Nankang Rubber Tire Corp SWOT & PESTLE Analysis

Strength

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Weakness

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Opportunity

1. Rise of autonomous vehicles presents opportunity for the tire industry boosting innovation: The shift towards autonomous vehicles has the potential to reshape the tire industry and drive the need for advanced tire technologies. Autonomous vehicles require tires that can meet the unique demands of self-driving systems, including enhanced traction, durability, and safety features. These vehicles also require tires with improved sensor capabilities, specialized tread designs, and advanced materials to ensure optimal performance and safety. To capitalize on this opportunity, tire manufacturers are investing in research and development to develop innovative tire solutions tailored to autonomous vehicles. This includes the integration of sensor technologies, tire monitoring systems, and advanced rubber compounds to enhance performance and responsiveness in self-driving scenarios. Moreover, this also presents an opportunity for tire manufacturers to explore new business models. As autonomous vehicle fleets become more prevalent, companies like Nankang can consider partnerships with ride-hailing services or autonomous vehicle manufacturers to provide specialized tires and maintenance services.

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Threat

1. Long-term lockdowns during uncertainties like COVID-19 may negatively impact sales: COVID-19 pandemic has posed challenges to the rubber industry worldwide. During prolonged lockdowns, many businesses faced temporary closures, and consumer spending on non-essential items, such as automotive products, declined. This reduced demand for tires as vehicle usage decreased and new tire purchases were postponed. Additionally, restrictions on international trade and shipping have hindered the export and distribution of tires, further impacting sales for companies in the industry. To mitigate the negative effects of long-term lockdowns, companies in the rubber industry had been exploring innovative strategies. This includes focusing on e-commerce channels, implementing cost-saving measures, and adapting production processes to ensure employee safety and continuity of operations. Strengthening online sales platforms, exploring local and regional markets where restrictions are less severe, and maintaining communication with customers to understand their changing needs is also critical.

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Political

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Economic

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Social

1. Changing mobility patterns like rise of shuttle services impacts product demand: As shared mobility gains popularity, more people are relying on services like ridesharing and shuttle services instead of owning personal vehicles. This shift in consumer behavior can have implications for the demand for tires. According to a McKinsey report on shared mobility and sustainable cities, the growth of shared mobility services is expected to have a substantial impact on the automotive industry. These services could reduce the overall demand for private vehicles, potentially leading to decreased tire sales. As shared mobility services typically operate with a fleet of vehicles, their tire replacement and maintenance needs may differ from individual vehicle owners. These services often prioritize cost efficiency and seek long-lasting, durable tires that can withstand the higher mileage and rigorous usage patterns of their fleets. To adapt to this changing landscape, businesses may need to assess the specific requirements of shuttle services and shared mobility providers. They may consider developing tires specifically tailored to the needs of these services, such as tires with enhanced durability, reduced rolling resistance for better fuel efficiency, and optimized performance for urban driving conditions.

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Technological

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Legal

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Environmental

1. Addresses increasing environmental concerns through carbon absorption & electric equipment installations: To address increasing environmental concerns, the company has implemented various measures, including carbon absorption and the installation of electric equipment. It has improved their exhaust gas treatment equipment by incorporating low-odor aromatic essence and utilizing dust collectors, scrubbers, and a self-refining process. They have also redesigned and optimized their air pollution prevention equipment's exhaust pipes to reduce odors and continuously minimize environmental pollution. The company also introduced their first natural gas boiler in 2018, gradually replacing oil-fired boilers. It is also planning to introduce the first nitrogen workstation in 2023. Moreover, it currently employs activated carbon-related adsorption equipment to treat process pollution sources, which has received verification and approval from competent authorities. Since 2015, it has been gradually replacing diesel stackers with more environmentally friendly electric stackers. By 2022, they have updated nearly 70% of their stackers. These actions contribute to their efforts to be more environmentally responsible and enhance their reputation as an environmentally conscious company.

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