Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group
The Beijing Capital Group was one of the most profitable and successful state-owned enterprises in China. Since its foundation, the group had been making unrelenting efforts in promoting reform, improving capital operation, and capitalizing on the advantages of the group in terms of operational scale. All these efforts had helped it achieve success. The employee turnover rate was low, as the staff had a sense of pride in being part of a successful firm. For the immediate future, however, the market environment was expected to be increasingly tough. Some of the important issues that the president of the group had to deal with included how to sustain growth and remain competitive following China's expected accession to the World Trade Organization. Given the structural and institutional constraints inherited from the socialist tradition, it was not easy for the group to overcome all the limits of the system. At this point, the president wondered whether he could find a way to reform the group's human resources system within the limits set by the state.
Swot Analysis of "Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group" written by Gilbert Wong, Scarlet Chan, Mary Ho includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Beijing Limits facing as an external strategic factors. Some of the topics covered in Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group case study are - Strategic Management Strategies, and Organizational Development.
Some of the macro environment factors that can be used to understand the Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group casestudy better are - – there is backlash against globalization, geopolitical disruptions, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, technology disruption,
increasing household debt because of falling income levels, increasing commodity prices, etc
Introduction to SWOT Analysis of Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Beijing Limits, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Beijing Limits 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 Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group can be done for the following purposes –
1. Strategic planning using facts provided in Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group case study
2. Improving business portfolio management of Beijing Limits
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Beijing Limits
Strengths Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Beijing Limits in Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Beijing Limits in the sector have low bargaining power. Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Beijing Limits to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Beijing Limits
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Beijing Limits does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Beijing Limits is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Cross disciplinary teams
– Horizontal connected teams at the Beijing Limits 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.
High switching costs
– The high switching costs that Beijing Limits 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.
Training and development
– Beijing Limits has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Effective Research and Development (R&D)
– Beijing Limits has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Organizational Development industry
– Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group firm has clearly differentiated products in the market place. This has enabled Beijing Limits to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Beijing Limits to invest into research and development (R&D) and innovation.
Ability to lead change in Organizational Development field
– Beijing Limits is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Beijing Limits in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Highly skilled collaborators
– Beijing Limits has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Beijing Limits in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group are -
Aligning sales with marketing
– It come across in the case study Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group can leverage the sales team experience to cultivate customer relationships as Beijing Limits is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Beijing Limits 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 industry using digital technology.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Beijing Limits has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group, in the dynamic environment Beijing Limits has struggled to respond to the nimble upstart competition. Beijing Limits 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
– Beijing Limits 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group, it seems that the employees of Beijing Limits 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 segment, Beijing Limits 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.
Lack of clear differentiation of Beijing Limits products
– To increase the profitability and margins on the products, Beijing Limits needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Beijing Limits has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
No frontier risks strategy
– After analyzing the HBR case study Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group, it seems that company is thinking about the frontier risks that can impact Organizational Development strategy. 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group, is just above the industry average. Beijing Limits 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.
Opportunities Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Beijing Limits in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Beijing Limits has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Beijing Limits to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Beijing Limits 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Beijing Limits 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, as suggested in case study, Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Beijing Limits 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 Organizational Development segment.
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 Beijing Limits 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.
Learning at scale
– Online learning technologies has now opened space for Beijing Limits 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Beijing Limits in the consumer business. Now Beijing Limits can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Beijing Limits can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Beijing Limits has opened avenues for new revenue streams for the organization in the industry. This can help Beijing Limits to build a more holistic ecosystem as suggested in the Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group case study. Beijing Limits can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Beijing Limits can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group suggest that firm 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Beijing Limits is facing challenges because of the dominance of functional experts in the organization. Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Beijing Limits 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. Beijing Limits 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.
Threats Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group are -
Increasing wage structure of Beijing Limits
– 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 Beijing Limits.
Regulatory challenges
– Beijing Limits 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 Organizational Development industry regulations.
Consumer confidence and its impact on Beijing Limits 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 the industry and other sectors.
Environmental challenges
– Beijing Limits 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. Beijing Limits can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
High dependence on third party suppliers
– Beijing Limits 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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Beijing Limits with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Beijing Limits 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.
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. Beijing Limits needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Beijing Limits has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Beijing Limits needs to keep up with the evolution of technology in the Organizational Development 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Beijing Limits 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 prominent markets illustrated in HBR case study Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group .
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 Beijing Limits business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group, Beijing Limits may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
Weighted SWOT Analysis of Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group 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 the case study Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group 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 the Harvard case study Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group 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 Managing a New State-owned Enterprise: A Daring Experiment by the Beijing Capital Group is 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 Beijing Limits needs to make to build a sustainable competitive advantage.
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