China New Higher (2001) SWOT Analysis / TOWS Matrix / MBA Resources
Schools
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for China New Higher (Hong Kong)
Based on various researches at Oak Spring University , China New Higher is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google,
increasing commodity prices, increasing government debt because of Covid-19 spendings, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that China New Higher can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the China New Higher, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which China New Higher 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 New Higher can be done for the following purposes –
1. Strategic planning of China New Higher
2. Improving business portfolio management of China New Higher
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Schools sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of China New Higher
Strengths of China New Higher | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of China New Higher are -
Cross disciplinary teams
– Horizontal connected teams at the China New Higher 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.
Low bargaining power of suppliers
– Suppliers of China New Higher in the Services sector have low bargaining power. China New Higher has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps China New Higher to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of China New Higher in Schools industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– China New Higher has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled China New Higher to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- China New Higher 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 New Higher is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at China New Higher emphasize – knowledge, initiative, and innovation.
Training and development
– China New Higher has one of the best training and development program in Services industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to lead change in Schools
– China New Higher is one of the leading players in the Schools industry in Hong Kong. Over the years it has not only transformed the business landscape in the Schools industry in Hong Kong but also across the existing markets. The ability to lead change has enabled China New Higher in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management in the Schools industry
– China New Higher is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– China New Higher has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Schools industry. Secondly the value chain collaborators of China New Higher have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of China New Higher
– The covid-19 pandemic has put organizational resilience at the centre of everthing China New Higher does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Schools industry
- digital transformation varies from industry to industry. For China New Higher digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. China New Higher 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.
Effective Research and Development (R&D)
– China New Higher has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – China New Higher staying ahead in the Schools industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses of China New Higher | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of China New Higher are -
Compensation and incentives
– The revenue per employee of China New Higher is just above the Schools industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Aligning sales with marketing
– From the outside it seems that China New Higher needs to have more collaboration between its sales team and marketing team. Sales professionals in the Schools industry have deep experience in developing customer relationships. Marketing department at China New Higher can leverage the sales team experience to cultivate customer relationships as China New Higher is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of China New Higher is dominated by functional specialists. It is not different from other players in the Schools industry, but China New Higher needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help China New Higher to focus more on services in the Schools industry rather than just following the product oriented approach.
Employees’ less understanding of China New Higher strategy
– From the outside it seems that the employees of China New Higher 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.
High bargaining power of channel partners in Schools industry
– because of the regulatory requirements in Hong Kong, China New Higher 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 Schools industry.
Skills based hiring in Schools industry
– The stress on hiring functional specialists at China New Higher 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.
Ability to respond to the competition
– As the decision making is very deliberative at China New Higher, in the dynamic environment of Schools industry it has struggled to respond to the nimble upstart competition. China New Higher has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, China New Higher has high operating costs in the Schools industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract China New Higher lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, China New Higher is slow explore the new channels of communication. These new channels of communication can help China New Higher to provide better information regarding Schools products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, China New Higher has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Schools industry over the last five years. China New Higher 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.
Products dominated business model
– Even though China New Higher has some of the most successful models in the Schools industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. China New Higher should strive to include more intangible value offerings along with its core products and services.
China New Higher Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of China New Higher 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 China New Higher 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.
Better consumer reach
– The expansion of the 5G network will help China New Higher to increase its market reach. China New Higher 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Schools industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. China New Higher 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. China New Higher 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.
Creating value in data economy
– The success of analytics program of China New Higher has opened avenues for new revenue streams for the organization in Schools industry. This can help China New Higher to build a more holistic ecosystem for China New Higher products in the Schools industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, China New Higher 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.
Leveraging digital technologies
– China New Higher 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, China New Higher is facing challenges because of the dominance of functional experts in the organization. China New Higher can utilize new technology in the field of Schools industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Using analytics as competitive advantage
– China New Higher has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Schools sector. This continuous investment in analytics has enabled China New Higher to build a competitive advantage using analytics. The analytics driven competitive advantage can help China New Higher to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, China New Higher can use these opportunities to build new business models that can help the communities that China New Higher operates in. Secondly it can use opportunities from government spending in Schools sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for China New Higher in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Schools industry, and it will provide faster access to the consumers.
Loyalty marketing
– China New Higher 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Schools industry, but it has also influenced the consumer preferences. China New Higher can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– China New Higher can use the latest technology developments to improve its manufacturing and designing process in Schools 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.
Threats China New Higher External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of China New Higher are -
Increasing wage structure of China New Higher
– 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 New Higher.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, China New Higher may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Schools sector.
Shortening product life cycle
– it is one of the major threat that China New Higher is facing in Schools sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– China New Higher 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 New Higher can take advantage of this fund but it will also bring new competitors in the Schools industry.
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 New Higher business can come under increasing regulations regarding data privacy, data security, etc.
Easy access to finance
– Easy access to finance in Schools industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. China New Higher can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 New Higher in the Schools sector and impact the bottomline of the organization.
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 New Higher needs to understand the core reasons impacting the Schools industry. This will help it in building a better workplace.
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.
Consumer confidence and its impact on China New Higher 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 Schools industry and other sectors.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, China New Higher 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 China New Higher prominent markets.
Stagnating economy with rate increase
– China New Higher 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 Schools industry.
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. China New Higher 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.
Weighted SWOT Analysis of China New Higher Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at China New Higher 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 New Higher 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 New Higher 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 New Higher 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 New Higher needs to make to build a sustainable competitive advantage.