Based on various researches at Oak Spring University , Yanzhou Coal Mining is operating in a macro-environment that has been destablized by – increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, technology disruption,
increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Yanzhou Coal Mining
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Yanzhou Coal Mining can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Yanzhou Coal Mining, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Yanzhou Coal Mining 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 Yanzhou Coal Mining can be done for the following purposes –
1. Strategic planning of Yanzhou Coal Mining
2. Improving business portfolio management of Yanzhou Coal Mining
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Coal sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Yanzhou Coal Mining
Strengths of Yanzhou Coal Mining | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Yanzhou Coal Mining are -
Cross disciplinary teams
– Horizontal connected teams at the Yanzhou Coal Mining 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.
Innovation driven organization
– Yanzhou Coal Mining is one of the most innovative firm in Coal sector.
Sustainable margins compare to other players in Coal industry
– Yanzhou Coal Mining has clearly differentiated products in the market place. This has enabled Yanzhou Coal Mining to fetch slight price premium compare to the competitors in the Coal industry. The sustainable margins have also helped Yanzhou Coal Mining to invest into research and development (R&D) and innovation.
Digital Transformation in Coal industry
- digital transformation varies from industry to industry. For Yanzhou Coal Mining digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Yanzhou Coal Mining 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.
Ability to recruit top talent
– Yanzhou Coal Mining is one of the leading players in the Coal industry in Hong Kong. It is in a position to attract the best talent available in Hong Kong. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Yanzhou Coal Mining 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 Yanzhou Coal Mining is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Yanzhou Coal Mining emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Yanzhou Coal Mining has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Coal industry. Secondly the value chain collaborators of Yanzhou Coal Mining have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Yanzhou Coal Mining has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Yanzhou Coal Mining 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.
Effective Research and Development (R&D)
– Yanzhou Coal Mining has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Yanzhou Coal Mining staying ahead in the Coal industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Yanzhou Coal Mining 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 Coal 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.
Diverse revenue streams
– Yanzhou Coal Mining is present in almost all the verticals within the Coal industry. This has provided Yanzhou Coal Mining 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.
High switching costs
– The high switching costs that Yanzhou Coal Mining 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.
Weaknesses of Yanzhou Coal Mining | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Yanzhou Coal Mining are -
Need for greater diversity
– Yanzhou Coal Mining has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Slow decision making process
– As mentioned earlier in the report, Yanzhou Coal Mining has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Coal industry over the last five years. Yanzhou Coal Mining 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.
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 Yanzhou Coal Mining supply chain. Even after few cautionary changes, Yanzhou Coal Mining is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Yanzhou Coal Mining vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Hong Kong, Yanzhou Coal Mining needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, Yanzhou Coal Mining has high operating costs in the Coal industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Yanzhou Coal Mining lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Yanzhou Coal Mining is dominated by functional specialists. It is not different from other players in the Coal industry, but Yanzhou Coal Mining needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Yanzhou Coal Mining to focus more on services in the Coal industry rather than just following the product oriented approach.
Skills based hiring in Coal industry
– The stress on hiring functional specialists at Yanzhou Coal Mining 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 to strategic competitive environment developments
– As Yanzhou Coal Mining is one of the leading players in the Coal industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Coal industry in last five years.
High dependence on Yanzhou Coal Mining ‘s star products
– The top 2 products and services of Yanzhou Coal Mining still accounts for major business revenue. This dependence on star products in Coal industry has resulted into insufficient focus on developing new products, even though Yanzhou Coal Mining has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee of Yanzhou Coal Mining is just above the Coal 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Yanzhou Coal Mining is slow explore the new channels of communication. These new channels of communication can help Yanzhou Coal Mining to provide better information regarding Coal products and services. It can also build an online community to further reach out to potential customers.
Yanzhou Coal Mining Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Yanzhou Coal Mining are -
Developing new processes and practices
– Yanzhou Coal Mining can develop new processes and procedures in Coal 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.
Leveraging digital technologies
– Yanzhou Coal Mining 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.
Using analytics as competitive advantage
– Yanzhou Coal Mining has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Coal sector. This continuous investment in analytics has enabled Yanzhou Coal Mining to build a competitive advantage using analytics. The analytics driven competitive advantage can help Yanzhou Coal Mining to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Yanzhou Coal Mining 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 Coal industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Yanzhou Coal Mining 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. Yanzhou Coal Mining 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.
Loyalty marketing
– Yanzhou Coal Mining 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.
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. Yanzhou Coal Mining can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Yanzhou Coal Mining 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.
Manufacturing automation
– Yanzhou Coal Mining can use the latest technology developments to improve its manufacturing and designing process in Coal 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Yanzhou Coal Mining in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Coal industry, and it will provide faster access to the consumers.
Building a culture of innovation
– managers at Yanzhou Coal Mining 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 Coal industry.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Yanzhou Coal Mining 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 Yanzhou Coal Mining to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Coal industry, but it has also influenced the consumer preferences. Yanzhou Coal Mining can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Yanzhou Coal Mining External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Yanzhou Coal Mining are -
Environmental challenges
– Yanzhou Coal Mining 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. Yanzhou Coal Mining can take advantage of this fund but it will also bring new competitors in the Coal industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Yanzhou Coal Mining may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Coal sector.
High dependence on third party suppliers
– Yanzhou Coal Mining 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Yanzhou Coal Mining 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 Yanzhou Coal Mining prominent markets.
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.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Yanzhou Coal Mining business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Yanzhou Coal Mining has witnessed rapid integration of technology during Covid-19 in the Coal industry. As one of the leading players in the industry, Yanzhou Coal Mining needs to keep up with the evolution of technology in the Coal 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.
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.
Increasing wage structure of Yanzhou Coal Mining
– 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 Yanzhou Coal Mining.
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 Yanzhou Coal Mining.
Regulatory challenges
– Yanzhou Coal Mining 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 Coal industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Yanzhou Coal Mining in Coal industry. The Coal 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.
Consumer confidence and its impact on Yanzhou Coal Mining 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 Coal industry and other sectors.
Weighted SWOT Analysis of Yanzhou Coal Mining Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Yanzhou Coal Mining 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 Yanzhou Coal Mining 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 Yanzhou Coal Mining 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 Yanzhou Coal Mining 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 Yanzhou Coal Mining needs to make to build a sustainable competitive advantage.
