Luzhou Xinglu Water (2281) SWOT Analysis / TOWS Matrix / MBA Resources
Water Utilities
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Luzhou Xinglu Water (Hong Kong)
Based on various researches at Oak Spring University , Luzhou Xinglu Water is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , wage bills are increasing, cloud computing is disrupting traditional business models,
challanges to central banks by blockchain based private currencies, technology disruption, etc
Introduction to SWOT Analysis of Luzhou Xinglu Water
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Luzhou Xinglu Water can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Luzhou Xinglu Water, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Luzhou Xinglu Water 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 Luzhou Xinglu Water can be done for the following purposes –
1. Strategic planning of Luzhou Xinglu Water
2. Improving business portfolio management of Luzhou Xinglu Water
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Water Utilities sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Luzhou Xinglu Water
Strengths of Luzhou Xinglu Water | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Luzhou Xinglu Water are -
Low bargaining power of suppliers
– Suppliers of Luzhou Xinglu Water in the Utilities sector have low bargaining power. Luzhou Xinglu Water has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Luzhou Xinglu Water to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Water Utilities
– Luzhou Xinglu Water is one of the leading players in the Water Utilities industry in Hong Kong. Over the years it has not only transformed the business landscape in the Water Utilities industry in Hong Kong but also across the existing markets. The ability to lead change has enabled Luzhou Xinglu Water in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Luzhou Xinglu Water has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Water Utilities industry. Secondly the value chain collaborators of Luzhou Xinglu Water have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Luzhou Xinglu Water in Water Utilities industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Water Utilities industry
- digital transformation varies from industry to industry. For Luzhou Xinglu Water digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Luzhou Xinglu Water 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.
Sustainable margins compare to other players in Water Utilities industry
– Luzhou Xinglu Water has clearly differentiated products in the market place. This has enabled Luzhou Xinglu Water to fetch slight price premium compare to the competitors in the Water Utilities industry. The sustainable margins have also helped Luzhou Xinglu Water to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Luzhou Xinglu Water is present in almost all the verticals within the Water Utilities industry. This has provided Luzhou Xinglu Water 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.
Ability to recruit top talent
– Luzhou Xinglu Water is one of the leading players in the Water Utilities 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.
Innovation driven organization
– Luzhou Xinglu Water is one of the most innovative firm in Water Utilities sector.
Organizational Resilience of Luzhou Xinglu Water
– The covid-19 pandemic has put organizational resilience at the centre of everthing Luzhou Xinglu Water does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Luzhou Xinglu Water has one of the best training and development program in Utilities 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.
Learning organization
- Luzhou Xinglu Water 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 Luzhou Xinglu Water is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Luzhou Xinglu Water emphasize – knowledge, initiative, and innovation.
Weaknesses of Luzhou Xinglu Water | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Luzhou Xinglu Water are -
High dependence on Luzhou Xinglu Water ‘s star products
– The top 2 products and services of Luzhou Xinglu Water still accounts for major business revenue. This dependence on star products in Water Utilities industry has resulted into insufficient focus on developing new products, even though Luzhou Xinglu Water has relatively successful track record of launching new products.
Employees’ less understanding of Luzhou Xinglu Water strategy
– From the outside it seems that the employees of Luzhou Xinglu Water 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, Luzhou Xinglu Water is slow explore the new channels of communication. These new channels of communication can help Luzhou Xinglu Water to provide better information regarding Water Utilities products and services. It can also build an online community to further reach out to potential customers.
High bargaining power of channel partners in Water Utilities industry
– because of the regulatory requirements in Hong Kong, Luzhou Xinglu Water 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 Water Utilities industry.
High cash cycle compare to competitors
Luzhou Xinglu Water has a high cash cycle compare to other players in the Water Utilities industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Compensation and incentives
– The revenue per employee of Luzhou Xinglu Water is just above the Water Utilities 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.
Low market penetration in new markets
– Outside its home market of Hong Kong, Luzhou Xinglu Water needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative at Luzhou Xinglu Water, in the dynamic environment of Water Utilities industry it has struggled to respond to the nimble upstart competition. Luzhou Xinglu Water has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Luzhou Xinglu Water 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.
Workers concerns about automation
– As automation is fast increasing in the Water Utilities industry, Luzhou Xinglu Water 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.
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 Luzhou Xinglu Water supply chain. Even after few cautionary changes, Luzhou Xinglu Water is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Luzhou Xinglu Water vulnerable to further global disruptions in South East Asia.
Luzhou Xinglu Water Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Luzhou Xinglu Water are -
Developing new processes and practices
– Luzhou Xinglu Water can develop new processes and procedures in Water Utilities 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.
Manufacturing automation
– Luzhou Xinglu Water can use the latest technology developments to improve its manufacturing and designing process in Water Utilities 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, Luzhou Xinglu Water can use these opportunities to build new business models that can help the communities that Luzhou Xinglu Water operates in. Secondly it can use opportunities from government spending in Water Utilities sector.
Buying journey improvements
– Luzhou Xinglu Water can improve the customer journey of consumers in the Water Utilities 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Luzhou Xinglu Water is facing challenges because of the dominance of functional experts in the organization. Luzhou Xinglu Water can utilize new technology in the field of Water Utilities industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Using analytics as competitive advantage
– Luzhou Xinglu Water has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Water Utilities sector. This continuous investment in analytics has enabled Luzhou Xinglu Water to build a competitive advantage using analytics. The analytics driven competitive advantage can help Luzhou Xinglu Water to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Luzhou Xinglu Water to increase its market reach. Luzhou Xinglu Water 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.
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. Luzhou Xinglu Water can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Luzhou Xinglu Water 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Luzhou Xinglu Water in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Water Utilities industry, and it will provide faster access to the consumers.
Use of Bitcoin and other crypto currencies for transactions in Water Utilities industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Luzhou Xinglu Water in the Water Utilities industry. Now Luzhou Xinglu Water can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Luzhou Xinglu Water has opened avenues for new revenue streams for the organization in Water Utilities industry. This can help Luzhou Xinglu Water to build a more holistic ecosystem for Luzhou Xinglu Water products in the Water Utilities industry by providing – data insight services, data privacy related products, data based consulting services, 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 Luzhou Xinglu Water 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.
Threats Luzhou Xinglu Water External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Luzhou Xinglu Water are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Luzhou Xinglu Water 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 Luzhou Xinglu Water prominent markets.
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. Luzhou Xinglu Water needs to understand the core reasons impacting the Water Utilities industry. This will help it in building a better workplace.
High dependence on third party suppliers
– Luzhou Xinglu Water 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.
Environmental challenges
– Luzhou Xinglu Water 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. Luzhou Xinglu Water can take advantage of this fund but it will also bring new competitors in the Water Utilities industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Luzhou Xinglu Water may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Water Utilities 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.
Increasing wage structure of Luzhou Xinglu Water
– 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 Luzhou Xinglu Water.
Consumer confidence and its impact on Luzhou Xinglu Water 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 Water Utilities industry and other sectors.
Technology acceleration in Forth Industrial Revolution
– Luzhou Xinglu Water has witnessed rapid integration of technology during Covid-19 in the Water Utilities industry. As one of the leading players in the industry, Luzhou Xinglu Water needs to keep up with the evolution of technology in the Water Utilities 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
– Luzhou Xinglu Water 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 Water Utilities industry regulations.
Shortening product life cycle
– it is one of the major threat that Luzhou Xinglu Water is facing in Water Utilities sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Luzhou Xinglu Water 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Water Utilities industry are lowering. It can presents Luzhou Xinglu Water with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Water Utilities sector.
Weighted SWOT Analysis of Luzhou Xinglu Water Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Luzhou Xinglu Water 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 Luzhou Xinglu Water 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 Luzhou Xinglu Water 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 Luzhou Xinglu Water 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 Luzhou Xinglu Water needs to make to build a sustainable competitive advantage.