Wuhan Xianglong Power (600769) SWOT Analysis / TOWS Matrix / MBA Resources
Water Utilities
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Wuhan Xianglong Power (China)
Based on various researches at Oak Spring University , Wuhan Xianglong Power is operating in a macro-environment that has been destablized by – increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, increasing commodity prices, there is backlash against globalization, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels,
customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Wuhan Xianglong Power
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Wuhan Xianglong Power can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Wuhan Xianglong Power, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Wuhan Xianglong Power 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 Wuhan Xianglong Power can be done for the following purposes –
1. Strategic planning of Wuhan Xianglong Power
2. Improving business portfolio management of Wuhan Xianglong Power
3. Assessing feasibility of the new initiative in China
4. Making a Water Utilities sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Wuhan Xianglong Power
Strengths of Wuhan Xianglong Power | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Wuhan Xianglong Power are -
Effective Research and Development (R&D)
– Wuhan Xianglong Power has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Wuhan Xianglong Power staying ahead in the Water Utilities industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Wuhan Xianglong Power is present in almost all the verticals within the Water Utilities industry. This has provided Wuhan Xianglong Power 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.
High brand equity
– Wuhan Xianglong Power has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Wuhan Xianglong Power to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Wuhan Xianglong Power 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.
Low bargaining power of suppliers
– Suppliers of Wuhan Xianglong Power in the Utilities sector have low bargaining power. Wuhan Xianglong Power has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Wuhan Xianglong Power to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Water Utilities industry
– Wuhan Xianglong Power has clearly differentiated products in the market place. This has enabled Wuhan Xianglong Power to fetch slight price premium compare to the competitors in the Water Utilities industry. The sustainable margins have also helped Wuhan Xianglong Power to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Wuhan Xianglong Power 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.
Operational resilience
– The operational resilience strategy of Wuhan Xianglong Power comprises – understanding the underlying the factors in the Water Utilities 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 Wuhan Xianglong Power in Water Utilities industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Wuhan Xianglong Power has one of the best training and development program in Utilities 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.
Ability to lead change in Water Utilities
– Wuhan Xianglong Power is one of the leading players in the Water Utilities industry in China. Over the years it has not only transformed the business landscape in the Water Utilities industry in China but also across the existing markets. The ability to lead change has enabled Wuhan Xianglong Power in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Wuhan Xianglong Power has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Wuhan Xianglong Power 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.
Weaknesses of Wuhan Xianglong Power | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Wuhan Xianglong Power are -
Workers concerns about automation
– As automation is fast increasing in the Water Utilities industry, Wuhan Xianglong Power 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.
Employees’ less understanding of Wuhan Xianglong Power strategy
– From the outside it seems that the employees of Wuhan Xianglong Power 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.
High operating costs
– Compare to the competitors, Wuhan Xianglong Power has high operating costs in the Water Utilities industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Wuhan Xianglong Power lucrative customers.
Aligning sales with marketing
– From the outside it seems that Wuhan Xianglong Power needs to have more collaboration between its sales team and marketing team. Sales professionals in the Water Utilities industry have deep experience in developing customer relationships. Marketing department at Wuhan Xianglong Power can leverage the sales team experience to cultivate customer relationships as Wuhan Xianglong Power is planning to shift buying processes online.
Lack of clear differentiation of Wuhan Xianglong Power products
– To increase the profitability and margins on the products, Wuhan Xianglong Power needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Wuhan Xianglong Power has a high cash cycle compare to other players in the Water Utilities 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 Wuhan Xianglong Power has some of the most successful models in the Water Utilities industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Wuhan Xianglong Power should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners in Water Utilities industry
– because of the regulatory requirements in China, Wuhan Xianglong Power 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 Water Utilities industry.
Skills based hiring in Water Utilities industry
– The stress on hiring functional specialists at Wuhan Xianglong Power 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.
Need for greater diversity
– Wuhan Xianglong Power 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.
Slow decision making process
– As mentioned earlier in the report, Wuhan Xianglong Power has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Water Utilities industry over the last five years. Wuhan Xianglong Power 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.
Wuhan Xianglong Power Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Wuhan Xianglong Power are -
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 Wuhan Xianglong Power 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.
Manufacturing automation
– Wuhan Xianglong Power can use the latest technology developments to improve its manufacturing and designing process in Water Utilities 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 Wuhan Xianglong Power to increase its market reach. Wuhan Xianglong Power 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Wuhan Xianglong Power 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 Wuhan Xianglong Power to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Water Utilities industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Wuhan Xianglong Power 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. Wuhan Xianglong Power 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.
Creating value in data economy
– The success of analytics program of Wuhan Xianglong Power has opened avenues for new revenue streams for the organization in Water Utilities industry. This can help Wuhan Xianglong Power to build a more holistic ecosystem for Wuhan Xianglong Power products in the Water Utilities industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Wuhan Xianglong Power 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.
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. Wuhan Xianglong Power can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Wuhan Xianglong Power has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Water Utilities sector. This continuous investment in analytics has enabled Wuhan Xianglong Power to build a competitive advantage using analytics. The analytics driven competitive advantage can help Wuhan Xianglong Power 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, Wuhan Xianglong Power is facing challenges because of the dominance of functional experts in the organization. Wuhan Xianglong Power can utilize new technology in the field of Water Utilities industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Wuhan Xianglong Power can use these opportunities to build new business models that can help the communities that Wuhan Xianglong Power operates in. Secondly it can use opportunities from government spending in Water Utilities sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Wuhan Xianglong Power in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Water Utilities industry, and it will provide faster access to the consumers.
Loyalty marketing
– Wuhan Xianglong Power 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.
Threats Wuhan Xianglong Power External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Wuhan Xianglong Power are -
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.
Easy access to finance
– Easy access to finance in Water Utilities industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Wuhan Xianglong Power can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Wuhan Xianglong Power 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 Water Utilities industry regulations.
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. Wuhan Xianglong Power 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Water Utilities industry are lowering. It can presents Wuhan Xianglong Power with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Water Utilities sector.
Shortening product life cycle
– it is one of the major threat that Wuhan Xianglong Power is facing in Water Utilities sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Wuhan Xianglong Power has witnessed rapid integration of technology during Covid-19 in the Water Utilities industry. As one of the leading players in the industry, Wuhan Xianglong Power needs to keep up with the evolution of technology in the Water Utilities 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.
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. Wuhan Xianglong Power needs to understand the core reasons impacting the Water Utilities industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Wuhan Xianglong Power 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 Wuhan Xianglong Power prominent markets.
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.
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 Wuhan Xianglong Power in the Water Utilities sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Wuhan Xianglong Power high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Stagnating economy with rate increase
– Wuhan Xianglong Power 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 Water Utilities industry.
Weighted SWOT Analysis of Wuhan Xianglong Power Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Wuhan Xianglong Power 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 Wuhan Xianglong Power 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 Wuhan Xianglong Power 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 Wuhan Xianglong Power 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 Wuhan Xianglong Power needs to make to build a sustainable competitive advantage.