Luzhou Xinglu Water (2281) SWOT Analysis / TOWS Matrix / 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 – challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, etc

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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.

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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

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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.

Analytics focus

– Luzhou Xinglu Water 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 Water Utilities 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.

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.

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.

Effective Research and Development (R&D)

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

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.

Successful track record of launching new products

– Luzhou Xinglu Water has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Luzhou Xinglu Water 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.

Strong track record of project management in the Water Utilities industry

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

Innovation driven organization

– Luzhou Xinglu Water is one of the most innovative firm in Water Utilities sector.

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.

High brand equity

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

Operational resilience

– The operational resilience strategy of Luzhou Xinglu Water comprises – understanding the underlying the factors in the Water Utilities 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.

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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 -

Capital Spending Reduction

– Even during the low interest decade, Luzhou Xinglu Water 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 Water Utilities industry using digital technology.

High operating costs

– Compare to the competitors, Luzhou Xinglu Water has high operating costs in the Water Utilities industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Luzhou Xinglu Water lucrative customers.

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.

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.

No frontier risks strategy

– From the 10K / annual statement of Luzhou Xinglu Water, it seems that company is thinking out the frontier risks that can impact Water Utilities 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.

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.

Skills based hiring in Water Utilities industry

– The stress on hiring functional specialists at Luzhou Xinglu Water has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.

Increasing silos among functional specialists

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

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.

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.

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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 -

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.

Harnessing reconfiguration of the global supply chains

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

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.

Building a culture of innovation

– managers at Luzhou Xinglu Water 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 Water Utilities industry.

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.

Reforming the budgeting process

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

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.

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.

Learning at scale

– Online learning technologies has now opened space for Luzhou Xinglu Water 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.

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.

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.

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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Water Utilities industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Luzhou Xinglu Water 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. Luzhou Xinglu Water 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.

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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 -

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.

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.

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 Luzhou Xinglu Water.

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 Luzhou Xinglu Water business can come under increasing regulations regarding data privacy, data security, etc.

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.

Easy access to finance

– Easy access to finance in Water Utilities industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Luzhou Xinglu Water can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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.

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.

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.

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.

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.

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.

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 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.

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