SWOT Analysis / TOWS Matrix for Jiangsu Luokai Mechanical (China)
Based on various researches at Oak Spring University , Jiangsu Luokai Mechanical is operating in a macro-environment that has been destablized by – increasing energy prices, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, increasing government debt because of Covid-19 spendings,
increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Jiangsu Luokai Mechanical
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Jiangsu Luokai Mechanical can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Jiangsu Luokai Mechanical, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Jiangsu Luokai Mechanical 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 Jiangsu Luokai Mechanical can be done for the following purposes –
1. Strategic planning of Jiangsu Luokai Mechanical
2. Improving business portfolio management of Jiangsu Luokai Mechanical
3. Assessing feasibility of the new initiative in China
4. Making a Electronic Instr. & Controls sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Jiangsu Luokai Mechanical
Strengths of Jiangsu Luokai Mechanical | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Jiangsu Luokai Mechanical are -
Training and development
– Jiangsu Luokai Mechanical has one of the best training and development program in Technology 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.
Effective Research and Development (R&D)
– Jiangsu Luokai Mechanical has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Jiangsu Luokai Mechanical staying ahead in the Electronic Instr. & Controls industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Electronic Instr. & Controls
– Jiangsu Luokai Mechanical is one of the leading players in the Electronic Instr. & Controls industry in China. Over the years it has not only transformed the business landscape in the Electronic Instr. & Controls industry in China but also across the existing markets. The ability to lead change has enabled Jiangsu Luokai Mechanical in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Jiangsu Luokai Mechanical is one of the leading players in the Electronic Instr. & Controls 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.
Successful track record of launching new products
– Jiangsu Luokai Mechanical has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Jiangsu Luokai Mechanical 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.
Low bargaining power of suppliers
– Suppliers of Jiangsu Luokai Mechanical in the Technology sector have low bargaining power. Jiangsu Luokai Mechanical has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Jiangsu Luokai Mechanical to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Jiangsu Luokai Mechanical
– The covid-19 pandemic has put organizational resilience at the centre of everthing Jiangsu Luokai Mechanical does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Jiangsu Luokai Mechanical has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Jiangsu Luokai Mechanical to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Jiangsu Luokai Mechanical 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.
Digital Transformation in Electronic Instr. & Controls industry
- digital transformation varies from industry to industry. For Jiangsu Luokai Mechanical digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Jiangsu Luokai Mechanical 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.
Highly skilled collaborators
– Jiangsu Luokai Mechanical has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Electronic Instr. & Controls industry. Secondly the value chain collaborators of Jiangsu Luokai Mechanical have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Electronic Instr. & Controls industry
– Jiangsu Luokai Mechanical has clearly differentiated products in the market place. This has enabled Jiangsu Luokai Mechanical to fetch slight price premium compare to the competitors in the Electronic Instr. & Controls industry. The sustainable margins have also helped Jiangsu Luokai Mechanical to invest into research and development (R&D) and innovation.
Weaknesses of Jiangsu Luokai Mechanical | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Jiangsu Luokai Mechanical are -
Low market penetration in new markets
– Outside its home market of China, Jiangsu Luokai Mechanical needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Jiangsu Luokai Mechanical products
– To increase the profitability and margins on the products, Jiangsu Luokai Mechanical needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring in Electronic Instr. & Controls industry
– The stress on hiring functional specialists at Jiangsu Luokai Mechanical 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.
Aligning sales with marketing
– From the outside it seems that Jiangsu Luokai Mechanical needs to have more collaboration between its sales team and marketing team. Sales professionals in the Electronic Instr. & Controls industry have deep experience in developing customer relationships. Marketing department at Jiangsu Luokai Mechanical can leverage the sales team experience to cultivate customer relationships as Jiangsu Luokai Mechanical is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Jiangsu Luokai Mechanical has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Electronic Instr. & Controls industry over the last five years. Jiangsu Luokai Mechanical 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.
Increasing silos among functional specialists
– The organizational structure of Jiangsu Luokai Mechanical is dominated by functional specialists. It is not different from other players in the Electronic Instr. & Controls industry, but Jiangsu Luokai Mechanical needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Jiangsu Luokai Mechanical to focus more on services in the Electronic Instr. & Controls industry rather than just following the product oriented approach.
High bargaining power of channel partners in Electronic Instr. & Controls industry
– because of the regulatory requirements in China, Jiangsu Luokai Mechanical 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 Electronic Instr. & Controls industry.
High cash cycle compare to competitors
Jiangsu Luokai Mechanical has a high cash cycle compare to other players in the Electronic Instr. & Controls industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Need for greater diversity
– Jiangsu Luokai Mechanical 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 to strategic competitive environment developments
– As Jiangsu Luokai Mechanical is one of the leading players in the Electronic Instr. & Controls industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Electronic Instr. & Controls industry in last five years.
Workers concerns about automation
– As automation is fast increasing in the Electronic Instr. & Controls industry, Jiangsu Luokai Mechanical 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.
Jiangsu Luokai Mechanical Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Jiangsu Luokai Mechanical are -
Creating value in data economy
– The success of analytics program of Jiangsu Luokai Mechanical has opened avenues for new revenue streams for the organization in Electronic Instr. & Controls industry. This can help Jiangsu Luokai Mechanical to build a more holistic ecosystem for Jiangsu Luokai Mechanical products in the Electronic Instr. & Controls 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 Jiangsu Luokai Mechanical 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.
Manufacturing automation
– Jiangsu Luokai Mechanical can use the latest technology developments to improve its manufacturing and designing process in Electronic Instr. & Controls 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 Jiangsu Luokai Mechanical to increase its market reach. Jiangsu Luokai Mechanical 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Jiangsu Luokai Mechanical 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 Jiangsu Luokai Mechanical to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Jiangsu Luokai Mechanical in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Electronic Instr. & Controls industry, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at Jiangsu Luokai Mechanical 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 Electronic Instr. & Controls industry.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Jiangsu Luokai Mechanical can use these opportunities to build new business models that can help the communities that Jiangsu Luokai Mechanical operates in. Secondly it can use opportunities from government spending in Electronic Instr. & Controls sector.
Leveraging digital technologies
– Jiangsu Luokai Mechanical 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.
Buying journey improvements
– Jiangsu Luokai Mechanical can improve the customer journey of consumers in the Electronic Instr. & Controls industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Using analytics as competitive advantage
– Jiangsu Luokai Mechanical has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Electronic Instr. & Controls sector. This continuous investment in analytics has enabled Jiangsu Luokai Mechanical to build a competitive advantage using analytics. The analytics driven competitive advantage can help Jiangsu Luokai Mechanical to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Electronic Instr. & Controls industry, but it has also influenced the consumer preferences. Jiangsu Luokai Mechanical can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Jiangsu Luokai Mechanical can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Jiangsu Luokai Mechanical External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Jiangsu Luokai Mechanical are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Jiangsu Luokai Mechanical 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 Jiangsu Luokai Mechanical 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 Jiangsu Luokai Mechanical in the Electronic Instr. & Controls sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Jiangsu Luokai Mechanical is facing in Electronic Instr. & Controls sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Jiangsu Luokai Mechanical may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Electronic Instr. & Controls sector.
Consumer confidence and its impact on Jiangsu Luokai Mechanical 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 Electronic Instr. & Controls industry and other sectors.
Technology acceleration in Forth Industrial Revolution
– Jiangsu Luokai Mechanical has witnessed rapid integration of technology during Covid-19 in the Electronic Instr. & Controls industry. As one of the leading players in the industry, Jiangsu Luokai Mechanical needs to keep up with the evolution of technology in the Electronic Instr. & Controls 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 Jiangsu Luokai Mechanical in Electronic Instr. & Controls industry. The Electronic Instr. & Controls 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.
Increasing wage structure of Jiangsu Luokai Mechanical
– 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 Jiangsu Luokai Mechanical.
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.
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. Jiangsu Luokai Mechanical 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.
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. Jiangsu Luokai Mechanical needs to understand the core reasons impacting the Electronic Instr. & Controls industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Electronic Instr. & Controls industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Jiangsu Luokai Mechanical can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Electronic Instr. & Controls industry are lowering. It can presents Jiangsu Luokai Mechanical with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Electronic Instr. & Controls sector.
Weighted SWOT Analysis of Jiangsu Luokai Mechanical Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Jiangsu Luokai Mechanical 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 Jiangsu Luokai Mechanical 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 Jiangsu Luokai Mechanical 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 Jiangsu Luokai Mechanical 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 Jiangsu Luokai Mechanical needs to make to build a sustainable competitive advantage.