China Jinmao Holdings Group (817) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for China Jinmao Holdings Group (Hong Kong)

Based on various researches at Oak Spring University , China Jinmao Holdings Group is operating in a macro-environment that has been destablized by – increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, increasing household debt because of falling income levels, etc

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Introduction to SWOT Analysis of China Jinmao Holdings Group

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

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Strengths of China Jinmao Holdings Group | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of China Jinmao Holdings Group are -

High brand equity

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

Organizational Resilience of China Jinmao Holdings Group

– The covid-19 pandemic has put organizational resilience at the centre of everthing China Jinmao Holdings Group does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Strong track record of project management in the Construction Services industry

– China Jinmao Holdings Group is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Operational resilience

– The operational resilience strategy of China Jinmao Holdings Group comprises – understanding the underlying the factors in the Construction Services 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.

Learning organization

- China Jinmao Holdings Group 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 Jinmao Holdings Group is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at China Jinmao Holdings Group emphasize – knowledge, initiative, and innovation.

Highly skilled collaborators

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

Sustainable margins compare to other players in Construction Services industry

– China Jinmao Holdings Group has clearly differentiated products in the market place. This has enabled China Jinmao Holdings Group to fetch slight price premium compare to the competitors in the Construction Services industry. The sustainable margins have also helped China Jinmao Holdings Group to invest into research and development (R&D) and innovation.

Successful track record of launching new products

– China Jinmao Holdings Group has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. China Jinmao Holdings Group 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 Jinmao Holdings Group in Construction Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Low bargaining power of suppliers

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

Cross disciplinary teams

– Horizontal connected teams at the China Jinmao Holdings Group 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 Construction Services industry

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

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Weaknesses of China Jinmao Holdings Group | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of China Jinmao Holdings Group are -

Skills based hiring in Construction Services industry

– The stress on hiring functional specialists at China Jinmao Holdings Group 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.

Ability to respond to the competition

– As the decision making is very deliberative at China Jinmao Holdings Group, in the dynamic environment of Construction Services industry it has struggled to respond to the nimble upstart competition. China Jinmao Holdings Group has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Compensation and incentives

– The revenue per employee of China Jinmao Holdings Group is just above the Construction Services 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 strategic competitive environment developments

– As China Jinmao Holdings Group is one of the leading players in the Construction Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Construction Services industry in last five years.

Aligning sales with marketing

– From the outside it seems that China Jinmao Holdings Group needs to have more collaboration between its sales team and marketing team. Sales professionals in the Construction Services industry have deep experience in developing customer relationships. Marketing department at China Jinmao Holdings Group can leverage the sales team experience to cultivate customer relationships as China Jinmao Holdings Group is planning to shift buying processes online.

Employees’ less understanding of China Jinmao Holdings Group strategy

– From the outside it seems that the employees of China Jinmao Holdings Group 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.

Workers concerns about automation

– As automation is fast increasing in the Construction Services industry, China Jinmao Holdings Group 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.

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 Jinmao Holdings Group supply chain. Even after few cautionary changes, China Jinmao Holdings Group is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left China Jinmao Holdings Group vulnerable to further global disruptions in South East Asia.

Increasing silos among functional specialists

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

Interest costs

– Compare to the competition, China Jinmao Holdings Group 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.

Need for greater diversity

– China Jinmao Holdings Group 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.

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China Jinmao Holdings Group Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of China Jinmao Holdings Group are -

Learning at scale

– Online learning technologies has now opened space for China Jinmao Holdings Group 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.

Loyalty marketing

– China Jinmao Holdings Group 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.

Using analytics as competitive advantage

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

Developing new processes and practices

– China Jinmao Holdings Group can develop new processes and procedures in Construction Services 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects China Jinmao Holdings Group 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 Construction Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. China Jinmao Holdings Group 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 Jinmao Holdings Group 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.

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 Jinmao Holdings Group can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Lowering marketing communication costs

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

Harnessing reconfiguration of the global supply chains

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

Building a culture of innovation

– managers at China Jinmao Holdings Group 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 Construction Services industry.

Buying journey improvements

– China Jinmao Holdings Group can improve the customer journey of consumers in the Construction Services industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Construction Services industry, but it has also influenced the consumer preferences. China Jinmao Holdings Group can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

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 China Jinmao Holdings Group 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.

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Threats China Jinmao Holdings Group External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of China Jinmao Holdings Group are -

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for China Jinmao Holdings Group in Construction Services industry. The Construction Services 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.

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.

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 Jinmao Holdings Group needs to understand the core reasons impacting the Construction Services industry. This will help it in building a better workplace.

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.

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 Jinmao Holdings Group 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.

Increasing wage structure of China Jinmao Holdings Group

– 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 Jinmao Holdings Group.

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 China Jinmao Holdings Group business can come under increasing regulations regarding data privacy, data security, etc.

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 China Jinmao Holdings Group.

Environmental challenges

– China Jinmao Holdings Group 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 Jinmao Holdings Group can take advantage of this fund but it will also bring new competitors in the Construction Services industry.

Regulatory challenges

– China Jinmao Holdings Group 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 Construction Services industry regulations.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, China Jinmao Holdings Group 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 China Jinmao Holdings Group prominent markets.

Consumer confidence and its impact on China Jinmao Holdings Group 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 Construction Services industry and other sectors.

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 Jinmao Holdings Group in the Construction Services sector and impact the bottomline of the organization.

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Weighted SWOT Analysis of China Jinmao Holdings Group Template, Example

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

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