Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory
As one of the world's leading manufacturers of houseware products and cleaning products, Hayco produced over five million brushes a month in its Shenzhen plant in 2003. When setting up its new factory in Shenzhen in the mid-1990s, Hayco had to decide how best to manage the issue of staff welfare for its growing number of factory workers. Senior management firmly believed that providing for the well-being of the company's staff would be crucial to ensuring low staff turnover and good workplace morale and, therefore, provided a "Hayco home-away-from-home" for the workers. The labor market has generally always been in favor of employers, and in the mid-1990s many factories were providing just the bare minimum of facilities and benefits for workers (in fact, the working conditions in many factories were appalling). In such an environment, why did Hayco invest money and effort in building the Hayco home-away-from-home? What message or management philosophy did such benefits convey?
Swot Analysis of "Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory" written by Gilbert Wong, Monica Wong includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hayco Shenzhen facing as an external strategic factors. Some of the topics covered in Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory case study are - Strategic Management Strategies, Employee retention, Manufacturing, Organizational culture, Personnel policies and Organizational Development.
Some of the macro environment factors that can be used to understand the Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory casestudy better are - – geopolitical disruptions, wage bills are increasing, central banks are concerned over increasing inflation, increasing commodity prices, increasing household debt because of falling income levels, there is increasing trade war between United States & China, talent flight as more people leaving formal jobs,
there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hayco Shenzhen, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hayco Shenzhen 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 Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory can be done for the following purposes –
1. Strategic planning using facts provided in Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory case study
2. Improving business portfolio management of Hayco Shenzhen
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 Hayco Shenzhen
Strengths Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hayco Shenzhen in Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory Harvard Business Review case study are -
Training and development
– Hayco Shenzhen has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory 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.
Learning organization
- Hayco Shenzhen 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 Hayco Shenzhen is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Organizational Development field
– Hayco Shenzhen 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 Hayco Shenzhen in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Hayco Shenzhen 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 Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Hayco Shenzhen digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hayco Shenzhen 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.
Superior customer experience
– The customer experience strategy of Hayco Shenzhen in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Hayco Shenzhen 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.
Low bargaining power of suppliers
– Suppliers of Hayco Shenzhen in the sector have low bargaining power. Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hayco Shenzhen to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Hayco Shenzhen has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hayco Shenzhen 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.
Strong track record of project management
– Hayco Shenzhen is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Hayco Shenzhen has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hayco Shenzhen to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Organizational Development industry
– Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory firm has clearly differentiated products in the market place. This has enabled Hayco Shenzhen to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Hayco Shenzhen to invest into research and development (R&D) and innovation.
Weaknesses Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory are -
Aligning sales with marketing
– It come across in the case study Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory 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 Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory can leverage the sales team experience to cultivate customer relationships as Hayco Shenzhen is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Hayco Shenzhen 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.
Increasing silos among functional specialists
– The organizational structure of Hayco Shenzhen is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Hayco Shenzhen needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hayco Shenzhen to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory, in the dynamic environment Hayco Shenzhen has struggled to respond to the nimble upstart competition. Hayco Shenzhen 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
– Hayco Shenzhen 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory, is just above the industry average. Hayco Shenzhen 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.
High cash cycle compare to competitors
Hayco Shenzhen 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory 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 Hayco Shenzhen has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory, it seems that the employees of Hayco Shenzhen 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Hayco Shenzhen 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Hayco Shenzhen 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.
Opportunities Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory | 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 Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory are -
Learning at scale
– Online learning technologies has now opened space for Hayco Shenzhen 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.
Using analytics as competitive advantage
– Hayco Shenzhen 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 Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hayco Shenzhen to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hayco Shenzhen 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 Hayco Shenzhen to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Hayco Shenzhen has opened avenues for new revenue streams for the organization in the industry. This can help Hayco Shenzhen to build a more holistic ecosystem as suggested in the Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory case study. Hayco Shenzhen can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Hayco Shenzhen 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.
Buying journey improvements
– Hayco Shenzhen can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory 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.
Manufacturing automation
– Hayco Shenzhen can use the latest technology developments to improve its manufacturing and designing process in Organizational Development segment. 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hayco Shenzhen is facing challenges because of the dominance of functional experts in the organization. Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory 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.
Developing new processes and practices
– Hayco Shenzhen can develop new processes and procedures in Organizational Development 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hayco Shenzhen can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Hayco Shenzhen to increase its market reach. Hayco Shenzhen 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.
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 Hayco Shenzhen in the consumer business. Now Hayco Shenzhen can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Hayco Shenzhen 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.
Threats Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory are -
Shortening product life cycle
– it is one of the major threat that Hayco Shenzhen is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Environmental challenges
– Hayco Shenzhen 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. Hayco Shenzhen can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory, Hayco Shenzhen 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 .
Increasing wage structure of Hayco Shenzhen
– 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 Hayco Shenzhen.
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. Hayco Shenzhen needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Regulatory challenges
– Hayco Shenzhen 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.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Hayco Shenzhen can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Hayco Shenzhen 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hayco Shenzhen in the Organizational Development industry. The Organizational Development 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 Hayco Shenzhen business can come under increasing regulations regarding data privacy, data security, etc.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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. Hayco Shenzhen 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.
Weighted SWOT Analysis of Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory 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 Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory 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 Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory 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 Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory 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 Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory 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 Hayco Shenzhen needs to make to build a sustainable competitive advantage.