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 – technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels,
challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, 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 -
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.
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.
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.
Innovation driven organization
– Northern New Energy Hldg Ltd is one of the most innovative firm in Business Services sector.
Successful track record of launching new products
– Northern New Energy Hldg Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Northern New Energy Hldg Ltd 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.
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.
Sustainable margins compare to other players in Business Services industry
– Northern New Energy Hldg Ltd has clearly differentiated products in the market place. This has enabled Northern New Energy Hldg Ltd to fetch slight price premium compare to the competitors in the Business Services industry. The sustainable margins have also helped Northern New Energy Hldg Ltd to invest into research and development (R&D) and innovation.
Strong track record of project management in the Business Services industry
– Northern New Energy Hldg Ltd is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
Ability to recruit top talent
– Northern New Energy Hldg Ltd is one of the leading players in the Business Services 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.
Training and development
– Northern New Energy Hldg Ltd has one of the best training and development program in Services 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.
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 -
No frontier risks strategy
– From the 10K / annual statement of Northern New Energy Hldg Ltd, it seems that company is thinking out the frontier risks that can impact Business Services 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.
Skills based hiring in Business Services industry
– The stress on hiring functional specialists at Northern New Energy Hldg Ltd 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.
High dependence on Northern New Energy Hldg Ltd ‘s star products
– The top 2 products and services of Northern New Energy Hldg Ltd still accounts for major business revenue. This dependence on star products in Business Services industry has resulted into insufficient focus on developing new products, even though Northern New Energy Hldg Ltd has relatively successful track record of launching new products.
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.
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.
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 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 Northern New Energy Hldg Ltd supply chain. Even after few cautionary changes, Northern New Energy Hldg Ltd is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Northern New Energy Hldg Ltd vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Northern New Energy Hldg Ltd 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 Business Services industry using digital technology.
Need for greater diversity
– Northern New Energy Hldg Ltd 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.
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.
Lack of clear differentiation of Northern New Energy Hldg Ltd products
– To increase the profitability and margins on the products, Northern New Energy Hldg Ltd needs to provide more differentiated products than what it is currently offering in the marketplace.
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 -
Buying journey improvements
– Northern New Energy Hldg Ltd can improve the customer journey of consumers in the Business Services 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Northern New Energy Hldg Ltd can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
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.
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.
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.
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.
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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Northern New Energy Hldg Ltd 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 Northern New Energy Hldg Ltd to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Northern New Energy Hldg Ltd 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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Northern New Energy Hldg Ltd in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Business Services industry, and it will provide faster access to the consumers.
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 -
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.
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.
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.
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.
Stagnating economy with rate increase
– Northern New Energy Hldg Ltd can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the Business Services industry.
Increasing wage structure of Northern New Energy Hldg Ltd
– 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 Northern New Energy Hldg Ltd.
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.
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. Northern New Energy Hldg Ltd 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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Business Services industry are lowering. It can presents Northern New Energy Hldg Ltd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Business Services 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 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.
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.
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.
