China Petrol & Chemical H (386) SWOT Analysis / TOWS Matrix / MBA Resources
Retail (Specialty)
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for China Petrol & Chemical H (Hong Kong)
Based on various researches at Oak Spring University , China Petrol & Chemical H is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, challanges to central banks by blockchain based private currencies, technology disruption, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, etc
Introduction to SWOT Analysis of China Petrol & Chemical H
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that China Petrol & Chemical H can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the China Petrol & Chemical H, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which China Petrol & Chemical H 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 China Petrol & Chemical H can be done for the following purposes –
1. Strategic planning of China Petrol & Chemical H
2. Improving business portfolio management of China Petrol & Chemical H
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Retail (Specialty) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of China Petrol & Chemical H
Strengths of China Petrol & Chemical H | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of China Petrol & Chemical H are -
High brand equity
– China Petrol & Chemical H has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled China Petrol & Chemical H to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of China Petrol & Chemical H
– The covid-19 pandemic has put organizational resilience at the centre of everthing China Petrol & Chemical H does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– China Petrol & Chemical H has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – China Petrol & Chemical H staying ahead in the Retail (Specialty) industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– China Petrol & Chemical H is present in almost all the verticals within the Retail (Specialty) industry. This has provided China Petrol & Chemical H 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.
Cross disciplinary teams
– Horizontal connected teams at the China Petrol & Chemical H 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.
Low bargaining power of suppliers
– Suppliers of China Petrol & Chemical H in the Services sector have low bargaining power. China Petrol & Chemical H has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps China Petrol & Chemical H to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– China Petrol & Chemical H has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Retail (Specialty) industry. Secondly the value chain collaborators of China Petrol & Chemical H have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- China Petrol & Chemical H 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 China Petrol & Chemical H is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at China Petrol & Chemical H emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy of China Petrol & Chemical H comprises – understanding the underlying the factors in the Retail (Specialty) 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.
Successful track record of launching new products
– China Petrol & Chemical H has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. China Petrol & Chemical H 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.
Superior customer experience
– The customer experience strategy of China Petrol & Chemical H in Retail (Specialty) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– China Petrol & Chemical H 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 Retail (Specialty) industry. The technology infrastructure of Hong Kong 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.
Weaknesses of China Petrol & Chemical H | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of China Petrol & Chemical H are -
High dependence on China Petrol & Chemical H ‘s star products
– The top 2 products and services of China Petrol & Chemical H still accounts for major business revenue. This dependence on star products in Retail (Specialty) industry has resulted into insufficient focus on developing new products, even though China Petrol & Chemical H has relatively successful track record of launching new products.
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 China Petrol & Chemical H supply chain. Even after few cautionary changes, China Petrol & Chemical H is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left China Petrol & Chemical H vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– From the 10K / annual statement of China Petrol & Chemical H, it seems that company is thinking out the frontier risks that can impact Retail (Specialty) 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.
Skills based hiring in Retail (Specialty) industry
– The stress on hiring functional specialists at China Petrol & Chemical H 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.
Slow decision making process
– As mentioned earlier in the report, China Petrol & Chemical H has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Retail (Specialty) industry over the last five years. China Petrol & Chemical H even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Ability to respond to the competition
– As the decision making is very deliberative at China Petrol & Chemical H, in the dynamic environment of Retail (Specialty) industry it has struggled to respond to the nimble upstart competition. China Petrol & Chemical H has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, China Petrol & Chemical H is slow explore the new channels of communication. These new channels of communication can help China Petrol & Chemical H to provide better information regarding Retail (Specialty) products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, China Petrol & Chemical H has high operating costs in the Retail (Specialty) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract China Petrol & Chemical H lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, China Petrol & Chemical H 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 Retail (Specialty) industry using digital technology.
Increasing silos among functional specialists
– The organizational structure of China Petrol & Chemical H is dominated by functional specialists. It is not different from other players in the Retail (Specialty) industry, but China Petrol & Chemical H needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help China Petrol & Chemical H to focus more on services in the Retail (Specialty) industry rather than just following the product oriented approach.
Lack of clear differentiation of China Petrol & Chemical H products
– To increase the profitability and margins on the products, China Petrol & Chemical H needs to provide more differentiated products than what it is currently offering in the marketplace.
China Petrol & Chemical H Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of China Petrol & Chemical H are -
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Retail (Specialty) industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. China Petrol & Chemical H 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. China Petrol & Chemical H 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.
Developing new processes and practices
– China Petrol & Chemical H can develop new processes and procedures in Retail (Specialty) 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.
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. China Petrol & Chemical H can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for China Petrol & Chemical H 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 China Petrol & Chemical H can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, China Petrol & Chemical H can use these opportunities to build new business models that can help the communities that China Petrol & Chemical H operates in. Secondly it can use opportunities from government spending in Retail (Specialty) sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for China Petrol & Chemical H 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 China Petrol & Chemical H to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, China Petrol & Chemical H 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.
Creating value in data economy
– The success of analytics program of China Petrol & Chemical H has opened avenues for new revenue streams for the organization in Retail (Specialty) industry. This can help China Petrol & Chemical H to build a more holistic ecosystem for China Petrol & Chemical H products in the Retail (Specialty) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– China Petrol & Chemical H 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.
Manufacturing automation
– China Petrol & Chemical H can use the latest technology developments to improve its manufacturing and designing process in Retail (Specialty) 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, China Petrol & Chemical H is facing challenges because of the dominance of functional experts in the organization. China Petrol & Chemical H can utilize new technology in the field of Retail (Specialty) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Better consumer reach
– The expansion of the 5G network will help China Petrol & Chemical H to increase its market reach. China Petrol & Chemical H 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 China Petrol & Chemical H External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of China Petrol & Chemical H are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Retail (Specialty) industry are lowering. It can presents China Petrol & Chemical H with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Retail (Specialty) sector.
Technology acceleration in Forth Industrial Revolution
– China Petrol & Chemical H has witnessed rapid integration of technology during Covid-19 in the Retail (Specialty) industry. As one of the leading players in the industry, China Petrol & Chemical H needs to keep up with the evolution of technology in the Retail (Specialty) 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.
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.
Increasing wage structure of China Petrol & Chemical H
– 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 China Petrol & Chemical H.
Stagnating economy with rate increase
– China Petrol & Chemical H 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 Retail (Specialty) industry.
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. China Petrol & Chemical H needs to understand the core reasons impacting the Retail (Specialty) industry. This will help it in building a better workplace.
High dependence on third party suppliers
– China Petrol & Chemical H 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 China Petrol & Chemical H in the Retail (Specialty) sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that China Petrol & Chemical H is facing in Retail (Specialty) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– China Petrol & Chemical H 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. China Petrol & Chemical H can take advantage of this fund but it will also bring new competitors in the Retail (Specialty) industry.
Regulatory challenges
– China Petrol & Chemical H 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 Retail (Specialty) industry regulations.
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. China Petrol & Chemical H 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.
Easy access to finance
– Easy access to finance in Retail (Specialty) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. China Petrol & Chemical H can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of China Petrol & Chemical H Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at China Petrol & Chemical H 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 China Petrol & Chemical H 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 China Petrol & Chemical H 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 China Petrol & Chemical H 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 China Petrol & Chemical H needs to make to build a sustainable competitive advantage.