Based on various researches at Oak Spring University , Anhui ANLI Artificial Leather is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, increasing commodity prices, supply chains are disrupted by pandemic , technology disruption,
there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Anhui ANLI Artificial Leather
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Anhui ANLI Artificial Leather can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Anhui ANLI Artificial Leather, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Anhui ANLI Artificial Leather 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 Anhui ANLI Artificial Leather can be done for the following purposes –
1. Strategic planning of Anhui ANLI Artificial Leather
2. Improving business portfolio management of Anhui ANLI Artificial Leather
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 Anhui ANLI Artificial Leather
Strengths of Anhui ANLI Artificial Leather | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Anhui ANLI Artificial Leather are -
Strong track record of project management in the Fabricated Plastic & Rubber industry
– Anhui ANLI Artificial Leather is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Anhui ANLI Artificial Leather has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Anhui ANLI Artificial Leather staying ahead in the Fabricated Plastic & Rubber industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Anhui ANLI Artificial Leather has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Anhui ANLI Artificial Leather to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Anhui ANLI Artificial Leather 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 Anhui ANLI Artificial Leather have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Anhui ANLI Artificial Leather 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 Anhui ANLI Artificial Leather in Fabricated Plastic & Rubber industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Fabricated Plastic & Rubber industry
- digital transformation varies from industry to industry. For Anhui ANLI Artificial Leather digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Anhui ANLI Artificial Leather 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.
Successful track record of launching new products
– Anhui ANLI Artificial Leather has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Anhui ANLI Artificial Leather 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.
Diverse revenue streams
– Anhui ANLI Artificial Leather is present in almost all the verticals within the Fabricated Plastic & Rubber industry. This has provided Anhui ANLI Artificial Leather 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.
Innovation driven organization
– Anhui ANLI Artificial Leather is one of the most innovative firm in Fabricated Plastic & Rubber sector.
Analytics focus
– Anhui ANLI Artificial Leather 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.
Low bargaining power of suppliers
– Suppliers of Anhui ANLI Artificial Leather in the Basic Materials sector have low bargaining power. Anhui ANLI Artificial Leather has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Anhui ANLI Artificial Leather to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses of Anhui ANLI Artificial Leather | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Anhui ANLI Artificial Leather are -
Low market penetration in new markets
– Outside its home market of China, Anhui ANLI Artificial Leather needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– From the outside it seems that Anhui ANLI Artificial Leather 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 Anhui ANLI Artificial Leather can leverage the sales team experience to cultivate customer relationships as Anhui ANLI Artificial Leather is planning to shift buying processes online.
High operating costs
– Compare to the competitors, Anhui ANLI Artificial Leather has high operating costs in the Fabricated Plastic & Rubber industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Anhui ANLI Artificial Leather lucrative customers.
Compensation and incentives
– The revenue per employee of Anhui ANLI Artificial Leather 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 dependence on Anhui ANLI Artificial Leather ‘s star products
– The top 2 products and services of Anhui ANLI Artificial Leather still accounts for major business revenue. This dependence on star products in Fabricated Plastic & Rubber industry has resulted into insufficient focus on developing new products, even though Anhui ANLI Artificial Leather has relatively successful track record of launching new products.
Skills based hiring in Fabricated Plastic & Rubber industry
– The stress on hiring functional specialists at Anhui ANLI Artificial Leather 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.
No frontier risks strategy
– From the 10K / annual statement of Anhui ANLI Artificial Leather, it seems that company is thinking out the frontier risks that can impact Fabricated Plastic & Rubber 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.
Interest costs
– Compare to the competition, Anhui ANLI Artificial Leather 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.
Employees’ less understanding of Anhui ANLI Artificial Leather strategy
– From the outside it seems that the employees of Anhui ANLI Artificial Leather 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.
Lack of clear differentiation of Anhui ANLI Artificial Leather products
– To increase the profitability and margins on the products, Anhui ANLI Artificial Leather needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Anhui ANLI Artificial Leather 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. Anhui ANLI Artificial Leather should strive to include more intangible value offerings along with its core products and services.
Anhui ANLI Artificial Leather Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Anhui ANLI Artificial Leather are -
Leveraging digital technologies
– Anhui ANLI Artificial Leather 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.
Building a culture of innovation
– managers at Anhui ANLI Artificial Leather 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Anhui ANLI Artificial Leather 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 Anhui ANLI Artificial Leather to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Anhui ANLI Artificial Leather in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Fabricated Plastic & Rubber industry, and it will provide faster access to the consumers.
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 Anhui ANLI Artificial Leather 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Anhui ANLI Artificial Leather can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Anhui ANLI Artificial Leather 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. Anhui ANLI Artificial Leather 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Anhui ANLI Artificial Leather is facing challenges because of the dominance of functional experts in the organization. Anhui ANLI Artificial Leather can utilize new technology in the field of Fabricated Plastic & Rubber industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Learning at scale
– Online learning technologies has now opened space for Anhui ANLI Artificial Leather 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.
Developing new processes and practices
– Anhui ANLI Artificial Leather 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.
Manufacturing automation
– Anhui ANLI Artificial Leather can use the latest technology developments to improve its manufacturing and designing process in Fabricated Plastic & Rubber 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.
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. Anhui ANLI Artificial Leather can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Anhui ANLI Artificial Leather 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 Anhui ANLI Artificial Leather to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Anhui ANLI Artificial Leather External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Anhui ANLI Artificial Leather are -
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Technology acceleration in Forth Industrial Revolution
– Anhui ANLI Artificial Leather has witnessed rapid integration of technology during Covid-19 in the Fabricated Plastic & Rubber industry. As one of the leading players in the industry, Anhui ANLI Artificial Leather needs to keep up with the evolution of technology in the Fabricated Plastic & Rubber 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 wage structure of Anhui ANLI Artificial Leather
– 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 Anhui ANLI Artificial Leather.
Environmental challenges
– Anhui ANLI Artificial Leather 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. Anhui ANLI Artificial Leather can take advantage of this fund but it will also bring new competitors in the Fabricated Plastic & Rubber industry.
Easy access to finance
– Easy access to finance in Fabricated Plastic & Rubber industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Anhui ANLI Artificial Leather can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Fabricated Plastic & Rubber industry are lowering. It can presents Anhui ANLI Artificial Leather 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.
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 Anhui ANLI Artificial Leather.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Anhui ANLI Artificial Leather 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 Anhui ANLI Artificial Leather prominent markets.
Shortening product life cycle
– it is one of the major threat that Anhui ANLI Artificial Leather is facing in Fabricated Plastic & Rubber sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Anhui ANLI Artificial Leather 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 Anhui ANLI Artificial Leather in the Fabricated Plastic & Rubber sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Anhui ANLI Artificial Leather 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.
Regulatory challenges
– Anhui ANLI Artificial Leather 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 Fabricated Plastic & Rubber industry regulations.
Weighted SWOT Analysis of Anhui ANLI Artificial Leather Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Anhui ANLI Artificial Leather 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 Anhui ANLI Artificial Leather 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 Anhui ANLI Artificial Leather 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 Anhui ANLI Artificial Leather 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 Anhui ANLI Artificial Leather needs to make to build a sustainable competitive advantage.
