Northern New Energy Hldg Ltd (8246) SWOT Analysis / TOWS Matrix / MBA Resources
Business Services
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Northern New Energy Hldg Ltd (Hong Kong)
Based on various researches at Oak Spring University , Northern New Energy Hldg Ltd is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, increasing energy prices, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%,
increasing transportation and logistics costs, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Northern New Energy Hldg Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Northern New Energy Hldg Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Northern New Energy Hldg Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Northern New Energy Hldg Ltd 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 Northern New Energy Hldg Ltd can be done for the following purposes –
1. Strategic planning of Northern New Energy Hldg Ltd
2. Improving business portfolio management of Northern New Energy Hldg Ltd
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Business Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Northern New Energy Hldg Ltd
Strengths of Northern New Energy Hldg Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Northern New Energy Hldg Ltd are -
Analytics focus
– Northern New Energy Hldg Ltd 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 Business Services 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.
Innovation driven organization
– Northern New Energy Hldg Ltd is one of the most innovative firm in Business Services sector.
Effective Research and Development (R&D)
– Northern New Energy Hldg Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Northern New Energy Hldg Ltd staying ahead in the Business Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Northern New Energy Hldg Ltd has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Business Services industry. Secondly the value chain collaborators of Northern New Energy Hldg Ltd have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Business Services
– Northern New Energy Hldg Ltd is one of the leading players in the Business Services industry in Hong Kong. Over the years it has not only transformed the business landscape in the Business Services industry in Hong Kong but also across the existing markets. The ability to lead change has enabled Northern New Energy Hldg Ltd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Business Services industry
- digital transformation varies from industry to industry. For Northern New Energy Hldg Ltd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Northern New Energy Hldg Ltd 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.
High switching costs
– The high switching costs that Northern New Energy Hldg Ltd 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.
Diverse revenue streams
– Northern New Energy Hldg Ltd is present in almost all the verticals within the Business Services industry. This has provided Northern New Energy Hldg Ltd 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.
Operational resilience
– The operational resilience strategy of Northern New Energy Hldg Ltd comprises – understanding the underlying the factors in the Business Services 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.
Learning organization
- Northern New Energy Hldg Ltd 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 Northern New Energy Hldg Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Northern New Energy Hldg Ltd emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Northern New Energy Hldg Ltd
– The covid-19 pandemic has put organizational resilience at the centre of everthing Northern New Energy Hldg Ltd does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Northern New Energy Hldg Ltd in the Services sector have low bargaining power. Northern New Energy Hldg Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Northern New Energy Hldg Ltd to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses of Northern New Energy Hldg Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Northern New Energy Hldg Ltd are -
Compensation and incentives
– The revenue per employee of Northern New Energy Hldg Ltd is just above the Business Services 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.
Employees’ less understanding of Northern New Energy Hldg Ltd strategy
– From the outside it seems that the employees of Northern New Energy Hldg Ltd 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.
Increasing silos among functional specialists
– The organizational structure of Northern New Energy Hldg Ltd is dominated by functional specialists. It is not different from other players in the Business Services industry, but Northern New Energy Hldg Ltd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Northern New Energy Hldg Ltd to focus more on services in the Business Services industry rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Northern New Energy Hldg Ltd 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 to strategic competitive environment developments
– As Northern New Energy Hldg Ltd is one of the leading players in the Business Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Business Services industry in last five years.
High cash cycle compare to competitors
Northern New Energy Hldg Ltd has a high cash cycle compare to other players in the Business Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High bargaining power of channel partners in Business Services industry
– because of the regulatory requirements in Hong Kong, Northern New Energy Hldg Ltd 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 Business Services industry.
Slow decision making process
– As mentioned earlier in the report, Northern New Energy Hldg Ltd has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Business Services industry over the last five years. Northern New Energy Hldg Ltd 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.
Aligning sales with marketing
– From the outside it seems that Northern New Energy Hldg Ltd needs to have more collaboration between its sales team and marketing team. Sales professionals in the Business Services industry have deep experience in developing customer relationships. Marketing department at Northern New Energy Hldg Ltd can leverage the sales team experience to cultivate customer relationships as Northern New Energy Hldg Ltd is planning to shift buying processes online.
Products dominated business model
– Even though Northern New Energy Hldg Ltd has some of the most successful models in the Business Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Northern New Energy Hldg Ltd should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative at Northern New Energy Hldg Ltd, in the dynamic environment of Business Services industry it has struggled to respond to the nimble upstart competition. Northern New Energy Hldg Ltd has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Northern New Energy Hldg Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Northern New Energy Hldg Ltd are -
Creating value in data economy
– The success of analytics program of Northern New Energy Hldg Ltd has opened avenues for new revenue streams for the organization in Business Services industry. This can help Northern New Energy Hldg Ltd to build a more holistic ecosystem for Northern New Energy Hldg Ltd products in the Business Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Northern New Energy Hldg Ltd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Business Services sector. This continuous investment in analytics has enabled Northern New Energy Hldg Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help Northern New Energy Hldg Ltd 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 Business Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Northern New Energy Hldg Ltd 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. Northern New Energy Hldg Ltd 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.
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 Northern New Energy Hldg Ltd 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Northern New Energy Hldg Ltd is facing challenges because of the dominance of functional experts in the organization. Northern New Energy Hldg Ltd can utilize new technology in the field of Business Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Use of Bitcoin and other crypto currencies for transactions in Business Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Northern New Energy Hldg Ltd in the Business Services industry. Now Northern New Energy Hldg Ltd can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Northern New Energy Hldg Ltd 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 Northern New Energy Hldg Ltd to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Northern New Energy Hldg Ltd can use the latest technology developments to improve its manufacturing and designing process in Business Services 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.
Learning at scale
– Online learning technologies has now opened space for Northern New Energy Hldg Ltd 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.
Building a culture of innovation
– managers at Northern New Energy Hldg Ltd 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 Business Services industry.
Developing new processes and practices
– Northern New Energy Hldg Ltd can develop new processes and procedures in Business Services 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Northern New Energy Hldg Ltd can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Northern New Energy Hldg Ltd can use these opportunities to build new business models that can help the communities that Northern New Energy Hldg Ltd operates in. Secondly it can use opportunities from government spending in Business Services sector.
Threats Northern New Energy Hldg Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Northern New Energy Hldg Ltd 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 Northern New Energy Hldg Ltd.
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. Northern New Energy Hldg Ltd needs to understand the core reasons impacting the Business Services industry. This will help it in building a better workplace.
Environmental challenges
– Northern New Energy Hldg Ltd 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. Northern New Energy Hldg Ltd can take advantage of this fund but it will also bring new competitors in the Business Services industry.
Regulatory challenges
– Northern New Energy Hldg Ltd 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 Business Services industry regulations.
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.
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 Northern New Energy Hldg Ltd business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Northern New Energy Hldg Ltd is facing in Business Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Northern New Energy Hldg Ltd 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.
Easy access to finance
– Easy access to finance in Business Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Northern New Energy Hldg Ltd can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Northern New Energy Hldg Ltd in the Business Services sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Northern New Energy Hldg Ltd 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 Northern New Energy Hldg Ltd prominent markets.
Technology acceleration in Forth Industrial Revolution
– Northern New Energy Hldg Ltd has witnessed rapid integration of technology during Covid-19 in the Business Services industry. As one of the leading players in the industry, Northern New Energy Hldg Ltd needs to keep up with the evolution of technology in the Business Services 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.
Consumer confidence and its impact on Northern New Energy Hldg Ltd 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 Business Services industry and other sectors.
Weighted SWOT Analysis of Northern New Energy Hldg Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Northern New Energy Hldg Ltd 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 Northern New Energy Hldg Ltd 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 Northern New Energy Hldg Ltd 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 Northern New Energy Hldg Ltd 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 Northern New Energy Hldg Ltd needs to make to build a sustainable competitive advantage.