SWOT Analysis / TOWS Matrix for Tongfang Kontafarma (Hong Kong)
Based on various researches at Oak Spring University , Tongfang Kontafarma is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, increasing transportation and logistics costs, geopolitical disruptions, increasing government debt because of Covid-19 spendings, increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing,
competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Tongfang Kontafarma
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Tongfang Kontafarma can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tongfang Kontafarma, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tongfang Kontafarma 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 Tongfang Kontafarma can be done for the following purposes –
1. Strategic planning of Tongfang Kontafarma
2. Improving business portfolio management of Tongfang Kontafarma
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Construction - Raw Materials sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Tongfang Kontafarma
Strengths of Tongfang Kontafarma | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tongfang Kontafarma are -
Successful track record of launching new products
– Tongfang Kontafarma has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Tongfang Kontafarma 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.
Low bargaining power of suppliers
– Suppliers of Tongfang Kontafarma in the Capital Goods sector have low bargaining power. Tongfang Kontafarma has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tongfang Kontafarma to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Construction - Raw Materials industry
- digital transformation varies from industry to industry. For Tongfang Kontafarma digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Tongfang Kontafarma 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
– Tongfang Kontafarma is present in almost all the verticals within the Construction - Raw Materials industry. This has provided Tongfang Kontafarma 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.
Strong track record of project management in the Construction - Raw Materials industry
– Tongfang Kontafarma is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Tongfang Kontafarma 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 Tongfang Kontafarma is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Tongfang Kontafarma emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Tongfang Kontafarma has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Construction - Raw Materials industry. Secondly the value chain collaborators of Tongfang Kontafarma have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Tongfang Kontafarma has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Tongfang Kontafarma to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Tongfang Kontafarma is one of the most innovative firm in Construction - Raw Materials sector.
High switching costs
– The high switching costs that Tongfang Kontafarma 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.
Sustainable margins compare to other players in Construction - Raw Materials industry
– Tongfang Kontafarma has clearly differentiated products in the market place. This has enabled Tongfang Kontafarma to fetch slight price premium compare to the competitors in the Construction - Raw Materials industry. The sustainable margins have also helped Tongfang Kontafarma to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy of Tongfang Kontafarma comprises – understanding the underlying the factors in the Construction - Raw Materials 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.
Weaknesses of Tongfang Kontafarma | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Tongfang Kontafarma are -
Need for greater diversity
– Tongfang Kontafarma 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.
No frontier risks strategy
– From the 10K / annual statement of Tongfang Kontafarma, it seems that company is thinking out the frontier risks that can impact Construction - Raw Materials 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.
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 Tongfang Kontafarma supply chain. Even after few cautionary changes, Tongfang Kontafarma is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Tongfang Kontafarma vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Tongfang Kontafarma is dominated by functional specialists. It is not different from other players in the Construction - Raw Materials industry, but Tongfang Kontafarma needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Tongfang Kontafarma to focus more on services in the Construction - Raw Materials industry rather than just following the product oriented approach.
High bargaining power of channel partners in Construction - Raw Materials industry
– because of the regulatory requirements in Hong Kong, Tongfang Kontafarma 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 Construction - Raw Materials industry.
Workers concerns about automation
– As automation is fast increasing in the Construction - Raw Materials industry, Tongfang Kontafarma 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.
Slow to strategic competitive environment developments
– As Tongfang Kontafarma is one of the leading players in the Construction - Raw Materials industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Construction - Raw Materials industry in last five years.
Lack of clear differentiation of Tongfang Kontafarma products
– To increase the profitability and margins on the products, Tongfang Kontafarma needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Tongfang Kontafarma has some of the most successful models in the Construction - Raw Materials industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Tongfang Kontafarma should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Tongfang Kontafarma 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.
Slow decision making process
– As mentioned earlier in the report, Tongfang Kontafarma has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Construction - Raw Materials industry over the last five years. Tongfang Kontafarma 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.
Tongfang Kontafarma Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Tongfang Kontafarma are -
Developing new processes and practices
– Tongfang Kontafarma can develop new processes and procedures in Construction - Raw Materials 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.
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 Tongfang Kontafarma 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.
Loyalty marketing
– Tongfang Kontafarma 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.
Buying journey improvements
– Tongfang Kontafarma can improve the customer journey of consumers in the Construction - Raw Materials 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 Tongfang Kontafarma 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 Construction - Raw Materials industry.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Tongfang Kontafarma in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Construction - Raw Materials industry, and it will provide faster access to the consumers.
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. Tongfang Kontafarma can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Tongfang Kontafarma 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.
Manufacturing automation
– Tongfang Kontafarma can use the latest technology developments to improve its manufacturing and designing process in Construction - Raw Materials 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Tongfang Kontafarma can use these opportunities to build new business models that can help the communities that Tongfang Kontafarma operates in. Secondly it can use opportunities from government spending in Construction - Raw Materials sector.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Construction - Raw Materials industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Tongfang Kontafarma 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. Tongfang Kontafarma 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 Tongfang Kontafarma has opened avenues for new revenue streams for the organization in Construction - Raw Materials industry. This can help Tongfang Kontafarma to build a more holistic ecosystem for Tongfang Kontafarma products in the Construction - Raw Materials industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Tongfang Kontafarma can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Tongfang Kontafarma External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Tongfang Kontafarma are -
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Tongfang Kontafarma.
Environmental challenges
– Tongfang Kontafarma 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. Tongfang Kontafarma can take advantage of this fund but it will also bring new competitors in the Construction - Raw Materials industry.
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. Tongfang Kontafarma needs to understand the core reasons impacting the Construction - Raw Materials industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Tongfang Kontafarma in Construction - Raw Materials industry. The Construction - Raw Materials 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.
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. Tongfang Kontafarma 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.
Consumer confidence and its impact on Tongfang Kontafarma 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 Construction - Raw Materials industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Tongfang Kontafarma may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Construction - Raw Materials 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.
Shortening product life cycle
– it is one of the major threat that Tongfang Kontafarma is facing in Construction - Raw Materials sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Construction - Raw Materials industry are lowering. It can presents Tongfang Kontafarma with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Construction - Raw Materials sector.
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.
High dependence on third party suppliers
– Tongfang Kontafarma 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
– Tongfang Kontafarma has witnessed rapid integration of technology during Covid-19 in the Construction - Raw Materials industry. As one of the leading players in the industry, Tongfang Kontafarma needs to keep up with the evolution of technology in the Construction - Raw Materials 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 Tongfang Kontafarma Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Tongfang Kontafarma 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 Tongfang Kontafarma 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 Tongfang Kontafarma 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 Tongfang Kontafarma 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 Tongfang Kontafarma needs to make to build a sustainable competitive advantage.