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 - – competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, increasing commodity prices, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, increasing transportation and logistics costs,
cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, 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 -
Training and development
– Zisco Steel has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Strategic Management at Zhujiang Iron and Steel 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.
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.
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.
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.
Organizational Resilience of Zisco Steel
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Zisco Steel does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
Analytics focus
– Zisco Steel is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Xueli Huang can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
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.
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.
Operational resilience
– The operational resilience strategy in the Strategic Management at Zhujiang Iron and Steel 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.
Digital Transformation in Organizational Development segment
- digital transformation varies from industry to industry. For Zisco Steel digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Zisco Steel 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
- 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.
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 -
Slow to strategic competitive environment developments
– As Strategic Management at Zhujiang Iron and Steel Company HBR case study mentions - Zisco Steel 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Zisco Steel 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.
Products dominated business model
– Even though Zisco Steel 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 - Strategic Management at Zhujiang Iron and Steel Company should strive to include more intangible value offerings along with its core products and services.
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.
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.
Lack of clear differentiation of Zisco Steel products
– To increase the profitability and margins on the products, Zisco Steel needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Zisco Steel supply chain. Even after few cautionary changes mentioned in the HBR case study - Strategic Management at Zhujiang Iron and Steel Company, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Zisco Steel vulnerable to further global disruptions in South East Asia.
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.
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.
Low market penetration in new markets
– Outside its home market of Zisco Steel, firm in the HBR case study Strategic Management at Zhujiang Iron and Steel Company needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Zisco Steel 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. Zisco Steel 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.
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 -
Manufacturing automation
– Zisco Steel 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.
Creating value in data economy
– The success of analytics program of Zisco Steel has opened avenues for new revenue streams for the organization in the industry. This can help Zisco Steel to build a more holistic ecosystem as suggested in the Strategic Management at Zhujiang Iron and Steel Company case study. Zisco Steel can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
Better consumer reach
– The expansion of the 5G network will help Zisco Steel to increase its market reach. Zisco Steel 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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Zisco Steel can use these opportunities to build new business models that can help the communities that Zisco Steel operates in. Secondly it can use opportunities from government spending in Organizational Development sector.
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.
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.
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.
Using analytics as competitive advantage
– Zisco Steel 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 Strategic Management at Zhujiang Iron and Steel Company - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Zisco Steel to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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.
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.
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 -
Shortening product life cycle
– it is one of the major threat that Zisco Steel is facing in Organizational Development sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
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.
Environmental challenges
– Zisco Steel 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. Zisco Steel can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
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.
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.
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.
Stagnating economy with rate increase
– Zisco Steel 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.
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 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Zisco Steel 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.
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.
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.