Chongqing Iron Steel Co (1053) SWOT Analysis / TOWS Matrix / MBA Resources
Iron & Steel
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Chongqing Iron Steel Co (Hong Kong)
Based on various researches at Oak Spring University , Chongqing Iron Steel Co is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, increasing commodity prices, challanges to central banks by blockchain based private currencies,
there is backlash against globalization, increasing energy prices, etc
Introduction to SWOT Analysis of Chongqing Iron Steel Co
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Chongqing Iron Steel Co can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Chongqing Iron Steel Co, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Chongqing Iron Steel Co 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 Chongqing Iron Steel Co can be done for the following purposes –
1. Strategic planning of Chongqing Iron Steel Co
2. Improving business portfolio management of Chongqing Iron Steel Co
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Iron & Steel sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Chongqing Iron Steel Co
Strengths of Chongqing Iron Steel Co | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Chongqing Iron Steel Co are -
Highly skilled collaborators
– Chongqing Iron Steel Co has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Iron & Steel industry. Secondly the value chain collaborators of Chongqing Iron Steel Co have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Chongqing Iron Steel Co in Iron & Steel industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Iron & Steel industry
– Chongqing Iron Steel Co has clearly differentiated products in the market place. This has enabled Chongqing Iron Steel Co to fetch slight price premium compare to the competitors in the Iron & Steel industry. The sustainable margins have also helped Chongqing Iron Steel Co to invest into research and development (R&D) and innovation.
Innovation driven organization
– Chongqing Iron Steel Co is one of the most innovative firm in Iron & Steel sector.
Digital Transformation in Iron & Steel industry
- digital transformation varies from industry to industry. For Chongqing Iron Steel Co digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Chongqing Iron Steel Co 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.
Strong track record of project management in the Iron & Steel industry
– Chongqing Iron Steel Co is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Chongqing Iron Steel Co is present in almost all the verticals within the Iron & Steel industry. This has provided Chongqing Iron Steel Co 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.
Low bargaining power of suppliers
– Suppliers of Chongqing Iron Steel Co in the Basic Materials sector have low bargaining power. Chongqing Iron Steel Co has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Chongqing Iron Steel Co to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Chongqing Iron Steel Co 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 Iron & Steel 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.
Ability to lead change in Iron & Steel
– Chongqing Iron Steel Co is one of the leading players in the Iron & Steel industry in Hong Kong. Over the years it has not only transformed the business landscape in the Iron & Steel industry in Hong Kong but also across the existing markets. The ability to lead change has enabled Chongqing Iron Steel Co in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Chongqing Iron Steel Co has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Chongqing Iron Steel Co to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Chongqing Iron Steel Co
– The covid-19 pandemic has put organizational resilience at the centre of everthing Chongqing Iron Steel Co does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses of Chongqing Iron Steel Co | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Chongqing Iron Steel Co are -
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 Chongqing Iron Steel Co supply chain. Even after few cautionary changes, Chongqing Iron Steel Co is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Chongqing Iron Steel Co vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– From the 10K / annual statement of Chongqing Iron Steel Co, it seems that company is thinking out the frontier risks that can impact Iron & Steel 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Chongqing Iron Steel Co is slow explore the new channels of communication. These new channels of communication can help Chongqing Iron Steel Co to provide better information regarding Iron & Steel products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Chongqing Iron Steel Co has a high cash cycle compare to other players in the Iron & Steel industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Skills based hiring in Iron & Steel industry
– The stress on hiring functional specialists at Chongqing Iron Steel Co 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.
Products dominated business model
– Even though Chongqing Iron Steel Co has some of the most successful models in the Iron & Steel industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Chongqing Iron Steel Co should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners in Iron & Steel industry
– because of the regulatory requirements in Hong Kong, Chongqing Iron Steel Co 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 Iron & Steel industry.
Slow to strategic competitive environment developments
– As Chongqing Iron Steel Co is one of the leading players in the Iron & Steel industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Iron & Steel industry in last five years.
Slow decision making process
– As mentioned earlier in the report, Chongqing Iron Steel Co has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Iron & Steel industry over the last five years. Chongqing Iron Steel Co 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.
Increasing silos among functional specialists
– The organizational structure of Chongqing Iron Steel Co is dominated by functional specialists. It is not different from other players in the Iron & Steel industry, but Chongqing Iron Steel Co needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Chongqing Iron Steel Co to focus more on services in the Iron & Steel industry rather than just following the product oriented approach.
Aligning sales with marketing
– From the outside it seems that Chongqing Iron Steel Co needs to have more collaboration between its sales team and marketing team. Sales professionals in the Iron & Steel industry have deep experience in developing customer relationships. Marketing department at Chongqing Iron Steel Co can leverage the sales team experience to cultivate customer relationships as Chongqing Iron Steel Co is planning to shift buying processes online.
Chongqing Iron Steel Co Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Chongqing Iron Steel Co are -
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 Chongqing Iron Steel Co 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.
Loyalty marketing
– Chongqing Iron Steel Co 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.
Leveraging digital technologies
– Chongqing Iron Steel Co 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Chongqing Iron Steel Co in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Iron & Steel industry, and it will provide faster access to the consumers.
Low interest rates
– Even though inflation is raising its head in most developed economies, Chongqing Iron Steel Co 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Iron & Steel industry, but it has also influenced the consumer preferences. Chongqing Iron Steel Co can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Chongqing Iron Steel Co has opened avenues for new revenue streams for the organization in Iron & Steel industry. This can help Chongqing Iron Steel Co to build a more holistic ecosystem for Chongqing Iron Steel Co products in the Iron & Steel industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Chongqing Iron Steel Co has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Iron & Steel sector. This continuous investment in analytics has enabled Chongqing Iron Steel Co to build a competitive advantage using analytics. The analytics driven competitive advantage can help Chongqing Iron Steel Co to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Chongqing Iron Steel Co can improve the customer journey of consumers in the Iron & Steel 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Chongqing Iron Steel Co can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Chongqing Iron Steel Co can develop new processes and procedures in Iron & Steel 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Chongqing Iron Steel Co 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 Chongqing Iron Steel Co 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 Chongqing Iron Steel Co 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 Iron & Steel industry.
Threats Chongqing Iron Steel Co External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Chongqing Iron Steel Co are -
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 Chongqing Iron Steel Co.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Chongqing Iron Steel Co 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 Chongqing Iron Steel Co prominent markets.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Chongqing Iron Steel Co in Iron & Steel industry. The Iron & Steel 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. Chongqing Iron Steel Co needs to understand the core reasons impacting the Iron & Steel industry. This will help it in building a better workplace.
Regulatory challenges
– Chongqing Iron Steel Co 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 Iron & Steel industry regulations.
Shortening product life cycle
– it is one of the major threat that Chongqing Iron Steel Co is facing in Iron & Steel sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Stagnating economy with rate increase
– Chongqing Iron Steel Co 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 Iron & Steel industry.
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 Chongqing Iron Steel Co in the Iron & Steel sector and impact the bottomline of the organization.
Consumer confidence and its impact on Chongqing Iron Steel Co 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 Iron & Steel industry and other sectors.
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 Chongqing Iron Steel Co business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Iron & Steel industry are lowering. It can presents Chongqing Iron Steel Co with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Iron & Steel sector.
Easy access to finance
– Easy access to finance in Iron & Steel industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Chongqing Iron Steel Co 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 Chongqing Iron Steel Co Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Chongqing Iron Steel Co 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 Chongqing Iron Steel Co 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 Chongqing Iron Steel Co 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 Chongqing Iron Steel Co 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 Chongqing Iron Steel Co needs to make to build a sustainable competitive advantage.