Changzhou Tiansheng New Materials (300169) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Changzhou Tiansheng New Materials (China)

Based on various researches at Oak Spring University , Changzhou Tiansheng New Materials is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, technology disruption, supply chains are disrupted by pandemic , wage bills are increasing, cloud computing is disrupting traditional business models, etc

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Introduction to SWOT Analysis of Changzhou Tiansheng New Materials

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Changzhou Tiansheng New Materials can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Changzhou Tiansheng New Materials, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Changzhou Tiansheng New Materials 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Changzhou Tiansheng New Materials can be done for the following purposes –
1. Strategic planning of Changzhou Tiansheng New Materials
2. Improving business portfolio management of Changzhou Tiansheng New Materials
3. Assessing feasibility of the new initiative in China
4. Making a Containers & Packaging sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Changzhou Tiansheng New Materials

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Strengths of Changzhou Tiansheng New Materials | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Changzhou Tiansheng New Materials are -

Cross disciplinary teams

– Horizontal connected teams at the Changzhou Tiansheng New Materials 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.

Highly skilled collaborators

– Changzhou Tiansheng New Materials has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Containers & Packaging industry. Secondly the value chain collaborators of Changzhou Tiansheng New Materials have helped the firm to develop new products and bring them quickly to the marketplace.

Low bargaining power of suppliers

– Suppliers of Changzhou Tiansheng New Materials in the Basic Materials sector have low bargaining power. Changzhou Tiansheng New Materials has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Changzhou Tiansheng New Materials to manage not only supply disruptions but also source products at highly competitive prices.

High switching costs

– The high switching costs that Changzhou Tiansheng New Materials 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.

Strong track record of project management in the Containers & Packaging industry

– Changzhou Tiansheng New Materials is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Learning organization

- Changzhou Tiansheng New Materials 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 Changzhou Tiansheng New Materials is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Changzhou Tiansheng New Materials emphasize – knowledge, initiative, and innovation.

High brand equity

– Changzhou Tiansheng New Materials has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Changzhou Tiansheng New Materials to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Digital Transformation in Containers & Packaging industry

- digital transformation varies from industry to industry. For Changzhou Tiansheng New Materials digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Changzhou Tiansheng New Materials 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.

Diverse revenue streams

– Changzhou Tiansheng New Materials is present in almost all the verticals within the Containers & Packaging industry. This has provided Changzhou Tiansheng New Materials 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.

Ability to lead change in Containers & Packaging

– Changzhou Tiansheng New Materials is one of the leading players in the Containers & Packaging industry in China. Over the years it has not only transformed the business landscape in the Containers & Packaging industry in China but also across the existing markets. The ability to lead change has enabled Changzhou Tiansheng New Materials in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Sustainable margins compare to other players in Containers & Packaging industry

– Changzhou Tiansheng New Materials has clearly differentiated products in the market place. This has enabled Changzhou Tiansheng New Materials to fetch slight price premium compare to the competitors in the Containers & Packaging industry. The sustainable margins have also helped Changzhou Tiansheng New Materials to invest into research and development (R&D) and innovation.

Effective Research and Development (R&D)

– Changzhou Tiansheng New Materials has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Changzhou Tiansheng New Materials staying ahead in the Containers & Packaging industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

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Weaknesses of Changzhou Tiansheng New Materials | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Changzhou Tiansheng New Materials are -

High cash cycle compare to competitors

Changzhou Tiansheng New Materials has a high cash cycle compare to other players in the Containers & Packaging industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Slow to strategic competitive environment developments

– As Changzhou Tiansheng New Materials is one of the leading players in the Containers & Packaging industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Containers & Packaging industry in last five years.

Workers concerns about automation

– As automation is fast increasing in the Containers & Packaging industry, Changzhou Tiansheng New Materials 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.

High operating costs

– Compare to the competitors, Changzhou Tiansheng New Materials has high operating costs in the Containers & Packaging industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Changzhou Tiansheng New Materials lucrative customers.

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 Changzhou Tiansheng New Materials supply chain. Even after few cautionary changes, Changzhou Tiansheng New Materials is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Changzhou Tiansheng New Materials vulnerable to further global disruptions in South East Asia.

Slow decision making process

– As mentioned earlier in the report, Changzhou Tiansheng New Materials has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Containers & Packaging industry over the last five years. Changzhou Tiansheng New Materials 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.

Interest costs

– Compare to the competition, Changzhou Tiansheng New Materials 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 dependence on Changzhou Tiansheng New Materials ‘s star products

– The top 2 products and services of Changzhou Tiansheng New Materials still accounts for major business revenue. This dependence on star products in Containers & Packaging industry has resulted into insufficient focus on developing new products, even though Changzhou Tiansheng New Materials has relatively successful track record of launching new products.

Employees’ less understanding of Changzhou Tiansheng New Materials strategy

– From the outside it seems that the employees of Changzhou Tiansheng New Materials 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.

Increasing silos among functional specialists

– The organizational structure of Changzhou Tiansheng New Materials is dominated by functional specialists. It is not different from other players in the Containers & Packaging industry, but Changzhou Tiansheng New Materials needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Changzhou Tiansheng New Materials to focus more on services in the Containers & Packaging industry rather than just following the product oriented approach.

Low market penetration in new markets

– Outside its home market of China, Changzhou Tiansheng New Materials needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

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Changzhou Tiansheng New Materials Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Changzhou Tiansheng New Materials are -

Creating value in data economy

– The success of analytics program of Changzhou Tiansheng New Materials has opened avenues for new revenue streams for the organization in Containers & Packaging industry. This can help Changzhou Tiansheng New Materials to build a more holistic ecosystem for Changzhou Tiansheng New Materials products in the Containers & Packaging industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Building a culture of innovation

– managers at Changzhou Tiansheng New Materials can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Containers & Packaging industry.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Containers & Packaging industry, but it has also influenced the consumer preferences. Changzhou Tiansheng New Materials can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Changzhou Tiansheng New Materials in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Containers & Packaging industry, and it will provide faster access to the consumers.

Better consumer reach

– The expansion of the 5G network will help Changzhou Tiansheng New Materials to increase its market reach. Changzhou Tiansheng New Materials 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Changzhou Tiansheng New Materials can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

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. Changzhou Tiansheng New Materials can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Containers & Packaging industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Changzhou Tiansheng New Materials 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. Changzhou Tiansheng New Materials 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Changzhou Tiansheng New Materials can use these opportunities to build new business models that can help the communities that Changzhou Tiansheng New Materials operates in. Secondly it can use opportunities from government spending in Containers & Packaging sector.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Changzhou Tiansheng New Materials 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 Changzhou Tiansheng New Materials to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Changzhou Tiansheng New Materials 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 Changzhou Tiansheng New Materials to hire the very best people irrespective of their geographical location.

Leveraging digital technologies

– Changzhou Tiansheng New Materials 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.

Learning at scale

– Online learning technologies has now opened space for Changzhou Tiansheng New Materials 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.

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Threats Changzhou Tiansheng New Materials External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Changzhou Tiansheng New Materials are -

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 Changzhou Tiansheng New Materials.

Environmental challenges

– Changzhou Tiansheng New Materials 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. Changzhou Tiansheng New Materials can take advantage of this fund but it will also bring new competitors in the Containers & Packaging industry.

Regulatory challenges

– Changzhou Tiansheng New Materials 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 Containers & Packaging industry regulations.

Stagnating economy with rate increase

– Changzhou Tiansheng New Materials 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 Containers & Packaging industry.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Changzhou Tiansheng New Materials may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Containers & Packaging sector.

Shortening product life cycle

– it is one of the major threat that Changzhou Tiansheng New Materials is facing in Containers & Packaging sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Containers & Packaging industry are lowering. It can presents Changzhou Tiansheng New Materials with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Containers & Packaging sector.

Technology acceleration in Forth Industrial Revolution

– Changzhou Tiansheng New Materials has witnessed rapid integration of technology during Covid-19 in the Containers & Packaging industry. As one of the leading players in the industry, Changzhou Tiansheng New Materials needs to keep up with the evolution of technology in the Containers & Packaging 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.

Increasing wage structure of Changzhou Tiansheng New Materials

– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Changzhou Tiansheng New Materials.

Consumer confidence and its impact on Changzhou Tiansheng New Materials 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 Containers & Packaging industry and other sectors.

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. Changzhou Tiansheng New Materials 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 Containers & Packaging industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Changzhou Tiansheng New Materials can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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.

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Weighted SWOT Analysis of Changzhou Tiansheng New Materials Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Changzhou Tiansheng New Materials 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 Changzhou Tiansheng New Materials 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 Changzhou Tiansheng New Materials 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 Changzhou Tiansheng New Materials 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 Changzhou Tiansheng New Materials needs to make to build a sustainable competitive advantage.

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