China Agri-Industries (606) SWOT Analysis / TOWS Matrix / MBA Resources
Crops
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for China Agri-Industries (Hong Kong)
Based on various researches at Oak Spring University , China Agri-Industries is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, increasing transportation and logistics costs,
wage bills are increasing, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of China Agri-Industries
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that China Agri-Industries can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the China Agri-Industries, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which China Agri-Industries 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 China Agri-Industries can be done for the following purposes –
1. Strategic planning of China Agri-Industries
2. Improving business portfolio management of China Agri-Industries
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Crops sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of China Agri-Industries
Strengths of China Agri-Industries | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of China Agri-Industries are -
Training and development
– China Agri-Industries has one of the best training and development program in Consumer/Non-Cyclical 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.
Sustainable margins compare to other players in Crops industry
– China Agri-Industries has clearly differentiated products in the market place. This has enabled China Agri-Industries to fetch slight price premium compare to the competitors in the Crops industry. The sustainable margins have also helped China Agri-Industries to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of China Agri-Industries in the Consumer/Non-Cyclical sector have low bargaining power. China Agri-Industries has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps China Agri-Industries to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– China Agri-Industries is one of the most innovative firm in Crops sector.
Highly skilled collaborators
– China Agri-Industries has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Crops industry. Secondly the value chain collaborators of China Agri-Industries have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the China Agri-Industries 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 Crops industry
- digital transformation varies from industry to industry. For China Agri-Industries digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. China Agri-Industries 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.
Superior customer experience
– The customer experience strategy of China Agri-Industries in Crops industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy of China Agri-Industries comprises – understanding the underlying the factors in the Crops 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.
Analytics focus
– China Agri-Industries 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 Crops 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 recruit top talent
– China Agri-Industries is one of the leading players in the Crops industry in Hong Kong. It is in a position to attract the best talent available in Hong Kong. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- China Agri-Industries 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 Agri-Industries is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at China Agri-Industries emphasize – knowledge, initiative, and innovation.
Weaknesses of China Agri-Industries | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of China Agri-Industries are -
Slow to strategic competitive environment developments
– As China Agri-Industries is one of the leading players in the Crops industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Crops industry in last five years.
Skills based hiring in Crops industry
– The stress on hiring functional specialists at China Agri-Industries 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.
Increasing silos among functional specialists
– The organizational structure of China Agri-Industries is dominated by functional specialists. It is not different from other players in the Crops industry, but China Agri-Industries needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help China Agri-Industries to focus more on services in the Crops industry rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative at China Agri-Industries, in the dynamic environment of Crops industry it has struggled to respond to the nimble upstart competition. China Agri-Industries 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, China Agri-Industries is slow explore the new channels of communication. These new channels of communication can help China Agri-Industries to provide better information regarding Crops products and services. It can also build an online community to further reach out to potential customers.
High bargaining power of channel partners in Crops industry
– because of the regulatory requirements in Hong Kong, China Agri-Industries 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 Crops industry.
Interest costs
– Compare to the competition, China Agri-Industries 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.
High cash cycle compare to competitors
China Agri-Industries has a high cash cycle compare to other players in the Crops industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Low market penetration in new markets
– Outside its home market of Hong Kong, China Agri-Industries needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, China Agri-Industries has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Crops industry using digital technology.
Employees’ less understanding of China Agri-Industries strategy
– From the outside it seems that the employees of China Agri-Industries 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.
China Agri-Industries Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of China Agri-Industries are -
Better consumer reach
– The expansion of the 5G network will help China Agri-Industries to increase its market reach. China Agri-Industries 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, China Agri-Industries is facing challenges because of the dominance of functional experts in the organization. China Agri-Industries can utilize new technology in the field of Crops industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Crops industry, but it has also influenced the consumer preferences. China Agri-Industries can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, China Agri-Industries 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.
Manufacturing automation
– China Agri-Industries can use the latest technology developments to improve its manufacturing and designing process in Crops sector. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Lowering marketing communication costs
– 5G expansion will open new opportunities for China Agri-Industries in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Crops industry, and it will provide faster access to the consumers.
Use of Bitcoin and other crypto currencies for transactions in Crops industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for China Agri-Industries in the Crops industry. Now China Agri-Industries can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– China Agri-Industries 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, China Agri-Industries 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 Agri-Industries to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– China Agri-Industries 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.
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 Agri-Industries 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.
Using analytics as competitive advantage
– China Agri-Industries has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Crops sector. This continuous investment in analytics has enabled China Agri-Industries to build a competitive advantage using analytics. The analytics driven competitive advantage can help China Agri-Industries to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects China Agri-Industries can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats China Agri-Industries External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of China Agri-Industries 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 China Agri-Industries.
Shortening product life cycle
– it is one of the major threat that China Agri-Industries is facing in Crops sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Agri-Industries in the Crops sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– China Agri-Industries has witnessed rapid integration of technology during Covid-19 in the Crops industry. As one of the leading players in the industry, China Agri-Industries needs to keep up with the evolution of technology in the Crops 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.
Environmental challenges
– China Agri-Industries 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 Agri-Industries can take advantage of this fund but it will also bring new competitors in the Crops industry.
Regulatory challenges
– China Agri-Industries 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 Crops industry regulations.
Increasing wage structure of China Agri-Industries
– 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 Agri-Industries.
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 Agri-Industries needs to understand the core reasons impacting the Crops industry. This will help it in building a better workplace.
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 Agri-Industries business can come under increasing regulations regarding data privacy, data security, etc.
Easy access to finance
– Easy access to finance in Crops industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. China Agri-Industries can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on China Agri-Industries 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 Crops industry and other sectors.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, China Agri-Industries may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Crops sector.
Weighted SWOT Analysis of China Agri-Industries Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at China Agri-Industries 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 Agri-Industries 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 Agri-Industries 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 Agri-Industries 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 Agri-Industries needs to make to build a sustainable competitive advantage.
