China MeiDong Auto (1268) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for China MeiDong Auto (Hong Kong)

Based on various researches at Oak Spring University , China MeiDong Auto is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, wage bills are increasing, increasing transportation and logistics costs, increasing energy prices, technology disruption, increasing commodity prices, etc

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Introduction to SWOT Analysis of China MeiDong Auto

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that China MeiDong Auto can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the China MeiDong Auto, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which China MeiDong Auto 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of China MeiDong Auto can be done for the following purposes –
1. Strategic planning of China MeiDong Auto
2. Improving business portfolio management of China MeiDong Auto
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Retail (Specialty) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of China MeiDong Auto

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Strengths of China MeiDong Auto | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of China MeiDong Auto are -

Highly skilled collaborators

– China MeiDong Auto has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Retail (Specialty) industry. Secondly the value chain collaborators of China MeiDong Auto have helped the firm to develop new products and bring them quickly to the marketplace.

Analytics focus

– China MeiDong Auto 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 Retail (Specialty) 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.

Learning organization

- China MeiDong Auto 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 MeiDong Auto is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at China MeiDong Auto emphasize – knowledge, initiative, and innovation.

Training and development

– China MeiDong Auto 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.

Successful track record of launching new products

– China MeiDong Auto has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. China MeiDong Auto 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.

Superior customer experience

– The customer experience strategy of China MeiDong Auto in Retail (Specialty) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Strong track record of project management in the Retail (Specialty) industry

– China MeiDong Auto is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Ability to lead change in Retail (Specialty)

– China MeiDong Auto is one of the leading players in the Retail (Specialty) industry in Hong Kong. Over the years it has not only transformed the business landscape in the Retail (Specialty) industry in Hong Kong but also across the existing markets. The ability to lead change has enabled China MeiDong Auto in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Low bargaining power of suppliers

– Suppliers of China MeiDong Auto in the Services sector have low bargaining power. China MeiDong Auto has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps China MeiDong Auto to manage not only supply disruptions but also source products at highly competitive prices.

Innovation driven organization

– China MeiDong Auto is one of the most innovative firm in Retail (Specialty) sector.

Operational resilience

– The operational resilience strategy of China MeiDong Auto comprises – understanding the underlying the factors in the Retail (Specialty) 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.

Cross disciplinary teams

– Horizontal connected teams at the China MeiDong Auto 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.

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Weaknesses of China MeiDong Auto | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of China MeiDong Auto are -

Need for greater diversity

– China MeiDong Auto 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.

Employees’ less understanding of China MeiDong Auto strategy

– From the outside it seems that the employees of China MeiDong Auto 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 harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, China MeiDong Auto is slow explore the new channels of communication. These new channels of communication can help China MeiDong Auto to provide better information regarding Retail (Specialty) products and services. It can also build an online community to further reach out to potential customers.

Lack of clear differentiation of China MeiDong Auto products

– To increase the profitability and margins on the products, China MeiDong Auto needs to provide more differentiated products than what it is currently offering in the marketplace.

High operating costs

– Compare to the competitors, China MeiDong Auto has high operating costs in the Retail (Specialty) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract China MeiDong Auto lucrative customers.

Increasing silos among functional specialists

– The organizational structure of China MeiDong Auto is dominated by functional specialists. It is not different from other players in the Retail (Specialty) industry, but China MeiDong Auto needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help China MeiDong Auto to focus more on services in the Retail (Specialty) industry rather than just following the product oriented approach.

Workers concerns about automation

– As automation is fast increasing in the Retail (Specialty) industry, China MeiDong Auto 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.

Aligning sales with marketing

– From the outside it seems that China MeiDong Auto needs to have more collaboration between its sales team and marketing team. Sales professionals in the Retail (Specialty) industry have deep experience in developing customer relationships. Marketing department at China MeiDong Auto can leverage the sales team experience to cultivate customer relationships as China MeiDong Auto is planning to shift buying processes online.

Capital Spending Reduction

– Even during the low interest decade, China MeiDong Auto 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 Retail (Specialty) industry using digital technology.

Interest costs

– Compare to the competition, China MeiDong Auto 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 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 China MeiDong Auto supply chain. Even after few cautionary changes, China MeiDong Auto is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left China MeiDong Auto vulnerable to further global disruptions in South East Asia.

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China MeiDong Auto Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of China MeiDong Auto are -

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, China MeiDong Auto 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 MeiDong Auto to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Redefining models of collaboration and team work

– As explained in the weaknesses section, China MeiDong Auto is facing challenges because of the dominance of functional experts in the organization. China MeiDong Auto can utilize new technology in the field of Retail (Specialty) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, 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 MeiDong Auto 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for China MeiDong Auto in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Retail (Specialty) industry, and it will provide faster access to the consumers.

Developing new processes and practices

– China MeiDong Auto can develop new processes and procedures in Retail (Specialty) 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.

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. China MeiDong Auto can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Learning at scale

– Online learning technologies has now opened space for China MeiDong Auto 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, China MeiDong Auto can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Retail (Specialty) industry, but it has also influenced the consumer preferences. China MeiDong Auto can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Creating value in data economy

– The success of analytics program of China MeiDong Auto has opened avenues for new revenue streams for the organization in Retail (Specialty) industry. This can help China MeiDong Auto to build a more holistic ecosystem for China MeiDong Auto products in the Retail (Specialty) industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Buying journey improvements

– China MeiDong Auto can improve the customer journey of consumers in the Retail (Specialty) 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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for China MeiDong Auto 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 China MeiDong Auto to hire the very best people irrespective of their geographical location.

Using analytics as competitive advantage

– China MeiDong Auto has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Retail (Specialty) sector. This continuous investment in analytics has enabled China MeiDong Auto to build a competitive advantage using analytics. The analytics driven competitive advantage can help China MeiDong Auto to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

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Threats China MeiDong Auto External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of China MeiDong Auto are -

Stagnating economy with rate increase

– China MeiDong Auto 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 Retail (Specialty) industry.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for China MeiDong Auto in Retail (Specialty) industry. The Retail (Specialty) 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.

Consumer confidence and its impact on China MeiDong Auto 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 Retail (Specialty) industry and other sectors.

Technology acceleration in Forth Industrial Revolution

– China MeiDong Auto has witnessed rapid integration of technology during Covid-19 in the Retail (Specialty) industry. As one of the leading players in the industry, China MeiDong Auto needs to keep up with the evolution of technology in the Retail (Specialty) 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.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Retail (Specialty) industry are lowering. It can presents China MeiDong Auto with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Retail (Specialty) sector.

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 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.

Regulatory challenges

– China MeiDong Auto 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 Retail (Specialty) industry regulations.

Environmental challenges

– China MeiDong Auto 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 MeiDong Auto can take advantage of this fund but it will also bring new competitors in the Retail (Specialty) industry.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, China MeiDong Auto 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 MeiDong Auto prominent markets.

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 MeiDong Auto business can come under increasing regulations regarding data privacy, data security, etc.

High dependence on third party suppliers

– China MeiDong Auto 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.

Shortening product life cycle

– it is one of the major threat that China MeiDong Auto is facing in Retail (Specialty) sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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Weighted SWOT Analysis of China MeiDong Auto Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at China MeiDong Auto 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 MeiDong Auto 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 MeiDong Auto 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 MeiDong Auto 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 MeiDong Auto needs to make to build a sustainable competitive advantage.

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