CIMC Group (2039) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for CIMC Group (Hong Kong)

Based on various researches at Oak Spring University , CIMC Group is operating in a macro-environment that has been destablized by – increasing commodity prices, central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, wage bills are increasing, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc

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Introduction to SWOT Analysis of CIMC Group

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

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

The strengths of CIMC Group are -

Innovation driven organization

– CIMC Group is one of the most innovative firm in Containers & Packaging sector.

Strong track record of project management in the Containers & Packaging industry

– CIMC 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.

Low bargaining power of suppliers

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

Organizational Resilience of CIMC Group

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

Training and development

– CIMC Group has one of the best training and development program in Basic Materials industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.

Ability to recruit top talent

– CIMC Group is one of the leading players in the Containers & Packaging 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.

Highly skilled collaborators

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

Digital Transformation in Containers & Packaging industry

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

High switching costs

– The high switching costs that CIMC Group has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.

Effective Research and Development (R&D)

– CIMC Group has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – CIMC Group staying ahead in the Containers & Packaging industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Learning organization

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

Sustainable margins compare to other players in Containers & Packaging industry

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

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

The weaknesses of CIMC Group are -

Need for greater diversity

– CIMC 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.

Increasing silos among functional specialists

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

Compensation and incentives

– The revenue per employee of CIMC Group is just above the Containers & Packaging 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.

Aligning sales with marketing

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

Slow to strategic competitive environment developments

– As CIMC Group is one of the leading players in the Containers & Packaging industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Containers & Packaging industry in last five years.

Ability to respond to the competition

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

Skills based hiring in Containers & Packaging industry

– The stress on hiring functional specialists at CIMC 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.

High bargaining power of channel partners in Containers & Packaging industry

– because of the regulatory requirements in Hong Kong, CIMC Group is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Containers & Packaging industry.

Workers concerns about automation

– As automation is fast increasing in the Containers & Packaging industry, CIMC 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 CIMC Group supply chain. Even after few cautionary changes, CIMC Group is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left CIMC Group vulnerable to further global disruptions in South East Asia.

No frontier risks strategy

– From the 10K / annual statement of CIMC Group, it seems that company is thinking out the frontier risks that can impact Containers & Packaging 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.

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

The opportunities of CIMC Group are -

Building a culture of innovation

– managers at CIMC 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 Containers & Packaging industry.

Reforming the budgeting process

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

Creating value in data economy

– The success of analytics program of CIMC Group has opened avenues for new revenue streams for the organization in Containers & Packaging industry. This can help CIMC Group to build a more holistic ecosystem for CIMC Group products in the Containers & Packaging industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Loyalty marketing

– CIMC 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.

Buying journey improvements

– CIMC Group can improve the customer journey of consumers in the Containers & Packaging 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, CIMC Group can use these opportunities to build new business models that can help the communities that CIMC Group operates in. Secondly it can use opportunities from government spending in Containers & Packaging sector.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, CIMC 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 CIMC 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.

Use of Bitcoin and other crypto currencies for transactions in Containers & Packaging industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for CIMC Group in the Containers & Packaging industry. Now CIMC Group can target international markets with far fewer capital restrictions requirements than the existing system.

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

Manufacturing automation

– CIMC Group can use the latest technology developments to improve its manufacturing and designing process in Containers & Packaging 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 CIMC 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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for CIMC Group 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 CIMC Group to hire the very best people irrespective of their geographical location.

Lowering marketing communication costs

– 5G expansion will open new opportunities for CIMC 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 Containers & Packaging industry, and it will provide faster access to the consumers.

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Threats CIMC Group External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of CIMC Group are -

Learning curve for new practices

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

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for CIMC Group in Containers & Packaging industry. The Containers & Packaging 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.

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. CIMC Group needs to understand the core reasons impacting the Containers & Packaging industry. This will help it in building a better workplace.

Technology acceleration in Forth Industrial Revolution

– CIMC Group has witnessed rapid integration of technology during Covid-19 in the Containers & Packaging industry. As one of the leading players in the industry, CIMC Group needs to keep up with the evolution of technology in the Containers & Packaging 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.

Shortening product life cycle

– it is one of the major threat that CIMC Group is facing in Containers & Packaging sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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 CIMC 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 CIMC Group business can come under increasing regulations regarding data privacy, data security, etc.

Stagnating economy with rate increase

– CIMC Group 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 Containers & Packaging industry.

Consumer confidence and its impact on CIMC 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 Containers & Packaging industry and other sectors.

Barriers of entry lowering

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

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.

Environmental challenges

– CIMC 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. CIMC Group can take advantage of this fund but it will also bring new competitors in the Containers & Packaging industry.

Increasing wage structure of CIMC 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 CIMC Group.

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Weighted SWOT Analysis of CIMC Group Template, Example

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

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