Based on various researches at Oak Spring University , Xin Yuan Enterprises is operating in a macro-environment that has been destablized by – cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, increasing energy prices, geopolitical disruptions, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion,
central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Xin Yuan Enterprises
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Xin Yuan Enterprises can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Xin Yuan Enterprises, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Xin Yuan Enterprises 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 Xin Yuan Enterprises can be done for the following purposes –
1. Strategic planning of Xin Yuan Enterprises
2. Improving business portfolio management of Xin Yuan Enterprises
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Rental & Leasing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Xin Yuan Enterprises
Strengths of Xin Yuan Enterprises | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Xin Yuan Enterprises are -
Digital Transformation in Rental & Leasing industry
- digital transformation varies from industry to industry. For Xin Yuan Enterprises digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Xin Yuan Enterprises 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.
Innovation driven organization
– Xin Yuan Enterprises is one of the most innovative firm in Rental & Leasing sector.
Ability to lead change in Rental & Leasing
– Xin Yuan Enterprises is one of the leading players in the Rental & Leasing industry in Hong Kong. Over the years it has not only transformed the business landscape in the Rental & Leasing industry in Hong Kong but also across the existing markets. The ability to lead change has enabled Xin Yuan Enterprises in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Xin Yuan Enterprises has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Rental & Leasing industry. Secondly the value chain collaborators of Xin Yuan Enterprises have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Xin Yuan Enterprises
– The covid-19 pandemic has put organizational resilience at the centre of everthing Xin Yuan Enterprises does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Xin Yuan Enterprises 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 Rental & Leasing 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.
High switching costs
– The high switching costs that Xin Yuan Enterprises 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.
Successful track record of launching new products
– Xin Yuan Enterprises has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Xin Yuan Enterprises 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.
High brand equity
– Xin Yuan Enterprises has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Xin Yuan Enterprises to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Rental & Leasing industry
– Xin Yuan Enterprises has clearly differentiated products in the market place. This has enabled Xin Yuan Enterprises to fetch slight price premium compare to the competitors in the Rental & Leasing industry. The sustainable margins have also helped Xin Yuan Enterprises to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Xin Yuan Enterprises in the Services sector have low bargaining power. Xin Yuan Enterprises has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Xin Yuan Enterprises to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Xin Yuan Enterprises 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 Xin Yuan Enterprises is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Xin Yuan Enterprises emphasize – knowledge, initiative, and innovation.
Weaknesses of Xin Yuan Enterprises | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Xin Yuan Enterprises are -
High operating costs
– Compare to the competitors, Xin Yuan Enterprises has high operating costs in the Rental & Leasing industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Xin Yuan Enterprises lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Xin Yuan Enterprises is dominated by functional specialists. It is not different from other players in the Rental & Leasing industry, but Xin Yuan Enterprises needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Xin Yuan Enterprises to focus more on services in the Rental & Leasing industry rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative at Xin Yuan Enterprises, in the dynamic environment of Rental & Leasing industry it has struggled to respond to the nimble upstart competition. Xin Yuan Enterprises 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
– Xin Yuan Enterprises 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.
High dependence on Xin Yuan Enterprises ‘s star products
– The top 2 products and services of Xin Yuan Enterprises still accounts for major business revenue. This dependence on star products in Rental & Leasing industry has resulted into insufficient focus on developing new products, even though Xin Yuan Enterprises has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Xin Yuan Enterprises 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 Rental & Leasing industry using digital technology.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Xin Yuan Enterprises is slow explore the new channels of communication. These new channels of communication can help Xin Yuan Enterprises to provide better information regarding Rental & Leasing products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Xin Yuan Enterprises 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.
No frontier risks strategy
– From the 10K / annual statement of Xin Yuan Enterprises, it seems that company is thinking out the frontier risks that can impact Rental & Leasing 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.
Employees’ less understanding of Xin Yuan Enterprises strategy
– From the outside it seems that the employees of Xin Yuan Enterprises 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.
Workers concerns about automation
– As automation is fast increasing in the Rental & Leasing industry, Xin Yuan Enterprises 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.
Xin Yuan Enterprises Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Xin Yuan Enterprises are -
Developing new processes and practices
– Xin Yuan Enterprises can develop new processes and procedures in Rental & Leasing 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.
Creating value in data economy
– The success of analytics program of Xin Yuan Enterprises has opened avenues for new revenue streams for the organization in Rental & Leasing industry. This can help Xin Yuan Enterprises to build a more holistic ecosystem for Xin Yuan Enterprises products in the Rental & Leasing industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Xin Yuan Enterprises can use the latest technology developments to improve its manufacturing and designing process in Rental & Leasing 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.
Better consumer reach
– The expansion of the 5G network will help Xin Yuan Enterprises to increase its market reach. Xin Yuan Enterprises will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Leveraging digital technologies
– Xin Yuan Enterprises 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.
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 Xin Yuan Enterprises 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
– Xin Yuan Enterprises has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Rental & Leasing sector. This continuous investment in analytics has enabled Xin Yuan Enterprises to build a competitive advantage using analytics. The analytics driven competitive advantage can help Xin Yuan Enterprises to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Xin Yuan Enterprises 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.
Building a culture of innovation
– managers at Xin Yuan Enterprises 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 Rental & Leasing industry.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Xin Yuan Enterprises in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Rental & Leasing industry, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Xin Yuan Enterprises can use these opportunities to build new business models that can help the communities that Xin Yuan Enterprises operates in. Secondly it can use opportunities from government spending in Rental & Leasing sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Xin Yuan Enterprises 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.
Use of Bitcoin and other crypto currencies for transactions in Rental & Leasing industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Xin Yuan Enterprises in the Rental & Leasing industry. Now Xin Yuan Enterprises can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Xin Yuan Enterprises External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Xin Yuan Enterprises are -
Regulatory challenges
– Xin Yuan Enterprises 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 Rental & Leasing industry regulations.
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 Xin Yuan Enterprises.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Xin Yuan Enterprises may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Rental & Leasing sector.
High dependence on third party suppliers
– Xin Yuan Enterprises 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Xin Yuan Enterprises 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 Xin Yuan Enterprises prominent markets.
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.
Increasing wage structure of Xin Yuan Enterprises
– 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 Xin Yuan Enterprises.
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 Xin Yuan Enterprises in the Rental & Leasing sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Xin Yuan Enterprises in Rental & Leasing industry. The Rental & Leasing 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.
Technology acceleration in Forth Industrial Revolution
– Xin Yuan Enterprises has witnessed rapid integration of technology during Covid-19 in the Rental & Leasing industry. As one of the leading players in the industry, Xin Yuan Enterprises needs to keep up with the evolution of technology in the Rental & Leasing 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
– Xin Yuan Enterprises 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 Rental & Leasing industry.
Easy access to finance
– Easy access to finance in Rental & Leasing industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Xin Yuan Enterprises can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Rental & Leasing industry are lowering. It can presents Xin Yuan Enterprises with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Rental & Leasing sector.
Weighted SWOT Analysis of Xin Yuan Enterprises Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Xin Yuan Enterprises 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 Xin Yuan Enterprises 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 Xin Yuan Enterprises 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 Xin Yuan Enterprises 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 Xin Yuan Enterprises needs to make to build a sustainable competitive advantage.
