Based on various researches at Oak Spring University , Zhengzhou Coal Mining Machinery is operating in a macro-environment that has been destablized by – increasing commodity prices, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Zhengzhou Coal Mining Machinery
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Zhengzhou Coal Mining Machinery can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Zhengzhou Coal Mining Machinery, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Zhengzhou Coal Mining Machinery 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 Zhengzhou Coal Mining Machinery can be done for the following purposes –
1. Strategic planning of Zhengzhou Coal Mining Machinery
2. Improving business portfolio management of Zhengzhou Coal Mining Machinery
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Misc. Capital Goods sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Zhengzhou Coal Mining Machinery
Strengths of Zhengzhou Coal Mining Machinery | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Zhengzhou Coal Mining Machinery are -
Cross disciplinary teams
– Horizontal connected teams at the Zhengzhou Coal Mining Machinery 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.
Training and development
– Zhengzhou Coal Mining Machinery has one of the best training and development program in Capital Goods 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 brand equity
– Zhengzhou Coal Mining Machinery has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Zhengzhou Coal Mining Machinery to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Zhengzhou Coal Mining Machinery is one of the most innovative firm in Misc. Capital Goods sector.
Effective Research and Development (R&D)
– Zhengzhou Coal Mining Machinery has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Zhengzhou Coal Mining Machinery staying ahead in the Misc. Capital Goods industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Zhengzhou Coal Mining Machinery has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Zhengzhou Coal Mining Machinery 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.
Learning organization
- Zhengzhou Coal Mining Machinery 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 Zhengzhou Coal Mining Machinery is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Zhengzhou Coal Mining Machinery emphasize – knowledge, initiative, and innovation.
Ability to lead change in Misc. Capital Goods
– Zhengzhou Coal Mining Machinery is one of the leading players in the Misc. Capital Goods industry in Hong Kong. Over the years it has not only transformed the business landscape in the Misc. Capital Goods industry in Hong Kong but also across the existing markets. The ability to lead change has enabled Zhengzhou Coal Mining Machinery in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Zhengzhou Coal Mining Machinery 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 Misc. Capital Goods 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.
Digital Transformation in Misc. Capital Goods industry
- digital transformation varies from industry to industry. For Zhengzhou Coal Mining Machinery digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Zhengzhou Coal Mining Machinery 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.
Diverse revenue streams
– Zhengzhou Coal Mining Machinery is present in almost all the verticals within the Misc. Capital Goods industry. This has provided Zhengzhou Coal Mining Machinery 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.
Organizational Resilience of Zhengzhou Coal Mining Machinery
– The covid-19 pandemic has put organizational resilience at the centre of everthing Zhengzhou Coal Mining Machinery does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses of Zhengzhou Coal Mining Machinery | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Zhengzhou Coal Mining Machinery are -
Products dominated business model
– Even though Zhengzhou Coal Mining Machinery has some of the most successful models in the Misc. Capital Goods industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Zhengzhou Coal Mining Machinery should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– From the 10K / annual statement of Zhengzhou Coal Mining Machinery, it seems that company is thinking out the frontier risks that can impact Misc. Capital Goods 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.
Need for greater diversity
– Zhengzhou Coal Mining Machinery 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.
High dependence on Zhengzhou Coal Mining Machinery ‘s star products
– The top 2 products and services of Zhengzhou Coal Mining Machinery still accounts for major business revenue. This dependence on star products in Misc. Capital Goods industry has resulted into insufficient focus on developing new products, even though Zhengzhou Coal Mining Machinery has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative at Zhengzhou Coal Mining Machinery, in the dynamic environment of Misc. Capital Goods industry it has struggled to respond to the nimble upstart competition. Zhengzhou Coal Mining Machinery 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, Zhengzhou Coal Mining Machinery is slow explore the new channels of communication. These new channels of communication can help Zhengzhou Coal Mining Machinery to provide better information regarding Misc. Capital Goods products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Zhengzhou Coal Mining Machinery 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.
Employees’ less understanding of Zhengzhou Coal Mining Machinery strategy
– From the outside it seems that the employees of Zhengzhou Coal Mining Machinery 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.
Slow to strategic competitive environment developments
– As Zhengzhou Coal Mining Machinery is one of the leading players in the Misc. Capital Goods industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Misc. Capital Goods industry in last five years.
Slow decision making process
– As mentioned earlier in the report, Zhengzhou Coal Mining Machinery has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Misc. Capital Goods industry over the last five years. Zhengzhou Coal Mining Machinery 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.
Compensation and incentives
– The revenue per employee of Zhengzhou Coal Mining Machinery is just above the Misc. Capital Goods 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.
Zhengzhou Coal Mining Machinery Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Zhengzhou Coal Mining Machinery are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Zhengzhou Coal Mining Machinery can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Use of Bitcoin and other crypto currencies for transactions in Misc. Capital Goods industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Zhengzhou Coal Mining Machinery in the Misc. Capital Goods industry. Now Zhengzhou Coal Mining Machinery can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Zhengzhou Coal Mining Machinery to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Loyalty marketing
– Zhengzhou Coal Mining Machinery 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Misc. Capital Goods industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Zhengzhou Coal Mining Machinery can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Zhengzhou Coal Mining Machinery can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Better consumer reach
– The expansion of the 5G network will help Zhengzhou Coal Mining Machinery to increase its market reach. Zhengzhou Coal Mining Machinery 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.
Buying journey improvements
– Zhengzhou Coal Mining Machinery can improve the customer journey of consumers in the Misc. Capital Goods 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.
Building a culture of innovation
– managers at Zhengzhou Coal Mining Machinery 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 Misc. Capital Goods industry.
Creating value in data economy
– The success of analytics program of Zhengzhou Coal Mining Machinery has opened avenues for new revenue streams for the organization in Misc. Capital Goods industry. This can help Zhengzhou Coal Mining Machinery to build a more holistic ecosystem for Zhengzhou Coal Mining Machinery products in the Misc. Capital Goods industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Zhengzhou Coal Mining Machinery can use the latest technology developments to improve its manufacturing and designing process in Misc. Capital Goods 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.
Leveraging digital technologies
– Zhengzhou Coal Mining Machinery 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Zhengzhou Coal Mining Machinery can use these opportunities to build new business models that can help the communities that Zhengzhou Coal Mining Machinery operates in. Secondly it can use opportunities from government spending in Misc. Capital Goods sector.
Using analytics as competitive advantage
– Zhengzhou Coal Mining Machinery has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Misc. Capital Goods sector. This continuous investment in analytics has enabled Zhengzhou Coal Mining Machinery to build a competitive advantage using analytics. The analytics driven competitive advantage can help Zhengzhou Coal Mining Machinery to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Zhengzhou Coal Mining Machinery External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Zhengzhou Coal Mining Machinery are -
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.
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 Zhengzhou Coal Mining Machinery business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Zhengzhou Coal Mining Machinery is facing in Misc. Capital Goods sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Zhengzhou Coal Mining Machinery 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 Misc. Capital Goods industry and other sectors.
High dependence on third party suppliers
– Zhengzhou Coal Mining Machinery 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.
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 Zhengzhou Coal Mining Machinery.
Environmental challenges
– Zhengzhou Coal Mining Machinery 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. Zhengzhou Coal Mining Machinery can take advantage of this fund but it will also bring new competitors in the Misc. Capital Goods industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Zhengzhou Coal Mining Machinery in Misc. Capital Goods industry. The Misc. Capital Goods 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.
Increasing wage structure of Zhengzhou Coal Mining Machinery
– 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 Zhengzhou Coal Mining Machinery.
Stagnating economy with rate increase
– Zhengzhou Coal Mining Machinery 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 Misc. Capital Goods industry.
Regulatory challenges
– Zhengzhou Coal Mining Machinery 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 Misc. Capital Goods 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.
Technology acceleration in Forth Industrial Revolution
– Zhengzhou Coal Mining Machinery has witnessed rapid integration of technology during Covid-19 in the Misc. Capital Goods industry. As one of the leading players in the industry, Zhengzhou Coal Mining Machinery needs to keep up with the evolution of technology in the Misc. Capital Goods 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.
Weighted SWOT Analysis of Zhengzhou Coal Mining Machinery Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Zhengzhou Coal Mining Machinery 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 Zhengzhou Coal Mining Machinery 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 Zhengzhou Coal Mining Machinery 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 Zhengzhou Coal Mining Machinery 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 Zhengzhou Coal Mining Machinery needs to make to build a sustainable competitive advantage.