Zhenghong Tech A (702) SWOT Analysis / TOWS Matrix / MBA Resources
Food Processing
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Zhenghong Tech A (China)
Based on various researches at Oak Spring University , Zhenghong Tech A is operating in a macro-environment that has been destablized by – wage bills are increasing, technology disruption, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, customer relationship management is fast transforming because of increasing concerns over data privacy,
geopolitical disruptions, increasing household debt because of falling income levels, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Zhenghong Tech A can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Zhenghong Tech A, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Zhenghong Tech A 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 Zhenghong Tech A can be done for the following purposes –
1. Strategic planning of Zhenghong Tech A
2. Improving business portfolio management of Zhenghong Tech A
3. Assessing feasibility of the new initiative in China
4. Making a Food Processing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Zhenghong Tech A
Strengths of Zhenghong Tech A | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Zhenghong Tech A are -
Operational resilience
– The operational resilience strategy of Zhenghong Tech A comprises – understanding the underlying the factors in the Food Processing 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.
Superior customer experience
– The customer experience strategy of Zhenghong Tech A in Food Processing industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Zhenghong Tech A 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 Zhenghong Tech A is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Zhenghong Tech A emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Zhenghong Tech A
– The covid-19 pandemic has put organizational resilience at the centre of everthing Zhenghong Tech A does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Zhenghong Tech A 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.
Diverse revenue streams
– Zhenghong Tech A is present in almost all the verticals within the Food Processing industry. This has provided Zhenghong Tech A 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.
Successful track record of launching new products
– Zhenghong Tech A has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Zhenghong Tech A 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.
Sustainable margins compare to other players in Food Processing industry
– Zhenghong Tech A has clearly differentiated products in the market place. This has enabled Zhenghong Tech A to fetch slight price premium compare to the competitors in the Food Processing industry. The sustainable margins have also helped Zhenghong Tech A to invest into research and development (R&D) and innovation.
Training and development
– Zhenghong Tech A 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.
Low bargaining power of suppliers
– Suppliers of Zhenghong Tech A in the Consumer/Non-Cyclical sector have low bargaining power. Zhenghong Tech A has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Zhenghong Tech A to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Zhenghong Tech A has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Zhenghong Tech A to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Zhenghong Tech A 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 Food Processing 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.
Weaknesses of Zhenghong Tech A | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Zhenghong Tech A are -
Slow to strategic competitive environment developments
– As Zhenghong Tech A is one of the leading players in the Food Processing industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Food Processing industry in last five years.
Workers concerns about automation
– As automation is fast increasing in the Food Processing industry, Zhenghong Tech A 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.
Skills based hiring in Food Processing industry
– The stress on hiring functional specialists at Zhenghong Tech A 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.
High dependence on Zhenghong Tech A ‘s star products
– The top 2 products and services of Zhenghong Tech A still accounts for major business revenue. This dependence on star products in Food Processing industry has resulted into insufficient focus on developing new products, even though Zhenghong Tech A has relatively successful track record of launching new products.
Aligning sales with marketing
– From the outside it seems that Zhenghong Tech A needs to have more collaboration between its sales team and marketing team. Sales professionals in the Food Processing industry have deep experience in developing customer relationships. Marketing department at Zhenghong Tech A can leverage the sales team experience to cultivate customer relationships as Zhenghong Tech A is planning to shift buying processes online.
Products dominated business model
– Even though Zhenghong Tech A has some of the most successful models in the Food Processing industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Zhenghong Tech A should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Zhenghong Tech A products
– To increase the profitability and margins on the products, Zhenghong Tech A needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ less understanding of Zhenghong Tech A strategy
– From the outside it seems that the employees of Zhenghong Tech A don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Increasing silos among functional specialists
– The organizational structure of Zhenghong Tech A is dominated by functional specialists. It is not different from other players in the Food Processing industry, but Zhenghong Tech A needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Zhenghong Tech A to focus more on services in the Food Processing industry rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Zhenghong Tech A is slow explore the new channels of communication. These new channels of communication can help Zhenghong Tech A to provide better information regarding Food Processing products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee of Zhenghong Tech A is just above the Food Processing industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Zhenghong Tech A Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Zhenghong Tech A 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. Zhenghong Tech A can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Zhenghong Tech A can develop new processes and procedures in Food Processing 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Zhenghong Tech A 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 Zhenghong Tech A to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Zhenghong Tech A has opened avenues for new revenue streams for the organization in Food Processing industry. This can help Zhenghong Tech A to build a more holistic ecosystem for Zhenghong Tech A products in the Food Processing industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Zhenghong Tech A can improve the customer journey of consumers in the Food Processing 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.
Loyalty marketing
– Zhenghong Tech A 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Zhenghong Tech A is facing challenges because of the dominance of functional experts in the organization. Zhenghong Tech A can utilize new technology in the field of Food Processing industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Zhenghong Tech A 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Zhenghong Tech A can use these opportunities to build new business models that can help the communities that Zhenghong Tech A operates in. Secondly it can use opportunities from government spending in Food Processing sector.
Leveraging digital technologies
– Zhenghong Tech A can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Learning at scale
– Online learning technologies has now opened space for Zhenghong Tech A 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.
Using analytics as competitive advantage
– Zhenghong Tech A has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Food Processing sector. This continuous investment in analytics has enabled Zhenghong Tech A to build a competitive advantage using analytics. The analytics driven competitive advantage can help Zhenghong Tech A to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Zhenghong Tech A 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.
Threats Zhenghong Tech A External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Zhenghong Tech A are -
Environmental challenges
– Zhenghong Tech A 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. Zhenghong Tech A can take advantage of this fund but it will also bring new competitors in the Food Processing industry.
Consumer confidence and its impact on Zhenghong Tech A 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 Food Processing industry and other sectors.
Easy access to finance
– Easy access to finance in Food Processing industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Zhenghong Tech A can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Zhenghong Tech A may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Food Processing sector.
Increasing wage structure of Zhenghong Tech A
– 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 Zhenghong Tech A.
Regulatory challenges
– Zhenghong Tech A 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 Food Processing industry regulations.
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.
High dependence on third party suppliers
– Zhenghong Tech A 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.
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 Zhenghong Tech A in the Food Processing sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Zhenghong Tech A can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the Food Processing industry.
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 Zhenghong Tech A.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Zhenghong Tech A 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 Zhenghong Tech A prominent markets.
Technology acceleration in Forth Industrial Revolution
– Zhenghong Tech A has witnessed rapid integration of technology during Covid-19 in the Food Processing industry. As one of the leading players in the industry, Zhenghong Tech A needs to keep up with the evolution of technology in the Food Processing 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 Zhenghong Tech A Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Zhenghong Tech A 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 Zhenghong Tech A 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 Zhenghong Tech A 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 Zhenghong Tech A 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 Zhenghong Tech A needs to make to build a sustainable competitive advantage.