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Qingdao Haier (690D) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Qingdao Haier (Germany)


Based on various researches at Oak Spring University , Qingdao Haier is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, etc



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Introduction to SWOT Analysis of Qingdao Haier


SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Qingdao Haier can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Qingdao Haier, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Qingdao Haier 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 Qingdao Haier can be done for the following purposes –
1. Strategic planning of Qingdao Haier
2. Improving business portfolio management of Qingdao Haier
3. Assessing feasibility of the new initiative in Germany
4. Making a sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Qingdao Haier




Strengths of Qingdao Haier | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Qingdao Haier are -

High brand equity

– Qingdao Haier has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Qingdao Haier to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Highly skilled collaborators

– Qingdao Haier has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive industry. Secondly the value chain collaborators of Qingdao Haier have helped the firm to develop new products and bring them quickly to the marketplace.

High switching costs

– The high switching costs that Qingdao Haier 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.

Training and development

– Qingdao Haier has one of the best training and development program in 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.

Diverse revenue streams

– Qingdao Haier is present in almost all the verticals within the industry. This has provided Qingdao Haier 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.

Ability to lead change in

– Qingdao Haier is one of the leading players in the industry in Germany. Over the years it has not only transformed the business landscape in the industry in Germany but also across the existing markets. The ability to lead change has enabled Qingdao Haier in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Analytics focus

– Qingdao Haier 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 industry. The technology infrastructure of Germany 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.

Cross disciplinary teams

– Horizontal connected teams at the Qingdao Haier 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.

Digital Transformation in industry

- digital transformation varies from industry to industry. For Qingdao Haier digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Qingdao Haier 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.

Innovation driven organization

– Qingdao Haier is one of the most innovative firm in sector.

Low bargaining power of suppliers

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

Superior customer experience

– The customer experience strategy of Qingdao Haier in industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.






Weaknesses of Qingdao Haier | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Qingdao Haier are -

High dependence on Qingdao Haier ‘s star products

– The top 2 products and services of Qingdao Haier still accounts for major business revenue. This dependence on star products in industry has resulted into insufficient focus on developing new products, even though Qingdao Haier has relatively successful track record of launching new products.

Low market penetration in new markets

– Outside its home market of Germany, Qingdao Haier needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Products dominated business model

– Even though Qingdao Haier has some of the most successful models in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Qingdao Haier should strive to include more intangible value offerings along with its core products and services.

Increasing silos among functional specialists

– The organizational structure of Qingdao Haier is dominated by functional specialists. It is not different from other players in the industry, but Qingdao Haier needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Qingdao Haier to focus more on services in the industry rather than just following the product oriented approach.

High cash cycle compare to competitors

Qingdao Haier has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Workers concerns about automation

– As automation is fast increasing in the industry, Qingdao Haier 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.

Capital Spending Reduction

– Even during the low interest decade, Qingdao Haier 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 industry using digital technology.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Qingdao Haier is slow explore the new channels of communication. These new channels of communication can help Qingdao Haier to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.

Employees’ less understanding of Qingdao Haier strategy

– From the outside it seems that the employees of Qingdao Haier 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.

Skills based hiring in industry

– The stress on hiring functional specialists at Qingdao Haier 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 Qingdao Haier, it seems that company is thinking out the frontier risks that can impact 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.




Qingdao Haier Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The opportunities of Qingdao Haier are -

Lowering marketing communication costs

– 5G expansion will open new opportunities for Qingdao Haier in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the industry, and it will provide faster access to the consumers.

Developing new processes and practices

– Qingdao Haier can develop new processes and procedures in 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.

Using analytics as competitive advantage

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

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Qingdao Haier 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 Qingdao Haier to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Low interest rates

– Even though inflation is raising its head in most developed economies, Qingdao Haier 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.

Manufacturing automation

– Qingdao Haier can use the latest technology developments to improve its manufacturing and designing process in 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.

Learning at scale

– Online learning technologies has now opened space for Qingdao Haier 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.

Reforming the budgeting process

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

Leveraging digital technologies

– Qingdao Haier 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.

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 Qingdao Haier 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.

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. Qingdao Haier can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Building a culture of innovation

– managers at Qingdao Haier 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 industry.

Better consumer reach

– The expansion of the 5G network will help Qingdao Haier to increase its market reach. Qingdao Haier 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.




Threats Qingdao Haier External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The threats of Qingdao Haier are -

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Qingdao Haier 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 Qingdao Haier prominent markets.

Consumer confidence and its impact on Qingdao Haier 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 industry and other sectors.

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 Qingdao Haier.

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. Qingdao Haier needs to understand the core reasons impacting the industry. This will help it in building a better workplace.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to industry are lowering. It can presents Qingdao Haier with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.

Regulatory challenges

– Qingdao Haier 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 industry regulations.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Qingdao Haier in industry. The 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.

Environmental challenges

– Qingdao Haier 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. Qingdao Haier can take advantage of this fund but it will also bring new competitors in the industry.

Easy access to finance

– Easy access to finance in industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Qingdao Haier can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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. Qingdao Haier 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.

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 Qingdao Haier in the sector and impact the bottomline of the organization.

Learning curve for new practices

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

Stagnating economy with rate increase

– Qingdao Haier 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 industry.




Weighted SWOT Analysis of Qingdao Haier Template, Example


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



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