China Aluminum Cans (6898) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for China Aluminum Cans (Hong Kong)

Based on various researches at Oak Spring University , China Aluminum Cans is operating in a macro-environment that has been destablized by – challanges to central banks by blockchain based private currencies, there is backlash against globalization, technology disruption, wage bills are increasing, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, geopolitical disruptions, increasing energy prices, increasing transportation and logistics costs, etc

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Introduction to SWOT Analysis of China Aluminum Cans

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that China Aluminum Cans can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the China Aluminum Cans, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which China Aluminum Cans 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 China Aluminum Cans can be done for the following purposes –
1. Strategic planning of China Aluminum Cans
2. Improving business portfolio management of China Aluminum Cans
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Containers & Packaging sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of China Aluminum Cans

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Strengths of China Aluminum Cans | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of China Aluminum Cans are -

High switching costs

– The high switching costs that China Aluminum Cans has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.

Sustainable margins compare to other players in Containers & Packaging industry

– China Aluminum Cans has clearly differentiated products in the market place. This has enabled China Aluminum Cans to fetch slight price premium compare to the competitors in the Containers & Packaging industry. The sustainable margins have also helped China Aluminum Cans to invest into research and development (R&D) and innovation.

Learning organization

- China Aluminum Cans 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 China Aluminum Cans is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at China Aluminum Cans emphasize – knowledge, initiative, and innovation.

Cross disciplinary teams

– Horizontal connected teams at the China Aluminum Cans are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.

Diverse revenue streams

– China Aluminum Cans is present in almost all the verticals within the Containers & Packaging industry. This has provided China Aluminum Cans 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

– China Aluminum Cans is one of the leading players in the Containers & Packaging 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.

Digital Transformation in Containers & Packaging industry

- digital transformation varies from industry to industry. For China Aluminum Cans digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. China Aluminum Cans 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.

Organizational Resilience of China Aluminum Cans

– The covid-19 pandemic has put organizational resilience at the centre of everthing China Aluminum Cans does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Superior customer experience

– The customer experience strategy of China Aluminum Cans in Containers & Packaging industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Successful track record of launching new products

– China Aluminum Cans has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. China Aluminum Cans 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.

Highly skilled collaborators

– China Aluminum Cans has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Containers & Packaging industry. Secondly the value chain collaborators of China Aluminum Cans have helped the firm to develop new products and bring them quickly to the marketplace.

Innovation driven organization

– China Aluminum Cans is one of the most innovative firm in Containers & Packaging sector.

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Weaknesses of China Aluminum Cans | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of China Aluminum Cans are -

Increasing silos among functional specialists

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

Ability to respond to the competition

– As the decision making is very deliberative at China Aluminum Cans, in the dynamic environment of Containers & Packaging industry it has struggled to respond to the nimble upstart competition. China Aluminum Cans has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Skills based hiring in Containers & Packaging industry

– The stress on hiring functional specialists at China Aluminum Cans 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 bargaining power of channel partners in Containers & Packaging industry

– because of the regulatory requirements in Hong Kong, China Aluminum Cans 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 Containers & Packaging industry.

No frontier risks strategy

– From the 10K / annual statement of China Aluminum Cans, it seems that company is thinking out the frontier risks that can impact Containers & Packaging 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.

Lack of clear differentiation of China Aluminum Cans products

– To increase the profitability and margins on the products, China Aluminum Cans needs to provide more differentiated products than what it is currently offering in the marketplace.

Low market penetration in new markets

– Outside its home market of Hong Kong, China Aluminum Cans needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Compensation and incentives

– The revenue per employee of China Aluminum Cans is just above the Containers & Packaging 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.

Slow decision making process

– As mentioned earlier in the report, China Aluminum Cans has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Containers & Packaging industry over the last five years. China Aluminum Cans 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.

Workers concerns about automation

– As automation is fast increasing in the Containers & Packaging industry, China Aluminum Cans 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 China Aluminum Cans ‘s star products

– The top 2 products and services of China Aluminum Cans still accounts for major business revenue. This dependence on star products in Containers & Packaging industry has resulted into insufficient focus on developing new products, even though China Aluminum Cans has relatively successful track record of launching new products.

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China Aluminum Cans Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of China Aluminum Cans are -

Reforming the budgeting process

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

Buying journey improvements

– China Aluminum Cans can improve the customer journey of consumers in the Containers & Packaging 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.

Developing new processes and practices

– China Aluminum Cans can develop new processes and procedures in Containers & Packaging 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.

Use of Bitcoin and other crypto currencies for transactions in Containers & Packaging industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for China Aluminum Cans in the Containers & Packaging industry. Now China Aluminum Cans can target international markets with far fewer capital restrictions requirements than the existing system.

Using analytics as competitive advantage

– China Aluminum Cans has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Containers & Packaging sector. This continuous investment in analytics has enabled China Aluminum Cans to build a competitive advantage using analytics. The analytics driven competitive advantage can help China Aluminum Cans to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Loyalty marketing

– China Aluminum Cans 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.

Learning at scale

– Online learning technologies has now opened space for China Aluminum Cans 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.

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 China Aluminum Cans 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, China Aluminum Cans 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, China Aluminum Cans can use these opportunities to build new business models that can help the communities that China Aluminum Cans operates in. Secondly it can use opportunities from government spending in Containers & Packaging sector.

Finding new ways to collaborate

– Covid-19 has not only transformed business models of companies in Containers & Packaging industry, but it has also influenced the consumer preferences. China Aluminum Cans can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for China Aluminum Cans 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 China Aluminum Cans to hire the very best people irrespective of their geographical location.

Harnessing reconfiguration of the global supply chains

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

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Threats China Aluminum Cans External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of China Aluminum Cans are -

Regulatory challenges

– China Aluminum Cans 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 Containers & Packaging industry regulations.

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.

Stagnating economy with rate increase

– China Aluminum Cans 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 Containers & Packaging industry.

Increasing wage structure of China Aluminum Cans

– 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 China Aluminum Cans.

Environmental challenges

– China Aluminum Cans 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. China Aluminum Cans can take advantage of this fund but it will also bring new competitors in the Containers & Packaging industry.

High dependence on third party suppliers

– China Aluminum Cans 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.

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. China Aluminum Cans needs to understand the core reasons impacting the Containers & Packaging industry. This will help it in building a better workplace.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for China Aluminum Cans in Containers & Packaging industry. The Containers & Packaging industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.

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 China Aluminum Cans business can come under increasing regulations regarding data privacy, data security, 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. China Aluminum Cans will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.

Consumer confidence and its impact on China Aluminum Cans 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 Containers & Packaging industry and other sectors.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, China Aluminum Cans may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Containers & Packaging sector.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Containers & Packaging industry are lowering. It can presents China Aluminum Cans with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Containers & Packaging sector.

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Weighted SWOT Analysis of China Aluminum Cans Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at China Aluminum Cans 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 China Aluminum Cans 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 China Aluminum Cans 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 China Aluminum Cans 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 China Aluminum Cans needs to make to build a sustainable competitive advantage.

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