Wuhan Golden Laser (300220) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Wuhan Golden Laser (China)

Based on various researches at Oak Spring University , Wuhan Golden Laser is operating in a macro-environment that has been destablized by – geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, central banks are concerned over increasing inflation, increasing energy prices, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, etc

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Introduction to SWOT Analysis of Wuhan Golden Laser

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Wuhan Golden Laser can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Wuhan Golden Laser, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Wuhan Golden Laser 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Wuhan Golden Laser can be done for the following purposes –
1. Strategic planning of Wuhan Golden Laser
2. Improving business portfolio management of Wuhan Golden Laser
3. Assessing feasibility of the new initiative in China
4. Making a Misc. Capital Goods sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Wuhan Golden Laser

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Strengths of Wuhan Golden Laser | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Wuhan Golden Laser are -

Training and development

– Wuhan Golden Laser has one of the best training and development program in Capital Goods 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

– Wuhan Golden Laser is one of the leading players in the Misc. Capital Goods 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.

Learning organization

- Wuhan Golden Laser 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 Wuhan Golden Laser is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Wuhan Golden Laser emphasize – knowledge, initiative, and innovation.

Low bargaining power of suppliers

– Suppliers of Wuhan Golden Laser in the Capital Goods sector have low bargaining power. Wuhan Golden Laser has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Wuhan Golden Laser to manage not only supply disruptions but also source products at highly competitive prices.

Sustainable margins compare to other players in Misc. Capital Goods industry

– Wuhan Golden Laser has clearly differentiated products in the market place. This has enabled Wuhan Golden Laser to fetch slight price premium compare to the competitors in the Misc. Capital Goods industry. The sustainable margins have also helped Wuhan Golden Laser to invest into research and development (R&D) and innovation.

High switching costs

– The high switching costs that Wuhan Golden Laser 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.

Effective Research and Development (R&D)

– Wuhan Golden Laser has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Wuhan Golden Laser staying ahead in the Misc. Capital Goods industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Superior customer experience

– The customer experience strategy of Wuhan Golden Laser in Misc. Capital Goods industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Innovation driven organization

– Wuhan Golden Laser is one of the most innovative firm in Misc. Capital Goods sector.

Cross disciplinary teams

– Horizontal connected teams at the Wuhan Golden Laser 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.

Analytics focus

– Wuhan Golden Laser 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. Capital Goods 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.

Diverse revenue streams

– Wuhan Golden Laser is present in almost all the verticals within the Misc. Capital Goods industry. This has provided Wuhan Golden Laser 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.

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Weaknesses of Wuhan Golden Laser | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Wuhan Golden Laser are -

High cash cycle compare to competitors

Wuhan Golden Laser has a high cash cycle compare to other players in the Misc. Capital Goods industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Capital Spending Reduction

– Even during the low interest decade, Wuhan Golden Laser 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. Capital Goods industry using digital technology.

Need for greater diversity

– Wuhan Golden Laser 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.

High operating costs

– Compare to the competitors, Wuhan Golden Laser has high operating costs in the Misc. Capital Goods industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Wuhan Golden Laser lucrative customers.

Skills based hiring in Misc. Capital Goods industry

– The stress on hiring functional specialists at Wuhan Golden Laser 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.

Workers concerns about automation

– As automation is fast increasing in the Misc. Capital Goods industry, Wuhan Golden Laser 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.

Employees’ less understanding of Wuhan Golden Laser strategy

– From the outside it seems that the employees of Wuhan Golden Laser 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.

Interest costs

– Compare to the competition, Wuhan Golden Laser 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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Wuhan Golden Laser is slow explore the new channels of communication. These new channels of communication can help Wuhan Golden Laser to provide better information regarding Misc. Capital Goods 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 Wuhan Golden Laser is just above the Misc. Capital Goods 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 Misc. Capital Goods industry

– because of the regulatory requirements in China, Wuhan Golden Laser 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 Misc. Capital Goods industry.

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Wuhan Golden Laser Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Wuhan Golden Laser are -

Creating value in data economy

– The success of analytics program of Wuhan Golden Laser has opened avenues for new revenue streams for the organization in Misc. Capital Goods industry. This can help Wuhan Golden Laser to build a more holistic ecosystem for Wuhan Golden Laser products in the Misc. Capital Goods industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Wuhan Golden Laser can use these opportunities to build new business models that can help the communities that Wuhan Golden Laser operates in. Secondly it can use opportunities from government spending in Misc. Capital Goods sector.

Using analytics as competitive advantage

– Wuhan Golden Laser has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Misc. Capital Goods sector. This continuous investment in analytics has enabled Wuhan Golden Laser to build a competitive advantage using analytics. The analytics driven competitive advantage can help Wuhan Golden Laser to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Building a culture of innovation

– managers at Wuhan Golden Laser 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. Capital Goods industry.

Loyalty marketing

– Wuhan Golden Laser 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, Wuhan Golden Laser is facing challenges because of the dominance of functional experts in the organization. Wuhan Golden Laser can utilize new technology in the field of Misc. Capital Goods industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

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. Wuhan Golden Laser can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Better consumer reach

– The expansion of the 5G network will help Wuhan Golden Laser to increase its market reach. Wuhan Golden Laser 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.

Leveraging digital technologies

– Wuhan Golden Laser 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.

Use of Bitcoin and other crypto currencies for transactions in Misc. Capital Goods industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Wuhan Golden Laser in the Misc. Capital Goods industry. Now Wuhan Golden Laser can target international markets with far fewer capital restrictions requirements than the existing system.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Wuhan Golden Laser can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Manufacturing automation

– Wuhan Golden Laser can use the latest technology developments to improve its manufacturing and designing process in Misc. Capital Goods 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 Wuhan Golden Laser 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 Wuhan Golden Laser to hire the very best people irrespective of their geographical location.

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Threats Wuhan Golden Laser External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Wuhan Golden Laser are -

Increasing wage structure of Wuhan Golden Laser

– 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 Wuhan Golden Laser.

Stagnating economy with rate increase

– Wuhan Golden Laser 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. Capital Goods industry.

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 Wuhan Golden Laser in the Misc. Capital Goods sector and impact the bottomline of the organization.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Wuhan Golden Laser 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 Wuhan Golden Laser prominent markets.

Technology acceleration in Forth Industrial Revolution

– Wuhan Golden Laser has witnessed rapid integration of technology during Covid-19 in the Misc. Capital Goods industry. As one of the leading players in the industry, Wuhan Golden Laser needs to keep up with the evolution of technology in the Misc. Capital Goods 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.

High dependence on third party suppliers

– Wuhan Golden Laser 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.

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.

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 Wuhan Golden Laser.

Easy access to finance

– Easy access to finance in Misc. Capital Goods industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Wuhan Golden Laser 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 Misc. Capital Goods industry are lowering. It can presents Wuhan Golden Laser with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Misc. Capital Goods sector.

Environmental challenges

– Wuhan Golden Laser 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. Wuhan Golden Laser can take advantage of this fund but it will also bring new competitors in the Misc. Capital Goods industry.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Wuhan Golden Laser may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Misc. Capital Goods sector.

Shortening product life cycle

– it is one of the major threat that Wuhan Golden Laser is facing in Misc. Capital Goods sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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Weighted SWOT Analysis of Wuhan Golden Laser Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Wuhan Golden Laser 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 Wuhan Golden Laser 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 Wuhan Golden Laser 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 Wuhan Golden Laser 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 Wuhan Golden Laser needs to make to build a sustainable competitive advantage.

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