SWOT Analysis / TOWS Matrix for Nanjing Aolian Ae&Ea (China)
Based on various researches at Oak Spring University , Nanjing Aolian Ae&Ea is operating in a macro-environment that has been destablized by – there is backlash against globalization, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, wage bills are increasing, geopolitical disruptions,
technology disruption, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Nanjing Aolian Ae&Ea
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Nanjing Aolian Ae&Ea can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Nanjing Aolian Ae&Ea, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Nanjing Aolian Ae&Ea 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 Nanjing Aolian Ae&Ea can be done for the following purposes –
1. Strategic planning of Nanjing Aolian Ae&Ea
2. Improving business portfolio management of Nanjing Aolian Ae&Ea
3. Assessing feasibility of the new initiative in China
4. Making a Auto & Truck Parts sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Nanjing Aolian Ae&Ea
Strengths of Nanjing Aolian Ae&Ea | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Nanjing Aolian Ae&Ea are -
Low bargaining power of suppliers
– Suppliers of Nanjing Aolian Ae&Ea in the Consumer Cyclical sector have low bargaining power. Nanjing Aolian Ae&Ea has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Nanjing Aolian Ae&Ea to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Nanjing Aolian Ae&Ea has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Auto & Truck Parts industry. Secondly the value chain collaborators of Nanjing Aolian Ae&Ea have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Auto & Truck Parts industry
- digital transformation varies from industry to industry. For Nanjing Aolian Ae&Ea digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Nanjing Aolian Ae&Ea 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.
Analytics focus
– Nanjing Aolian Ae&Ea 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 Auto & Truck Parts 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.
Superior customer experience
– The customer experience strategy of Nanjing Aolian Ae&Ea in Auto & Truck Parts industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Nanjing Aolian Ae&Ea is one of the leading players in the Auto & Truck Parts 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.
High brand equity
– Nanjing Aolian Ae&Ea has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Nanjing Aolian Ae&Ea to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Nanjing Aolian Ae&Ea 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.
High switching costs
– The high switching costs that Nanjing Aolian Ae&Ea 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.
Effective Research and Development (R&D)
– Nanjing Aolian Ae&Ea has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Nanjing Aolian Ae&Ea staying ahead in the Auto & Truck Parts industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Nanjing Aolian Ae&Ea is present in almost all the verticals within the Auto & Truck Parts industry. This has provided Nanjing Aolian Ae&Ea 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.
Learning organization
- Nanjing Aolian Ae&Ea 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 Nanjing Aolian Ae&Ea is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Nanjing Aolian Ae&Ea emphasize – knowledge, initiative, and innovation.
Weaknesses of Nanjing Aolian Ae&Ea | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Nanjing Aolian Ae&Ea are -
Ability to respond to the competition
– As the decision making is very deliberative at Nanjing Aolian Ae&Ea, in the dynamic environment of Auto & Truck Parts industry it has struggled to respond to the nimble upstart competition. Nanjing Aolian Ae&Ea has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– From the outside it seems that Nanjing Aolian Ae&Ea needs to have more collaboration between its sales team and marketing team. Sales professionals in the Auto & Truck Parts industry have deep experience in developing customer relationships. Marketing department at Nanjing Aolian Ae&Ea can leverage the sales team experience to cultivate customer relationships as Nanjing Aolian Ae&Ea is planning to shift buying processes online.
Skills based hiring in Auto & Truck Parts industry
– The stress on hiring functional specialists at Nanjing Aolian Ae&Ea 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 to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Nanjing Aolian Ae&Ea is slow explore the new channels of communication. These new channels of communication can help Nanjing Aolian Ae&Ea to provide better information regarding Auto & Truck Parts products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Nanjing Aolian Ae&Ea 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.
High bargaining power of channel partners in Auto & Truck Parts industry
– because of the regulatory requirements in China, Nanjing Aolian Ae&Ea 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 Auto & Truck Parts industry.
Workers concerns about automation
– As automation is fast increasing in the Auto & Truck Parts industry, Nanjing Aolian Ae&Ea 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.
Increasing silos among functional specialists
– The organizational structure of Nanjing Aolian Ae&Ea is dominated by functional specialists. It is not different from other players in the Auto & Truck Parts industry, but Nanjing Aolian Ae&Ea needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Nanjing Aolian Ae&Ea to focus more on services in the Auto & Truck Parts industry rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Nanjing Aolian Ae&Ea is one of the leading players in the Auto & Truck Parts industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Auto & Truck Parts industry in last five years.
Products dominated business model
– Even though Nanjing Aolian Ae&Ea has some of the most successful models in the Auto & Truck Parts industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Nanjing Aolian Ae&Ea should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Nanjing Aolian Ae&Ea has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Auto & Truck Parts industry using digital technology.
Nanjing Aolian Ae&Ea Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Nanjing Aolian Ae&Ea are -
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. Nanjing Aolian Ae&Ea can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Nanjing Aolian Ae&Ea in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Auto & Truck Parts industry, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Nanjing Aolian Ae&Ea can use these opportunities to build new business models that can help the communities that Nanjing Aolian Ae&Ea operates in. Secondly it can use opportunities from government spending in Auto & Truck Parts sector.
Creating value in data economy
– The success of analytics program of Nanjing Aolian Ae&Ea has opened avenues for new revenue streams for the organization in Auto & Truck Parts industry. This can help Nanjing Aolian Ae&Ea to build a more holistic ecosystem for Nanjing Aolian Ae&Ea products in the Auto & Truck Parts industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Auto & Truck Parts industry, but it has also influenced the consumer preferences. Nanjing Aolian Ae&Ea can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Nanjing Aolian Ae&Ea can develop new processes and procedures in Auto & Truck Parts industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Building a culture of innovation
– managers at Nanjing Aolian Ae&Ea 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 Auto & Truck Parts industry.
Using analytics as competitive advantage
– Nanjing Aolian Ae&Ea has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Auto & Truck Parts sector. This continuous investment in analytics has enabled Nanjing Aolian Ae&Ea to build a competitive advantage using analytics. The analytics driven competitive advantage can help Nanjing Aolian Ae&Ea to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Nanjing Aolian Ae&Ea can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Nanjing Aolian Ae&Ea is facing challenges because of the dominance of functional experts in the organization. Nanjing Aolian Ae&Ea can utilize new technology in the field of Auto & Truck Parts industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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 Nanjing Aolian Ae&Ea 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.
Learning at scale
– Online learning technologies has now opened space for Nanjing Aolian Ae&Ea 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.
Loyalty marketing
– Nanjing Aolian Ae&Ea 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 Nanjing Aolian Ae&Ea External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Nanjing Aolian Ae&Ea are -
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.
High dependence on third party suppliers
– Nanjing Aolian Ae&Ea 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 Nanjing Aolian Ae&Ea
– 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 Nanjing Aolian Ae&Ea.
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 Nanjing Aolian Ae&Ea.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Nanjing Aolian Ae&Ea 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 Nanjing Aolian Ae&Ea prominent markets.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Nanjing Aolian Ae&Ea in Auto & Truck Parts industry. The Auto & Truck Parts 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.
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.
Technology acceleration in Forth Industrial Revolution
– Nanjing Aolian Ae&Ea has witnessed rapid integration of technology during Covid-19 in the Auto & Truck Parts industry. As one of the leading players in the industry, Nanjing Aolian Ae&Ea needs to keep up with the evolution of technology in the Auto & Truck Parts 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.
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. Nanjing Aolian Ae&Ea 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. Nanjing Aolian Ae&Ea needs to understand the core reasons impacting the Auto & Truck Parts industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Nanjing Aolian Ae&Ea may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Auto & Truck Parts sector.
Consumer confidence and its impact on Nanjing Aolian Ae&Ea 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 Auto & Truck Parts industry and other sectors.
Environmental challenges
– Nanjing Aolian Ae&Ea 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. Nanjing Aolian Ae&Ea can take advantage of this fund but it will also bring new competitors in the Auto & Truck Parts industry.
Weighted SWOT Analysis of Nanjing Aolian Ae&Ea Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Nanjing Aolian Ae&Ea 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 Nanjing Aolian Ae&Ea 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 Nanjing Aolian Ae&Ea 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 Nanjing Aolian Ae&Ea 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 Nanjing Aolian Ae&Ea needs to make to build a sustainable competitive advantage.