Strategic Management at Zhujiang Iron and Steel Company SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Organizational Development
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Strategic Management at Zhujiang Iron and Steel Company
Provides a detailed description of the process of strategic management, particularly strategy implementation, at Zhujiang Iron and Steel Company (ZISCo)--a Chinese state-owned enterprise. ZISCo, established in 1997, is a steel manufacturer and produces a range of steel sheets and plates used in manufacturing containers, industry-used gas bottles, steel pipes, white good appliances, and automobiles. In early 2003, ZISCo faced many problems in the key areas of production, procurement, and marketing, which largely resulted from the niche market strategy it was implementing at that time. In March 2003, Ruosheng Zhang was appointed as the new president of ZISCo. Since then, ZISCo has implemented a "value creation strategy" and undertaken a number of important functional reforms, with active participation from its employees. Consequently, its financial performance improved substantially during 2004-2006. Nevertheless, ZISCo still encountered various challenges in 2007, particularly in the areas of cultural change, knowledge management, and development of organizational competence and learning capability.
Swot Analysis of "Strategic Management at Zhujiang Iron and Steel Company" written by Xueli Huang includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Zisco Steel facing as an external strategic factors. Some of the topics covered in Strategic Management at Zhujiang Iron and Steel Company case study are - Strategic Management Strategies, Growth strategy, Strategy execution and Organizational Development.
Some of the macro environment factors that can be used to understand the Strategic Management at Zhujiang Iron and Steel Company casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, there is backlash against globalization, increasing transportation and logistics costs,
supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Strategic Management at Zhujiang Iron and Steel Company
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Strategic Management at Zhujiang Iron and Steel Company case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Zisco Steel, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Zisco Steel 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 Strategic Management at Zhujiang Iron and Steel Company can be done for the following purposes –
1. Strategic planning using facts provided in Strategic Management at Zhujiang Iron and Steel Company case study
2. Improving business portfolio management of Zisco Steel
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 Zisco Steel
Strengths Strategic Management at Zhujiang Iron and Steel Company | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Zisco Steel in Strategic Management at Zhujiang Iron and Steel Company Harvard Business Review case study are -
Highly skilled collaborators
– Zisco Steel 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 Strategic Management at Zhujiang Iron and Steel Company HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Zisco Steel 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.
Ability to lead change in Organizational Development field
– Zisco Steel 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 Zisco Steel in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Zisco Steel 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
– Zisco Steel is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Zisco Steel in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Zisco Steel 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 Zisco Steel is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Strategic Management at Zhujiang Iron and Steel Company Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Organizational Development industry
– Strategic Management at Zhujiang Iron and Steel Company firm has clearly differentiated products in the market place. This has enabled Zisco Steel to fetch slight price premium compare to the competitors in the Organizational Development industry. The sustainable margins have also helped Zisco Steel to invest into research and development (R&D) and innovation.
High brand equity
– Zisco Steel has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Zisco Steel to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Zisco Steel 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 Strategic Management at Zhujiang Iron and Steel Company - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Zisco Steel has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Zisco Steel 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.
Diverse revenue streams
– Zisco Steel is present in almost all the verticals within the industry. This has provided firm in Strategic Management at Zhujiang Iron and Steel Company 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.
Weaknesses Strategic Management at Zhujiang Iron and Steel Company | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Strategic Management at Zhujiang Iron and Steel Company are -
Increasing silos among functional specialists
– The organizational structure of Zisco Steel is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Zisco Steel needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Zisco Steel to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Zisco Steel 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Strategic Management at Zhujiang Iron and Steel Company, in the dynamic environment Zisco Steel has struggled to respond to the nimble upstart competition. Zisco Steel has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Zisco Steel 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
– Zisco Steel 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 Strategic Management at Zhujiang Iron and Steel Company, it seems that the employees of Zisco Steel 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.
No frontier risks strategy
– After analyzing the HBR case study Strategic Management at Zhujiang Iron and Steel Company, 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.
Aligning sales with marketing
– It come across in the case study Strategic Management at Zhujiang Iron and Steel 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 Strategic Management at Zhujiang Iron and Steel Company can leverage the sales team experience to cultivate customer relationships as Zisco Steel is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Strategic Management at Zhujiang Iron and Steel 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 Zisco Steel 's lucrative customers.
Interest costs
– Compare to the competition, Zisco Steel has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Capital Spending Reduction
– Even during the low interest decade, Zisco Steel 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.
Opportunities Strategic Management at Zhujiang Iron and Steel 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 Strategic Management at Zhujiang Iron and Steel Company are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Zisco Steel is facing challenges because of the dominance of functional experts in the organization. Strategic Management at Zhujiang Iron and Steel 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.
Building a culture of innovation
– managers at Zisco Steel 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.
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. Zisco Steel 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. Zisco Steel 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Zisco Steel 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Zisco Steel 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, Strategic Management at Zhujiang Iron and Steel 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.
Leveraging digital technologies
– Zisco Steel 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Zisco Steel can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Zisco Steel can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Strategic Management at Zhujiang Iron and Steel 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.
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. Zisco Steel can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Zisco Steel in the consumer business. Now Zisco Steel can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Zisco Steel 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.
Loyalty marketing
– Zisco Steel 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.
Learning at scale
– Online learning technologies has now opened space for Zisco Steel 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.
Threats Strategic Management at Zhujiang Iron and Steel Company External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Strategic Management at Zhujiang Iron and Steel Company are -
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. Zisco Steel 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.
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 Zisco Steel in the Organizational Development sector and impact the bottomline 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. Zisco Steel needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
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. Zisco Steel can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Zisco Steel
– 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 Zisco Steel.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Zisco Steel with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Zisco Steel has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Zisco Steel 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.
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 Zisco Steel business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Zisco Steel 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Strategic Management at Zhujiang Iron and Steel Company, Zisco Steel 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Zisco Steel 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 Strategic Management at Zhujiang Iron and Steel Company .
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Zisco Steel.
Weighted SWOT Analysis of Strategic Management at Zhujiang Iron and Steel 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 Strategic Management at Zhujiang Iron and Steel 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 Strategic Management at Zhujiang Iron and Steel 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 Strategic Management at Zhujiang Iron and Steel 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 Strategic Management at Zhujiang Iron and Steel 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 Zisco Steel needs to make to build a sustainable competitive advantage.