Sinomach General Tech (600444) SWOT Analysis / TOWS Matrix / MBA Resources
Fabricated Plastic & Rubber
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Sinomach General Tech (China)
Based on various researches at Oak Spring University , Sinomach General Tech is operating in a macro-environment that has been destablized by – digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, there is increasing trade war between United States & China, technology disruption, there is backlash against globalization, increasing transportation and logistics costs, wage bills are increasing,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Sinomach General Tech
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Sinomach General Tech can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sinomach General Tech, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sinomach General Tech 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 Sinomach General Tech can be done for the following purposes –
1. Strategic planning of Sinomach General Tech
2. Improving business portfolio management of Sinomach General Tech
3. Assessing feasibility of the new initiative in China
4. Making a Fabricated Plastic & Rubber sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sinomach General Tech
Strengths of Sinomach General Tech | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sinomach General Tech are -
High switching costs
– The high switching costs that Sinomach General Tech 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.
Sustainable margins compare to other players in Fabricated Plastic & Rubber industry
– Sinomach General Tech has clearly differentiated products in the market place. This has enabled Sinomach General Tech to fetch slight price premium compare to the competitors in the Fabricated Plastic & Rubber industry. The sustainable margins have also helped Sinomach General Tech to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Sinomach General Tech has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Fabricated Plastic & Rubber industry. Secondly the value chain collaborators of Sinomach General Tech have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Sinomach General Tech 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 Fabricated Plastic & Rubber 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.
Innovation driven organization
– Sinomach General Tech is one of the most innovative firm in Fabricated Plastic & Rubber sector.
Ability to lead change in Fabricated Plastic & Rubber
– Sinomach General Tech is one of the leading players in the Fabricated Plastic & Rubber industry in China. Over the years it has not only transformed the business landscape in the Fabricated Plastic & Rubber industry in China but also across the existing markets. The ability to lead change has enabled Sinomach General Tech in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Sinomach General Tech has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sinomach General Tech 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.
Training and development
– Sinomach General Tech 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.
Superior customer experience
– The customer experience strategy of Sinomach General Tech in Fabricated Plastic & Rubber industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Sinomach General Tech
– The covid-19 pandemic has put organizational resilience at the centre of everthing Sinomach General Tech does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy of Sinomach General Tech comprises – understanding the underlying the factors in the Fabricated Plastic & Rubber 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.
Ability to recruit top talent
– Sinomach General Tech is one of the leading players in the Fabricated Plastic & Rubber 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 Sinomach General Tech | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sinomach General Tech are -
Interest costs
– Compare to the competition, Sinomach General Tech 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.
Compensation and incentives
– The revenue per employee of Sinomach General Tech is just above the Fabricated Plastic & Rubber 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.
High bargaining power of channel partners in Fabricated Plastic & Rubber industry
– because of the regulatory requirements in China, Sinomach General Tech 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 Fabricated Plastic & Rubber industry.
Products dominated business model
– Even though Sinomach General Tech has some of the most successful models in the Fabricated Plastic & Rubber industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Sinomach General Tech should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Sinomach General Tech has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Slow to strategic competitive environment developments
– As Sinomach General Tech is one of the leading players in the Fabricated Plastic & Rubber industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Fabricated Plastic & Rubber industry in last five years.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Sinomach General Tech is slow explore the new channels of communication. These new channels of communication can help Sinomach General Tech to provide better information regarding Fabricated Plastic & Rubber products and services. It can also build an online community to further reach out to potential customers.
Employees’ less understanding of Sinomach General Tech strategy
– From the outside it seems that the employees of Sinomach General Tech 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.
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 Sinomach General Tech supply chain. Even after few cautionary changes, Sinomach General Tech is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sinomach General Tech vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Sinomach General Tech products
– To increase the profitability and margins on the products, Sinomach General Tech needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– From the outside it seems that Sinomach General Tech needs to have more collaboration between its sales team and marketing team. Sales professionals in the Fabricated Plastic & Rubber industry have deep experience in developing customer relationships. Marketing department at Sinomach General Tech can leverage the sales team experience to cultivate customer relationships as Sinomach General Tech is planning to shift buying processes online.
Sinomach General Tech Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Sinomach General Tech are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sinomach General Tech can use these opportunities to build new business models that can help the communities that Sinomach General Tech operates in. Secondly it can use opportunities from government spending in Fabricated Plastic & Rubber sector.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Fabricated Plastic & Rubber industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Sinomach General Tech 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. Sinomach General Tech 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Sinomach General Tech 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 Sinomach General Tech to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Sinomach General Tech 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 Fabricated Plastic & Rubber industry.
Creating value in data economy
– The success of analytics program of Sinomach General Tech has opened avenues for new revenue streams for the organization in Fabricated Plastic & Rubber industry. This can help Sinomach General Tech to build a more holistic ecosystem for Sinomach General Tech products in the Fabricated Plastic & Rubber industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Sinomach General Tech 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Sinomach General Tech 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.
Developing new processes and practices
– Sinomach General Tech can develop new processes and procedures in Fabricated Plastic & Rubber 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 Sinomach General Tech 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 Sinomach General Tech to hire the very best people irrespective of their geographical location.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Fabricated Plastic & Rubber industry, but it has also influenced the consumer preferences. Sinomach General Tech can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Sinomach General Tech to increase its market reach. Sinomach General Tech will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Sinomach General Tech can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Sinomach General Tech 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.
Threats Sinomach General Tech External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Sinomach General Tech are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Sinomach General Tech may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Fabricated Plastic & Rubber sector.
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.
Stagnating economy with rate increase
– Sinomach General Tech 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 Fabricated Plastic & Rubber industry.
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. Sinomach General Tech 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Fabricated Plastic & Rubber industry are lowering. It can presents Sinomach General Tech with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Fabricated Plastic & Rubber sector.
Consumer confidence and its impact on Sinomach General Tech 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 Fabricated Plastic & Rubber industry and other sectors.
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 Sinomach General Tech business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Sinomach General Tech 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. Sinomach General Tech can take advantage of this fund but it will also bring new competitors in the Fabricated Plastic & Rubber industry.
Increasing wage structure of Sinomach General Tech
– 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 Sinomach General Tech.
Shortening product life cycle
– it is one of the major threat that Sinomach General Tech is facing in Fabricated Plastic & Rubber sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sinomach General Tech in Fabricated Plastic & Rubber industry. The Fabricated Plastic & Rubber 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 dependence on third party suppliers
– Sinomach General Tech 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.
Weighted SWOT Analysis of Sinomach General Tech Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Sinomach General Tech 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 Sinomach General Tech 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 Sinomach General Tech 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 Sinomach General Tech 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 Sinomach General Tech needs to make to build a sustainable competitive advantage.
