Based on various researches at Oak Spring University , Guangdong SACA Precision Manufacturing is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, technology disruption, central banks are concerned over increasing inflation, there is backlash against globalization, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, etc
Introduction to SWOT Analysis of Guangdong SACA Precision Manufacturing
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Guangdong SACA Precision Manufacturing can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Guangdong SACA Precision Manufacturing, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Guangdong SACA Precision Manufacturing 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 Guangdong SACA Precision Manufacturing can be done for the following purposes –
1. Strategic planning of Guangdong SACA Precision Manufacturing
2. Improving business portfolio management of Guangdong SACA Precision Manufacturing
3. Assessing feasibility of the new initiative in China
4. Making a Personal & Household Prods. sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Guangdong SACA Precision Manufacturing
Strengths of Guangdong SACA Precision Manufacturing | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Guangdong SACA Precision Manufacturing are -
Digital Transformation in Personal & Household Prods. industry
- digital transformation varies from industry to industry. For Guangdong SACA Precision Manufacturing digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Guangdong SACA Precision Manufacturing 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.
Effective Research and Development (R&D)
– Guangdong SACA Precision Manufacturing has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Guangdong SACA Precision Manufacturing staying ahead in the Personal & Household Prods. industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Guangdong SACA Precision Manufacturing 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 Personal & Household Prods. 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.
Training and development
– Guangdong SACA Precision Manufacturing has one of the best training and development program in Consumer/Non-Cyclical 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.
High switching costs
– The high switching costs that Guangdong SACA Precision Manufacturing has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Operational resilience
– The operational resilience strategy of Guangdong SACA Precision Manufacturing comprises – understanding the underlying the factors in the Personal & Household Prods. industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
High brand equity
– Guangdong SACA Precision Manufacturing has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Guangdong SACA Precision Manufacturing to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Guangdong SACA Precision Manufacturing is one of the leading players in the Personal & Household Prods. 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.
Sustainable margins compare to other players in Personal & Household Prods. industry
– Guangdong SACA Precision Manufacturing has clearly differentiated products in the market place. This has enabled Guangdong SACA Precision Manufacturing to fetch slight price premium compare to the competitors in the Personal & Household Prods. industry. The sustainable margins have also helped Guangdong SACA Precision Manufacturing to invest into research and development (R&D) and innovation.
Learning organization
- Guangdong SACA Precision Manufacturing 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 Guangdong SACA Precision Manufacturing is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Guangdong SACA Precision Manufacturing emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Guangdong SACA Precision Manufacturing is present in almost all the verticals within the Personal & Household Prods. industry. This has provided Guangdong SACA Precision Manufacturing 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 Personal & Household Prods.
– Guangdong SACA Precision Manufacturing is one of the leading players in the Personal & Household Prods. industry in China. Over the years it has not only transformed the business landscape in the Personal & Household Prods. industry in China but also across the existing markets. The ability to lead change has enabled Guangdong SACA Precision Manufacturing in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses of Guangdong SACA Precision Manufacturing | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Guangdong SACA Precision Manufacturing are -
Slow decision making process
– As mentioned earlier in the report, Guangdong SACA Precision Manufacturing has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Personal & Household Prods. industry over the last five years. Guangdong SACA Precision Manufacturing 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.
Capital Spending Reduction
– Even during the low interest decade, Guangdong SACA Precision Manufacturing 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 Personal & Household Prods. industry using digital technology.
Need for greater diversity
– Guangdong SACA Precision Manufacturing 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.
No frontier risks strategy
– From the 10K / annual statement of Guangdong SACA Precision Manufacturing, it seems that company is thinking out the frontier risks that can impact Personal & Household Prods. 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.
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 Guangdong SACA Precision Manufacturing supply chain. Even after few cautionary changes, Guangdong SACA Precision Manufacturing is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Guangdong SACA Precision Manufacturing vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners in Personal & Household Prods. industry
– because of the regulatory requirements in China, Guangdong SACA Precision Manufacturing 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 Personal & Household Prods. industry.
High operating costs
– Compare to the competitors, Guangdong SACA Precision Manufacturing has high operating costs in the Personal & Household Prods. industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Guangdong SACA Precision Manufacturing lucrative customers.
Skills based hiring in Personal & Household Prods. industry
– The stress on hiring functional specialists at Guangdong SACA Precision Manufacturing 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.
Low market penetration in new markets
– Outside its home market of China, Guangdong SACA Precision Manufacturing needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Guangdong SACA Precision Manufacturing is dominated by functional specialists. It is not different from other players in the Personal & Household Prods. industry, but Guangdong SACA Precision Manufacturing needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Guangdong SACA Precision Manufacturing to focus more on services in the Personal & Household Prods. industry rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative at Guangdong SACA Precision Manufacturing, in the dynamic environment of Personal & Household Prods. industry it has struggled to respond to the nimble upstart competition. Guangdong SACA Precision Manufacturing has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Guangdong SACA Precision Manufacturing Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Guangdong SACA Precision Manufacturing are -
Creating value in data economy
– The success of analytics program of Guangdong SACA Precision Manufacturing has opened avenues for new revenue streams for the organization in Personal & Household Prods. industry. This can help Guangdong SACA Precision Manufacturing to build a more holistic ecosystem for Guangdong SACA Precision Manufacturing products in the Personal & Household Prods. industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Guangdong SACA Precision Manufacturing 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 Guangdong SACA Precision Manufacturing to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Personal & Household Prods. industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Guangdong SACA Precision Manufacturing 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. Guangdong SACA Precision Manufacturing 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.
Loyalty marketing
– Guangdong SACA Precision Manufacturing 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Guangdong SACA Precision Manufacturing 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 Guangdong SACA Precision Manufacturing to hire the very best people irrespective of their geographical location.
Use of Bitcoin and other crypto currencies for transactions in Personal & Household Prods. industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Guangdong SACA Precision Manufacturing in the Personal & Household Prods. industry. Now Guangdong SACA Precision Manufacturing can target international markets with far fewer capital restrictions requirements than the existing system.
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. Guangdong SACA Precision Manufacturing can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Guangdong SACA Precision Manufacturing can improve the customer journey of consumers in the Personal & Household Prods. 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.
Learning at scale
– Online learning technologies has now opened space for Guangdong SACA Precision Manufacturing 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Guangdong SACA Precision Manufacturing can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Guangdong SACA Precision Manufacturing is facing challenges because of the dominance of functional experts in the organization. Guangdong SACA Precision Manufacturing can utilize new technology in the field of Personal & Household Prods. industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Developing new processes and practices
– Guangdong SACA Precision Manufacturing can develop new processes and procedures in Personal & Household Prods. 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.
Using analytics as competitive advantage
– Guangdong SACA Precision Manufacturing has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Personal & Household Prods. sector. This continuous investment in analytics has enabled Guangdong SACA Precision Manufacturing to build a competitive advantage using analytics. The analytics driven competitive advantage can help Guangdong SACA Precision Manufacturing to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Guangdong SACA Precision Manufacturing External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Guangdong SACA Precision Manufacturing are -
Regulatory challenges
– Guangdong SACA Precision Manufacturing 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 Personal & Household Prods. industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Guangdong SACA Precision Manufacturing in Personal & Household Prods. industry. The Personal & Household Prods. 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.
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. Guangdong SACA Precision Manufacturing needs to understand the core reasons impacting the Personal & Household Prods. industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Guangdong SACA Precision Manufacturing is facing in Personal & Household Prods. 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 Personal & Household Prods. industry are lowering. It can presents Guangdong SACA Precision Manufacturing with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Personal & Household Prods. sector.
Easy access to finance
– Easy access to finance in Personal & Household Prods. industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Guangdong SACA Precision Manufacturing can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Guangdong SACA Precision Manufacturing 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 Guangdong SACA Precision Manufacturing prominent markets.
High dependence on third party suppliers
– Guangdong SACA Precision Manufacturing 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.
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 Guangdong SACA Precision Manufacturing.
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 Guangdong SACA Precision Manufacturing in the Personal & Household Prods. sector and impact the bottomline of the organization.
Consumer confidence and its impact on Guangdong SACA Precision Manufacturing 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 Personal & Household Prods. industry and other sectors.
Environmental challenges
– Guangdong SACA Precision Manufacturing 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. Guangdong SACA Precision Manufacturing can take advantage of this fund but it will also bring new competitors in the Personal & Household Prods. industry.
Increasing wage structure of Guangdong SACA Precision Manufacturing
– 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 Guangdong SACA Precision Manufacturing.
Weighted SWOT Analysis of Guangdong SACA Precision Manufacturing Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Guangdong SACA Precision Manufacturing 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 Guangdong SACA Precision Manufacturing 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 Guangdong SACA Precision Manufacturing 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 Guangdong SACA Precision Manufacturing 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 Guangdong SACA Precision Manufacturing needs to make to build a sustainable competitive advantage.