Last time we discussed the SWOT analysis of one of the reputed telecommunication companies, Telstra. This time we will be going to know more about the SWOT analysis of Hikvision.
Founded in 2001, Hikvision has paved its way to becoming one of the leading suppliers of surveillance solutions with the video surveillance market as its core competency. In the 2019 edition of Forbes Global 2000, Hikvision ranked 800. Hikvision seems to be marching ahead, having already made its unique standing in the industry in 21 years with its constant focus on the development of innovative technologies.
Another aspect behind Hikvision’s success is, its commitment towards constantly formulating the best marketing strategies, recently Hikvision launched Digital Showroom virtually bringing its physical showroom to the comfort of your home. If you want to kick-start your marketing journey check out our Free MasterClass on Digital Marketing 101 by the CEO and Founder of IIDE, Karan Shah.
Before we begin with our swot analysis of Hikvision, let’s learn a bit about Hikvision as a company, its history, products, competitors, and financial status.
Hangzhou Hikvision Digital Technology Co., Ltd., popularly known as Hikvision is a Chinese state-owned company founded in 2001 by Zhejiang HIK Information Technology Co., Ltd., and Gong Hongjia. It is headquartered in Hangzhou, Zhejiang.
The company was conceived with the vision to “Empower vision for the security and sustainable growth of the world” and true to it the company is continuously exploring innovative ways to produce cutting-edge technology products for its users. Nearly half of its employees i.e. over 20000 workers work in the R&D department.
Hikvision is an IoT solution provider catering to a diverse market with video intelligence technology at its centre. It provides various products from security thermal cameras, traffic flow detection systems, entrance & exit control and parking management system products, emergency alarms, LCD video walls, etc. The company operates globally and provides its services in more than 150 countries.
|Origin||Hangzhou, Zhejiang, China|
|No. of Employees||42,685+|
|Market Cap||$70.78 Billion (2022)|
|Annual Revenue||$9.06 Billion (2021)|
|Net Income/ Profit||13.4 Billion Yuan (2020)|
Products & Services by Hikvision
The categories of items available at Hikvision are as follows:
- Intelligent Traffic Products
- Display and Control
- Alarm Products
- Video Intercom Products
- Mobile Products
- Network Surveillance Systems
Competitors of Hikvision
Hikvision competes on a global scale. Following are its top 5 competitors
- Zhejiang Dahua Technology
- Axis Communications
So as we got to know about the business of Hikvision, now we will discuss the SWOT analysis of Hikvision.
SWOT Analysis of Hikvision
A SWOT analysis examines the strengths, weaknesses, opportunities, and threats that a firm faces. SWOT Analysis is a tried-and-true tool that enables a company like BCE (Hikvision Canada Enterprises) to compare its business and performance to that of its competitors.
It will give us a strategic analysis of its internal and external environment, which is crucial for understanding the SWOT Analysis of Hikvision.
To better understand the SWOT analysis of Hikvision, refer to the infographics below:
Below is an explicit guide to the SWOT analysis of Hikvision.
Strengths of Hikvision
Hikvision has numerous strengths that help it to thrive in the marketplace. Some of the strengths of Hikvision are
- Strong Portfolio: Hikvision consists of working in the CCTV security industry for the last 21+ years and it has created a strong brand portfolio that is not easy for its competitors to break down. More than 42,000 employees work under Hikvision from which 20,000 employees are dedicated to the R&D of the company.
- Research & Development: One of the biggest strengths of Hikvision is that the company puts 10% of its yearly annual revenue in the R&D department which ensures that Hikvision will never work with the backward technology, moreover it will always be a step ahead to introduce newer one.
- Global Presence: Not only in China and Japan, but the company also has a global presence in more than 150 countries including India, the United States, the UK, Canada and Asia-pacific regions along with its R&D centres in every country.
- Financial Position: After the rise of crime, and security as a necessity, there is an increase in sales of Hikvision security systems year on year which ultimately led to rising in yearly annual revenue as compared to the previous year.
- Product Portfolio: Hikvision provides products in a large range of categories. It offers various unique products and diversified solutions in forward-looking technology as recently the company launched AX PRO Tri-tech detectors that take false alarm reduction to the next level. Not only this but Hikvision has a lot of distinct product offerings that competitors don’t have.
- Strong Distribution Networks: Hikvision has built both an expansive marketing network having a significant number of stores in practically every state, as well as a reliable distribution network that ensures that its products are readily available via an efficient buying-selling process.
Weaknesses of Hikvision
Some of the weaknesses of Hikvision which they can work upon are
- Security Concerns: The discovery of a high vulnerability in surveillance cameras reveals that they are an easy target to remote hijacking. Hikvision security concerns are one of its biggest weaknesses.
- Demand Forecasting: The inaccuracy in product demand forecasting due to increasing security demand leads to a higher count of missed opportunities. It is also one of the reasons why its day inventory is high in comparison to its competitors and, it ends up retaining more inventory in-house and in the channel.
- Prevented from the US: Recently, the company got sanctioned by the US government for it being allegedly involved in human rights violations and national security concerns. The decision is going to badly affect the revenue of Hikvision because the US was one of the major markets where the company was playing its game very well.
- Internal Management: There’s an increase in the complexities of internal management resulting from business growth and management, which leads to an eventual lack of coordination and inefficient functioning of departments.
- Product Market Share: Only a selected range of Hikvision products has a high market share while the remaining majority have a lower market share. This one-sided dependence makes the company susceptible to external threats in case the favourable products suffer for any reason.
- High Attrition Rate: Due to the high attrition rate in comparison to its competitors Hikvision ends up spending more than its budgeted figure on the training and development of its employee and R&D.
Opportunities for Hikvision
Opportunities are potential areas of focus for a company to improve results, increase sales, and, ultimately, profit. Some of the opportunities for Hikvision are
- Smart Project Contracts: The ever-escalating demand for smart projects to develop smart cities and industries presents Hikvision with large-scale new business opportunities. The cities now aim to upgrade themselves by various means such as the implementation of intelligent video monitoring technology, as compared to the previous traffic system images are more detailed and clearer with it.
- Video Surveillance: Hikvision can utilize the increasing demand for intelligent video surveillance in the retail industry for people recognition, POS integration, VIP recognition, heat- mapping, etc.
- The Digital World: This is the age of digital, a large number of consumers are increasingly making purchases online ensuring a strong online presence through the listing, social media, and efficient utilization of e-commerce. Hikvision can tap into a new market that lives online and increase its revenue.
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- Environmental Subsidy: Hikvision can take a lead, leveraging various subsidies introduced by the government focusing on developing environmentally friendly products. Creating sustainable products also give them a differential edge over their competitors.
- Deep Learning Solutions: The growth in the need and scope of deep learning solutions- i.e. artificial intelligence (AI) applications and services developed to improve automation. The company should execute analytical and physical tasks without human intervention for public security and monitoring in post-COVID time.
Threats to Hikvision
Threats are environmental factors that can be harmful to a company’s growth. The following are some of Hikvision’s threats:
- Hikvision Ban: The loss due to the ban on the usage or procurement of Hikvision products by the US Department of Defense resulted from Hikvision camera vulnerability. The Hikvision camera vulnerability tops the list of Hikvision security concerns.
- Isolationism: The increasing isolation from the US government due to security concerns posed by Hikvision’s products may result in a similar reaction from other governments around the world, causing a downfall in international sales.
- Raw Materials: Hikvision faces uncertainty in the supply of raw material due to its addition to the US Commerce Department Entity List – a trade restriction list consisting of entities determined to be acting contrary to the foreign policy interests of the United States.
- Intense Competition: There has been an increase in the number of players in the market. These entrants are gaining market share by obtaining existing companies’ market share. Hikvision will face downward pressure on both its profitability and overall sales and will have to adjust its pricing to retain its customer base.
- Political Uncertainties: Hikvision faces the risk of monetary loss due to fluctuation in the currency resulting from a politically volatile environment across various international markets.
This ends our comprehensive SWOT analysis of Hikvision. Let us conclude our learning below.
Hikvision is a leading IoT solution provider with video surveillance at its core, operating globally. Through the SWOT analysis of Hikvision, we analyzed that Hikvision enjoys an edge due to its strong distribution channel and a capable team of R&D researchers. These strength helps the company to utilize the opportunities coming along its way.
However, to recover from the damage to its brand image due to the Hikvision ban by the US Defence Department and to not only survive but thrive in a highly competitive industry, Hikvision has to implement strategic marketing efforts. It will have to formulate an extensive marketing plan to build back its image in the international market and win the customers over.
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