Baoding Heavy Industry Co Ltd (2552) SWOT Analysis / TOWS Matrix / MBA Resources
Misc. Fabricated Products
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Baoding Heavy Industry Co Ltd (China)
Based on various researches at Oak Spring University , Baoding Heavy Industry Co Ltd is operating in a macro-environment that has been destablized by – geopolitical disruptions, cloud computing is disrupting traditional business models, there is backlash against globalization, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, increasing commodity prices,
competitive advantages are harder to sustain because of technology dispersion, technology disruption, etc
Introduction to SWOT Analysis of Baoding Heavy Industry Co Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Baoding Heavy Industry Co Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Baoding Heavy Industry Co Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Baoding Heavy Industry Co Ltd 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 Baoding Heavy Industry Co Ltd can be done for the following purposes –
1. Strategic planning of Baoding Heavy Industry Co Ltd
2. Improving business portfolio management of Baoding Heavy Industry Co Ltd
3. Assessing feasibility of the new initiative in China
4. Making a Misc. Fabricated Products sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Baoding Heavy Industry Co Ltd
Strengths of Baoding Heavy Industry Co Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Baoding Heavy Industry Co Ltd are -
Low bargaining power of suppliers
– Suppliers of Baoding Heavy Industry Co Ltd in the Basic Materials sector have low bargaining power. Baoding Heavy Industry Co Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Baoding Heavy Industry Co Ltd to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Baoding Heavy Industry Co Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Baoding Heavy Industry Co Ltd 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.
Analytics focus
– Baoding Heavy Industry Co Ltd is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the Misc. Fabricated Products 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.
Learning organization
- Baoding Heavy Industry Co Ltd 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 Baoding Heavy Industry Co Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Baoding Heavy Industry Co Ltd emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Baoding Heavy Industry Co Ltd in Misc. Fabricated Products industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Baoding Heavy Industry Co Ltd has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Misc. Fabricated Products industry. Secondly the value chain collaborators of Baoding Heavy Industry Co Ltd have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Baoding Heavy Industry Co Ltd 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.
Organizational Resilience of Baoding Heavy Industry Co Ltd
– The covid-19 pandemic has put organizational resilience at the centre of everthing Baoding Heavy Industry Co Ltd 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 Baoding Heavy Industry Co Ltd 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.
Ability to lead change in Misc. Fabricated Products
– Baoding Heavy Industry Co Ltd is one of the leading players in the Misc. Fabricated Products industry in China. Over the years it has not only transformed the business landscape in the Misc. Fabricated Products industry in China but also across the existing markets. The ability to lead change has enabled Baoding Heavy Industry Co Ltd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Baoding Heavy Industry Co Ltd has one of the best training and development program in Basic Materials industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to recruit top talent
– Baoding Heavy Industry Co Ltd is one of the leading players in the Misc. Fabricated Products 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.
Weaknesses of Baoding Heavy Industry Co Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Baoding Heavy Industry Co Ltd are -
Lack of clear differentiation of Baoding Heavy Industry Co Ltd products
– To increase the profitability and margins on the products, Baoding Heavy Industry Co Ltd needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Baoding Heavy Industry Co Ltd 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.
Aligning sales with marketing
– From the outside it seems that Baoding Heavy Industry Co Ltd needs to have more collaboration between its sales team and marketing team. Sales professionals in the Misc. Fabricated Products industry have deep experience in developing customer relationships. Marketing department at Baoding Heavy Industry Co Ltd can leverage the sales team experience to cultivate customer relationships as Baoding Heavy Industry Co Ltd is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Baoding Heavy Industry Co Ltd is slow explore the new channels of communication. These new channels of communication can help Baoding Heavy Industry Co Ltd to provide better information regarding Misc. Fabricated Products products and services. It can also build an online community to further reach out to potential customers.
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 Baoding Heavy Industry Co Ltd supply chain. Even after few cautionary changes, Baoding Heavy Industry Co Ltd is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Baoding Heavy Industry Co Ltd vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Baoding Heavy Industry Co Ltd has some of the most successful models in the Misc. Fabricated Products industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Baoding Heavy Industry Co Ltd should strive to include more intangible value offerings along with its core products and services.
High dependence on Baoding Heavy Industry Co Ltd ‘s star products
– The top 2 products and services of Baoding Heavy Industry Co Ltd still accounts for major business revenue. This dependence on star products in Misc. Fabricated Products industry has resulted into insufficient focus on developing new products, even though Baoding Heavy Industry Co Ltd has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Baoding Heavy Industry Co Ltd has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Capital Spending Reduction
– Even during the low interest decade, Baoding Heavy Industry Co Ltd 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 Misc. Fabricated Products industry using digital technology.
Workers concerns about automation
– As automation is fast increasing in the Misc. Fabricated Products industry, Baoding Heavy Industry Co Ltd 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.
No frontier risks strategy
– From the 10K / annual statement of Baoding Heavy Industry Co Ltd, it seems that company is thinking out the frontier risks that can impact Misc. Fabricated Products 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.
Baoding Heavy Industry Co Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Baoding Heavy Industry Co Ltd are -
Use of Bitcoin and other crypto currencies for transactions in Misc. Fabricated Products industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Baoding Heavy Industry Co Ltd in the Misc. Fabricated Products industry. Now Baoding Heavy Industry Co Ltd can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Baoding Heavy Industry Co Ltd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Misc. Fabricated Products sector. This continuous investment in analytics has enabled Baoding Heavy Industry Co Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help Baoding Heavy Industry Co Ltd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Baoding Heavy Industry Co Ltd is facing challenges because of the dominance of functional experts in the organization. Baoding Heavy Industry Co Ltd can utilize new technology in the field of Misc. Fabricated Products industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Misc. Fabricated Products industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Baoding Heavy Industry Co Ltd 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. Baoding Heavy Industry Co Ltd 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.
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. Baoding Heavy Industry Co Ltd can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Baoding Heavy Industry Co Ltd 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.
Building a culture of innovation
– managers at Baoding Heavy Industry Co Ltd 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 Misc. Fabricated Products industry.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Baoding Heavy Industry Co Ltd can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Baoding Heavy Industry Co Ltd 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.
Developing new processes and practices
– Baoding Heavy Industry Co Ltd can develop new processes and procedures in Misc. Fabricated Products 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.
Manufacturing automation
– Baoding Heavy Industry Co Ltd can use the latest technology developments to improve its manufacturing and designing process in Misc. Fabricated Products 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Baoding Heavy Industry Co Ltd 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 Baoding Heavy Industry Co Ltd to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Baoding Heavy Industry Co Ltd in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Misc. Fabricated Products industry, and it will provide faster access to the consumers.
Threats Baoding Heavy Industry Co Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Baoding Heavy Industry Co Ltd are -
Shortening product life cycle
– it is one of the major threat that Baoding Heavy Industry Co Ltd is facing in Misc. Fabricated Products sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Baoding Heavy Industry Co Ltd has witnessed rapid integration of technology during Covid-19 in the Misc. Fabricated Products industry. As one of the leading players in the industry, Baoding Heavy Industry Co Ltd needs to keep up with the evolution of technology in the Misc. Fabricated Products 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Baoding Heavy Industry Co Ltd 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 Baoding Heavy Industry Co Ltd prominent markets.
High dependence on third party suppliers
– Baoding Heavy Industry Co Ltd 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Baoding Heavy Industry Co Ltd in Misc. Fabricated Products industry. The Misc. Fabricated Products industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Baoding Heavy Industry Co Ltd 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.
Stagnating economy with rate increase
– Baoding Heavy Industry Co Ltd 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 Misc. Fabricated Products industry.
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.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Baoding Heavy Industry Co Ltd business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Baoding Heavy Industry Co Ltd
– 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 Baoding Heavy Industry Co Ltd.
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. Baoding Heavy Industry Co Ltd needs to understand the core reasons impacting the Misc. Fabricated Products industry. This will help it in building a better workplace.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Misc. Fabricated Products industry are lowering. It can presents Baoding Heavy Industry Co Ltd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Misc. Fabricated Products sector.
Weighted SWOT Analysis of Baoding Heavy Industry Co Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Baoding Heavy Industry Co Ltd 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 Baoding Heavy Industry Co Ltd 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 Baoding Heavy Industry Co Ltd 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 Baoding Heavy Industry Co Ltd 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 Baoding Heavy Industry Co Ltd needs to make to build a sustainable competitive advantage.