China XLX Fertiliser (1866) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for China XLX Fertiliser (Hong Kong)

Based on various researches at Oak Spring University , China XLX Fertiliser is operating in a macro-environment that has been destablized by – there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, geopolitical disruptions, technology disruption, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, etc

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Introduction to SWOT Analysis of China XLX Fertiliser

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that China XLX Fertiliser can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the China XLX Fertiliser, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which China XLX Fertiliser 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 XLX Fertiliser can be done for the following purposes –
1. Strategic planning of China XLX Fertiliser
2. Improving business portfolio management of China XLX Fertiliser
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Chemical Manufacturing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of China XLX Fertiliser

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

The strengths of China XLX Fertiliser are -

Low bargaining power of suppliers

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

Training and development

– China XLX Fertiliser has one of the best training and development program in Basic Materials industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.

High switching costs

– The high switching costs that China XLX Fertiliser has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.

Organizational Resilience of China XLX Fertiliser

– The covid-19 pandemic has put organizational resilience at the centre of everthing China XLX Fertiliser does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Successful track record of launching new products

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

Sustainable margins compare to other players in Chemical Manufacturing industry

– China XLX Fertiliser has clearly differentiated products in the market place. This has enabled China XLX Fertiliser to fetch slight price premium compare to the competitors in the Chemical Manufacturing industry. The sustainable margins have also helped China XLX Fertiliser to invest into research and development (R&D) and innovation.

Innovation driven organization

– China XLX Fertiliser is one of the most innovative firm in Chemical Manufacturing sector.

Cross disciplinary teams

– Horizontal connected teams at the China XLX Fertiliser 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.

Effective Research and Development (R&D)

– China XLX Fertiliser has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – China XLX Fertiliser staying ahead in the Chemical Manufacturing industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

High brand equity

– China XLX Fertiliser has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled China XLX Fertiliser to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Ability to recruit top talent

– China XLX Fertiliser is one of the leading players in the Chemical Manufacturing 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.

Diverse revenue streams

– China XLX Fertiliser is present in almost all the verticals within the Chemical Manufacturing industry. This has provided China XLX Fertiliser 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.

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

The weaknesses of China XLX Fertiliser are -

Employees’ less understanding of China XLX Fertiliser strategy

– From the outside it seems that the employees of China XLX Fertiliser 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.

Lack of clear differentiation of China XLX Fertiliser products

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

Ability to respond to the competition

– As the decision making is very deliberative at China XLX Fertiliser, in the dynamic environment of Chemical Manufacturing industry it has struggled to respond to the nimble upstart competition. China XLX Fertiliser has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

High dependence on China XLX Fertiliser ‘s star products

– The top 2 products and services of China XLX Fertiliser still accounts for major business revenue. This dependence on star products in Chemical Manufacturing industry has resulted into insufficient focus on developing new products, even though China XLX Fertiliser has relatively successful track record of launching new products.

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

Compensation and incentives

– The revenue per employee of China XLX Fertiliser is just above the Chemical Manufacturing 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.

Interest costs

– Compare to the competition, China XLX Fertiliser 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 bargaining power of channel partners in Chemical Manufacturing industry

– because of the regulatory requirements in Hong Kong, China XLX Fertiliser 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 Chemical Manufacturing industry.

Slow to strategic competitive environment developments

– As China XLX Fertiliser is one of the leading players in the Chemical Manufacturing industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Chemical Manufacturing industry in last five years.

High cash cycle compare to competitors

China XLX Fertiliser has a high cash cycle compare to other players in the Chemical Manufacturing industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Aligning sales with marketing

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

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

The opportunities of China XLX Fertiliser are -

Manufacturing automation

– China XLX Fertiliser can use the latest technology developments to improve its manufacturing and designing process in Chemical Manufacturing 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, China XLX Fertiliser 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 XLX Fertiliser 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 XLX Fertiliser 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects China XLX Fertiliser can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Building a culture of innovation

– managers at China XLX Fertiliser 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 Chemical Manufacturing industry.

Learning at scale

– Online learning technologies has now opened space for China XLX Fertiliser 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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Chemical Manufacturing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. China XLX Fertiliser 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 XLX Fertiliser 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.

Using analytics as competitive advantage

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

Remote work and new talent hiring opportunities

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

Identify volunteer opportunities

– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. China XLX Fertiliser can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Developing new processes and practices

– China XLX Fertiliser can develop new processes and procedures in Chemical Manufacturing 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.

Buying journey improvements

– China XLX Fertiliser can improve the customer journey of consumers in the Chemical Manufacturing 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.

Leveraging digital technologies

– China XLX Fertiliser 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.

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Threats China XLX Fertiliser External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of China XLX Fertiliser are -

High dependence on third party suppliers

– China XLX Fertiliser 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.

Technology acceleration in Forth Industrial Revolution

– China XLX Fertiliser has witnessed rapid integration of technology during Covid-19 in the Chemical Manufacturing industry. As one of the leading players in the industry, China XLX Fertiliser needs to keep up with the evolution of technology in the Chemical Manufacturing 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.

Regulatory challenges

– China XLX Fertiliser 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 Chemical Manufacturing industry regulations.

Increasing wage structure of China XLX Fertiliser

– 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 XLX Fertiliser.

Environmental challenges

– China XLX Fertiliser 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 XLX Fertiliser can take advantage of this fund but it will also bring new competitors in the Chemical Manufacturing industry.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for China XLX Fertiliser in Chemical Manufacturing industry. The Chemical Manufacturing 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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, China XLX Fertiliser may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Chemical Manufacturing sector.

Consumer confidence and its impact on China XLX Fertiliser 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 Chemical Manufacturing industry and other sectors.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, China XLX Fertiliser 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 XLX Fertiliser prominent markets.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Chemical Manufacturing industry are lowering. It can presents China XLX Fertiliser with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Chemical Manufacturing sector.

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 XLX Fertiliser.

Stagnating economy with rate increase

– China XLX Fertiliser 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 Chemical Manufacturing industry.

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.

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Weighted SWOT Analysis of China XLX Fertiliser Template, Example

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

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