Hunan China Sun Pharma Machinery (300216) SWOT Analysis / TOWS Matrix / MBA Resources
Misc. Capital Goods
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Hunan China Sun Pharma Machinery (China)
Based on various researches at Oak Spring University , Hunan China Sun Pharma Machinery is operating in a macro-environment that has been destablized by – increasing energy prices, technology disruption, challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, there is backlash against globalization, central banks are concerned over increasing inflation,
supply chains are disrupted by pandemic , there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Hunan China Sun Pharma Machinery
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Hunan China Sun Pharma Machinery can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hunan China Sun Pharma Machinery, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hunan China Sun Pharma Machinery 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 Hunan China Sun Pharma Machinery can be done for the following purposes –
1. Strategic planning of Hunan China Sun Pharma Machinery
2. Improving business portfolio management of Hunan China Sun Pharma Machinery
3. Assessing feasibility of the new initiative in China
4. Making a Misc. Capital Goods sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hunan China Sun Pharma Machinery
Strengths of Hunan China Sun Pharma Machinery | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hunan China Sun Pharma Machinery are -
Analytics focus
– Hunan China Sun Pharma Machinery is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the Misc. Capital Goods industry. The technology infrastructure of China is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Diverse revenue streams
– Hunan China Sun Pharma Machinery is present in almost all the verticals within the Misc. Capital Goods industry. This has provided Hunan China Sun Pharma Machinery 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 recruit top talent
– Hunan China Sun Pharma Machinery is one of the leading players in the Misc. Capital Goods 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.
Low bargaining power of suppliers
– Suppliers of Hunan China Sun Pharma Machinery in the Capital Goods sector have low bargaining power. Hunan China Sun Pharma Machinery has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hunan China Sun Pharma Machinery to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management in the Misc. Capital Goods industry
– Hunan China Sun Pharma Machinery is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Hunan China Sun Pharma Machinery has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Hunan China Sun Pharma Machinery staying ahead in the Misc. Capital Goods industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Misc. Capital Goods industry
– Hunan China Sun Pharma Machinery has clearly differentiated products in the market place. This has enabled Hunan China Sun Pharma Machinery to fetch slight price premium compare to the competitors in the Misc. Capital Goods industry. The sustainable margins have also helped Hunan China Sun Pharma Machinery to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Hunan China Sun Pharma Machinery in Misc. Capital Goods industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Hunan China Sun Pharma Machinery has one of the best training and development program in Capital Goods 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 Misc. Capital Goods
– Hunan China Sun Pharma Machinery is one of the leading players in the Misc. Capital Goods industry in China. Over the years it has not only transformed the business landscape in the Misc. Capital Goods industry in China but also across the existing markets. The ability to lead change has enabled Hunan China Sun Pharma Machinery 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
– Hunan China Sun Pharma Machinery has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hunan China Sun Pharma Machinery 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.
Digital Transformation in Misc. Capital Goods industry
- digital transformation varies from industry to industry. For Hunan China Sun Pharma Machinery digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hunan China Sun Pharma Machinery 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.
Weaknesses of Hunan China Sun Pharma Machinery | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hunan China Sun Pharma Machinery are -
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 Hunan China Sun Pharma Machinery supply chain. Even after few cautionary changes, Hunan China Sun Pharma Machinery is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hunan China Sun Pharma Machinery vulnerable to further global disruptions in South East Asia.
High dependence on Hunan China Sun Pharma Machinery ‘s star products
– The top 2 products and services of Hunan China Sun Pharma Machinery still accounts for major business revenue. This dependence on star products in Misc. Capital Goods industry has resulted into insufficient focus on developing new products, even though Hunan China Sun Pharma Machinery has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Hunan China Sun Pharma Machinery is dominated by functional specialists. It is not different from other players in the Misc. Capital Goods industry, but Hunan China Sun Pharma Machinery needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hunan China Sun Pharma Machinery to focus more on services in the Misc. Capital Goods industry rather than just following the product oriented approach.
High bargaining power of channel partners in Misc. Capital Goods industry
– because of the regulatory requirements in China, Hunan China Sun Pharma Machinery 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 Misc. Capital Goods industry.
Slow to strategic competitive environment developments
– As Hunan China Sun Pharma Machinery is one of the leading players in the Misc. Capital Goods industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Misc. Capital Goods industry in last five years.
Low market penetration in new markets
– Outside its home market of China, Hunan China Sun Pharma Machinery needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring in Misc. Capital Goods industry
– The stress on hiring functional specialists at Hunan China Sun Pharma Machinery 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.
Slow decision making process
– As mentioned earlier in the report, Hunan China Sun Pharma Machinery has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Misc. Capital Goods industry over the last five years. Hunan China Sun Pharma Machinery 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.
Products dominated business model
– Even though Hunan China Sun Pharma Machinery has some of the most successful models in the Misc. Capital Goods industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Hunan China Sun Pharma Machinery should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Hunan China Sun Pharma Machinery has a high cash cycle compare to other players in the Misc. Capital Goods industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
No frontier risks strategy
– From the 10K / annual statement of Hunan China Sun Pharma Machinery, it seems that company is thinking out the frontier risks that can impact Misc. Capital Goods 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.
Hunan China Sun Pharma Machinery Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Hunan China Sun Pharma Machinery 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 Hunan China Sun Pharma Machinery 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hunan China Sun Pharma Machinery 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 Hunan China Sun Pharma Machinery to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hunan China Sun Pharma Machinery in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Misc. Capital Goods industry, and it will provide faster access to the consumers.
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. Hunan China Sun Pharma Machinery can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Misc. Capital Goods industry, but it has also influenced the consumer preferences. Hunan China Sun Pharma Machinery can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hunan China Sun Pharma Machinery is facing challenges because of the dominance of functional experts in the organization. Hunan China Sun Pharma Machinery can utilize new technology in the field of Misc. Capital Goods industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Leveraging digital technologies
– Hunan China Sun Pharma Machinery 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.
Use of Bitcoin and other crypto currencies for transactions in Misc. Capital Goods industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Hunan China Sun Pharma Machinery in the Misc. Capital Goods industry. Now Hunan China Sun Pharma Machinery can target international markets with far fewer capital restrictions requirements than the existing system.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Misc. Capital Goods industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Hunan China Sun Pharma Machinery 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. Hunan China Sun Pharma Machinery 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.
Better consumer reach
– The expansion of the 5G network will help Hunan China Sun Pharma Machinery to increase its market reach. Hunan China Sun Pharma Machinery 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hunan China Sun Pharma Machinery can use these opportunities to build new business models that can help the communities that Hunan China Sun Pharma Machinery operates in. Secondly it can use opportunities from government spending in Misc. Capital Goods sector.
Creating value in data economy
– The success of analytics program of Hunan China Sun Pharma Machinery has opened avenues for new revenue streams for the organization in Misc. Capital Goods industry. This can help Hunan China Sun Pharma Machinery to build a more holistic ecosystem for Hunan China Sun Pharma Machinery products in the Misc. Capital Goods 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 Hunan China Sun Pharma Machinery 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.
Threats Hunan China Sun Pharma Machinery External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Hunan China Sun Pharma Machinery are -
High dependence on third party suppliers
– Hunan China Sun Pharma Machinery 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.
Increasing wage structure of Hunan China Sun Pharma Machinery
– 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 Hunan China Sun Pharma Machinery.
Environmental challenges
– Hunan China Sun Pharma Machinery 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. Hunan China Sun Pharma Machinery can take advantage of this fund but it will also bring new competitors in the Misc. Capital Goods industry.
Easy access to finance
– Easy access to finance in Misc. Capital Goods industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Hunan China Sun Pharma Machinery can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Hunan China Sun Pharma Machinery 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 Misc. Capital Goods industry and other sectors.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hunan China Sun Pharma Machinery in Misc. Capital Goods industry. The Misc. Capital Goods 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.
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. Hunan China Sun Pharma Machinery 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 Misc. Capital Goods industry are lowering. It can presents Hunan China Sun Pharma Machinery with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Misc. Capital Goods sector.
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 Hunan China Sun Pharma Machinery.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hunan China Sun Pharma Machinery 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 Hunan China Sun Pharma Machinery prominent markets.
Shortening product life cycle
– it is one of the major threat that Hunan China Sun Pharma Machinery is facing in Misc. Capital Goods sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Hunan China Sun Pharma Machinery has witnessed rapid integration of technology during Covid-19 in the Misc. Capital Goods industry. As one of the leading players in the industry, Hunan China Sun Pharma Machinery needs to keep up with the evolution of technology in the Misc. Capital Goods 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.
Weighted SWOT Analysis of Hunan China Sun Pharma Machinery Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Hunan China Sun Pharma Machinery 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 Hunan China Sun Pharma Machinery 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 Hunan China Sun Pharma Machinery 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 Hunan China Sun Pharma Machinery 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 Hunan China Sun Pharma Machinery needs to make to build a sustainable competitive advantage.
