Based on various researches at Oak Spring University , Kingsoft Corp Ltd is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, wage bills are increasing, increasing energy prices, supply chains are disrupted by pandemic , increasing commodity prices, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google,
geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Kingsoft Corp Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Kingsoft Corp Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kingsoft Corp Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kingsoft Corp Ltd 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 Kingsoft Corp Ltd can be done for the following purposes –
1. Strategic planning of Kingsoft Corp Ltd
2. Improving business portfolio management of Kingsoft Corp Ltd
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Software & Programming sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Kingsoft Corp Ltd
Strengths of Kingsoft Corp Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kingsoft Corp Ltd are -
Effective Research and Development (R&D)
– Kingsoft Corp Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Kingsoft Corp Ltd staying ahead in the Software & Programming industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Kingsoft Corp Ltd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Kingsoft Corp Ltd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Kingsoft Corp Ltd 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 Kingsoft Corp Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Kingsoft Corp Ltd emphasize – knowledge, initiative, and innovation.
Ability to lead change in Software & Programming
– Kingsoft Corp Ltd is one of the leading players in the Software & Programming industry in Hong Kong. Over the years it has not only transformed the business landscape in the Software & Programming industry in Hong Kong but also across the existing markets. The ability to lead change has enabled Kingsoft Corp Ltd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Kingsoft Corp Ltd
– The covid-19 pandemic has put organizational resilience at the centre of everthing Kingsoft Corp Ltd does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Kingsoft Corp Ltd in Software & Programming industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Kingsoft Corp Ltd has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Software & Programming industry. Secondly the value chain collaborators of Kingsoft Corp Ltd have helped the firm to develop new products and bring them quickly to the marketplace.
Sustainable margins compare to other players in Software & Programming industry
– Kingsoft Corp Ltd has clearly differentiated products in the market place. This has enabled Kingsoft Corp Ltd to fetch slight price premium compare to the competitors in the Software & Programming industry. The sustainable margins have also helped Kingsoft Corp Ltd to invest into research and development (R&D) and innovation.
Digital Transformation in Software & Programming industry
- digital transformation varies from industry to industry. For Kingsoft Corp Ltd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Kingsoft Corp Ltd 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.
Successful track record of launching new products
– Kingsoft Corp Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Kingsoft Corp Ltd 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.
Training and development
– Kingsoft Corp Ltd has one of the best training and development program in Technology 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.
High switching costs
– The high switching costs that Kingsoft Corp Ltd 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 Kingsoft Corp Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kingsoft Corp Ltd are -
Slow decision making process
– As mentioned earlier in the report, Kingsoft Corp Ltd has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Software & Programming industry over the last five years. Kingsoft Corp Ltd 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.
Aligning sales with marketing
– From the outside it seems that Kingsoft Corp Ltd needs to have more collaboration between its sales team and marketing team. Sales professionals in the Software & Programming industry have deep experience in developing customer relationships. Marketing department at Kingsoft Corp Ltd can leverage the sales team experience to cultivate customer relationships as Kingsoft Corp Ltd is planning to shift buying processes online.
No frontier risks strategy
– From the 10K / annual statement of Kingsoft Corp Ltd, it seems that company is thinking out the frontier risks that can impact Software & Programming 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.
Lack of clear differentiation of Kingsoft Corp Ltd products
– To increase the profitability and margins on the products, Kingsoft Corp Ltd needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative at Kingsoft Corp Ltd, in the dynamic environment of Software & Programming industry it has struggled to respond to the nimble upstart competition. Kingsoft Corp Ltd has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Kingsoft Corp Ltd is slow explore the new channels of communication. These new channels of communication can help Kingsoft Corp Ltd to provide better information regarding Software & Programming products and services. It can also build an online community to further reach out to potential customers.
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 Kingsoft Corp Ltd supply chain. Even after few cautionary changes, Kingsoft Corp Ltd is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Kingsoft Corp Ltd vulnerable to further global disruptions in South East Asia.
High dependence on Kingsoft Corp Ltd ‘s star products
– The top 2 products and services of Kingsoft Corp Ltd still accounts for major business revenue. This dependence on star products in Software & Programming industry has resulted into insufficient focus on developing new products, even though Kingsoft Corp Ltd has relatively successful track record of launching new products.
High bargaining power of channel partners in Software & Programming industry
– because of the regulatory requirements in Hong Kong, Kingsoft Corp Ltd 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 Software & Programming industry.
Workers concerns about automation
– As automation is fast increasing in the Software & Programming industry, Kingsoft Corp Ltd 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.
Employees’ less understanding of Kingsoft Corp Ltd strategy
– From the outside it seems that the employees of Kingsoft Corp Ltd 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.
Kingsoft Corp Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Kingsoft Corp Ltd are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Kingsoft Corp Ltd 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 Kingsoft Corp Ltd to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Kingsoft Corp Ltd 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Software & Programming industry, but it has also influenced the consumer preferences. Kingsoft Corp Ltd can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Kingsoft Corp Ltd 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.
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 Kingsoft Corp Ltd 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
– Kingsoft Corp Ltd 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Kingsoft Corp Ltd can use these opportunities to build new business models that can help the communities that Kingsoft Corp Ltd operates in. Secondly it can use opportunities from government spending in Software & Programming sector.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Kingsoft Corp Ltd 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 Kingsoft Corp Ltd to hire the very best people irrespective of their geographical location.
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. Kingsoft Corp Ltd can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Kingsoft Corp Ltd can develop new processes and procedures in Software & Programming 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 Kingsoft Corp Ltd can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Kingsoft Corp Ltd to increase its market reach. Kingsoft Corp Ltd will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Kingsoft Corp Ltd in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Software & Programming industry, and it will provide faster access to the consumers.
Threats Kingsoft Corp Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Kingsoft Corp Ltd are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kingsoft Corp Ltd 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 Kingsoft Corp Ltd prominent markets.
High dependence on third party suppliers
– Kingsoft Corp Ltd 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.
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 Kingsoft Corp Ltd business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Kingsoft Corp Ltd 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 Software & Programming industry and other sectors.
Environmental challenges
– Kingsoft Corp Ltd 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. Kingsoft Corp Ltd can take advantage of this fund but it will also bring new competitors in the Software & Programming industry.
Regulatory challenges
– Kingsoft Corp Ltd 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 Software & Programming industry regulations.
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. Kingsoft Corp Ltd needs to understand the core reasons impacting the Software & Programming industry. This will help it in building a better workplace.
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. Kingsoft Corp Ltd 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Kingsoft Corp Ltd in Software & Programming industry. The Software & Programming 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.
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 Kingsoft Corp Ltd in the Software & Programming sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Kingsoft Corp Ltd has witnessed rapid integration of technology during Covid-19 in the Software & Programming industry. As one of the leading players in the industry, Kingsoft Corp Ltd needs to keep up with the evolution of technology in the Software & Programming 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Kingsoft Corp Ltd may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Software & Programming sector.
Weighted SWOT Analysis of Kingsoft Corp Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Kingsoft Corp Ltd 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 Kingsoft Corp Ltd 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 Kingsoft Corp Ltd 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 Kingsoft Corp Ltd 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 Kingsoft Corp Ltd needs to make to build a sustainable competitive advantage.