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 - – increasing transportation and logistics costs, central banks are concerned over increasing inflation, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic ,
geopolitical disruptions, increasing commodity prices, 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 -
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.
Ability to recruit top talent
– Hayco Shenzhen is one of the leading recruiters in the industry. Managers in the Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Hayco Shenzhen is present in almost all the verticals within the industry. This has provided firm in Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
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.
Innovation driven organization
– Hayco Shenzhen is one of the most innovative firm in sector. Manager in Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Operational resilience
– The operational resilience strategy in the Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory 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.
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.
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.
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.
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.
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.
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.
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 -
Capital Spending Reduction
– Even during the low interest decade, Hayco Shenzhen 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.
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.
Low market penetration in new markets
– Outside its home market of Hayco Shenzhen, firm in the HBR case study Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
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.
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.
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.
Products dominated business model
– Even though Hayco Shenzhen has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Hayco Shenzhen has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Hayco Shenzhen even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Hayco Shenzhen supply chain. Even after few cautionary changes mentioned in the HBR case study - Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hayco Shenzhen vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Gilbert Wong, Monica Wong suggests that, Hayco Shenzhen is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
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 -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hayco Shenzhen 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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Hayco Shenzhen can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hayco Shenzhen 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, Hayco Manufacturing Ltd.: Staff Welfare at the Shenzhen Factory, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Hayco Shenzhen 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.
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.
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. Hayco Shenzhen 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. Hayco Shenzhen 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.
Building a culture of innovation
– managers at Hayco Shenzhen 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.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hayco Shenzhen can use these opportunities to build new business models that can help the communities that Hayco Shenzhen operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hayco Shenzhen 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.
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 -
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.
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 .
Stagnating economy with rate increase
– Hayco Shenzhen 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 field.
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.
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.
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.
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.
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.
Technology acceleration in Forth Industrial Revolution
– Hayco Shenzhen has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Hayco Shenzhen 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.
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 Hayco Shenzhen in the Organizational Development sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Hayco Shenzhen 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. 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.
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.
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.