rubber industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Ningbo Xianfeng 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.
Weighted SWOT Analysis of Ningbo Xianfeng New Material Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Ningbo Xianfeng 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 Ningbo Xianfeng 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 Ningbo Xianfeng 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 Ningbo Xianfeng 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 Ningbo Xianfeng New Material needs to make to build a sustainable competitive advantage.