Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company
Digital China is the largest Chinese independent systems integrator (IBM and HP are larger). Describes their history and their current strategy and invites the student to advise them as to how they should continue to grow in the future. This is the closest China currently has to Infosys and their 7,700-person company is a very interesting, and today, a largely unknown organization outside of China.
Authors :: F. Warren McFarlan, Guoqing Chen, Kai Reimers, Xunhua Guo
Swot Analysis of "Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company" written by F. Warren McFarlan, Guoqing Chen, Kai Reimers, Xunhua Guo includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that China 7,700 facing as an external strategic factors. Some of the topics covered in Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company case study are - Strategic Management Strategies, and Organizational Development.
Some of the macro environment factors that can be used to understand the Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company casestudy better are - – digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, there is increasing trade war between United States & China, increasing energy prices, geopolitical disruptions, increasing household debt because of falling income levels, wage bills are increasing,
increasing government debt because of Covid-19 spendings, technology disruption, etc
Introduction to SWOT Analysis of Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the China 7,700, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which China 7,700 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 Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company can be done for the following purposes –
1. Strategic planning using facts provided in Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company case study
2. Improving business portfolio management of China 7,700
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 China 7,700
Strengths Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of China 7,700 in Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company 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.
Innovation driven organization
– China 7,700 is one of the most innovative firm in sector. Manager in Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Organizational Development industry
– Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company firm has clearly differentiated products in the market place. This has enabled China 7,700 to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped China 7,700 to invest into research and development (R&D) and innovation.
Training and development
– China 7,700 has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company 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.
Superior customer experience
– The customer experience strategy of China 7,700 in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of China 7,700 in the sector have low bargaining power. Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps China 7,700 to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the China 7,700 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.
Learning organization
- China 7,700 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 China 7,700 is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that China 7,700 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.
High brand equity
– China 7,700 has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled China 7,700 to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of China 7,700
– The covid-19 pandemic has put organizational resilience at the centre of everthing that China 7,700 does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For China 7,700 digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. China 7,700 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.
Weaknesses Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company are -
High bargaining power of channel partners
– Because of the regulatory requirements, F. Warren McFarlan, Guoqing Chen, Kai Reimers, Xunhua Guo suggests that, China 7,700 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.
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 China 7,700 supply chain. Even after few cautionary changes mentioned in the HBR case study - Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left China 7,700 vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company, in the dynamic environment China 7,700 has struggled to respond to the nimble upstart competition. China 7,700 has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company HBR case study mentions - China 7,700 takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company, is just above the industry average. China 7,700 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.
Increasing silos among functional specialists
– The organizational structure of China 7,700 is dominated by functional specialists. It is not different from other players in the Organizational Development segment. China 7,700 needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help China 7,700 to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company 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 China 7,700 's lucrative customers.
Aligning sales with marketing
– It come across in the case study Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company 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 Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company can leverage the sales team experience to cultivate customer relationships as China 7,700 is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, China 7,700 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.
High cash cycle compare to competitors
China 7,700 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.
Need for greater diversity
– China 7,700 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.
Opportunities Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company | 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 Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, China 7,700 is facing challenges because of the dominance of functional experts in the organization. Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, China 7,700 can use these opportunities to build new business models that can help the communities that China 7,700 operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
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. China 7,700 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, China 7,700 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, Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help China 7,700 to increase its market reach. China 7,700 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
– China 7,700 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.
Buying journey improvements
– China 7,700 can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company 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.
Using analytics as competitive advantage
– China 7,700 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 Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company - to build a competitive advantage using analytics. The analytics driven competitive advantage can help China 7,700 to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for China 7,700 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.
Creating value in data economy
– The success of analytics program of China 7,700 has opened avenues for new revenue streams for the organization in the industry. This can help China 7,700 to build a more holistic ecosystem as suggested in the Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company case study. China 7,700 can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, China 7,700 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for China 7,700 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.
Building a culture of innovation
– managers at China 7,700 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.
Threats Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company are -
High dependence on third party suppliers
– China 7,700 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.
Environmental challenges
– China 7,700 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. China 7,700 can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Regulatory challenges
– China 7,700 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.
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 China 7,700 in the Organizational Development sector and impact the bottomline of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for China 7,700 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company, China 7,700 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 .
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.
Stagnating economy with rate increase
– China 7,700 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. China 7,700 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 China 7,700 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 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.
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. China 7,700 needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, China 7,700 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 Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company .
Weighted SWOT Analysis of Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company 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 Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company 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 Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company 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 Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company 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 Digital China Holdings Limited: Managing the Transition from a Product-oriented to a Service-oriented Company 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 China 7,700 needs to make to build a sustainable competitive advantage.
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