VirtualChina.com: The Building of a Virtual Community SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of VirtualChina.com: The Building of a Virtual Community
In February 1997, Xindeco became the first Chinese technology company to list publicly. Buoyed by its successes, the ChinaVista site attempted to expand and become a "gateway," or niche portal, for international interest in China. With the basic ChinaVista site still garnering critical respect and foreign companies approaching the site's developers for assistance in entering the China market, a new business plan and a new site were created, which focused on aggregating members rather than (solely concentrating on) information resources--and thereby building loyalty. Their focus allowed the developers to realize the existence of a community peculiar to cyberspace, that of the "virtual foreign China-interested community"--a community dispersed around the world but united by a common interest in the commercial development in China.
Swot Analysis of "VirtualChina.com: The Building of a Virtual Community" written by Ali F. Farhoomand, Peter Lovelock includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Chinavista Community facing as an external strategic factors. Some of the topics covered in VirtualChina.com: The Building of a Virtual Community case study are - Strategic Management Strategies, Internet and Sales & Marketing.
Some of the macro environment factors that can be used to understand the VirtualChina.com: The Building of a Virtual Community casestudy better are - – supply chains are disrupted by pandemic , wage bills are increasing, challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption,
increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of VirtualChina.com: The Building of a Virtual Community
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in VirtualChina.com: The Building of a Virtual Community case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Chinavista Community, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Chinavista Community 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 VirtualChina.com: The Building of a Virtual Community can be done for the following purposes –
1. Strategic planning using facts provided in VirtualChina.com: The Building of a Virtual Community case study
2. Improving business portfolio management of Chinavista Community
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Chinavista Community
Strengths VirtualChina.com: The Building of a Virtual Community | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Chinavista Community in VirtualChina.com: The Building of a Virtual Community Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the VirtualChina.com: The Building of a Virtual Community 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.
Effective Research and Development (R&D)
– Chinavista Community 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 VirtualChina.com: The Building of a Virtual Community - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Chinavista Community in the sector have low bargaining power. VirtualChina.com: The Building of a Virtual Community has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Chinavista Community to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Chinavista Community has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in VirtualChina.com: The Building of a Virtual Community 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.
Diverse revenue streams
– Chinavista Community is present in almost all the verticals within the industry. This has provided firm in VirtualChina.com: The Building of a Virtual Community 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.
Cross disciplinary teams
– Horizontal connected teams at the Chinavista Community 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 Sales & Marketing field
– Chinavista Community 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 Chinavista Community in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Chinavista Community is one of the most innovative firm in sector. Manager in VirtualChina.com: The Building of a Virtual Community Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Chinavista Community 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 Chinavista Community is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in VirtualChina.com: The Building of a Virtual Community Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Chinavista Community
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Chinavista Community does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Chinavista Community 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 VirtualChina.com: The Building of a Virtual Community HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Chinavista Community 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.
Weaknesses VirtualChina.com: The Building of a Virtual Community | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of VirtualChina.com: The Building of a Virtual Community are -
High bargaining power of channel partners
– Because of the regulatory requirements, Ali F. Farhoomand, Peter Lovelock suggests that, Chinavista Community 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study VirtualChina.com: The Building of a Virtual Community, it seems that the employees of Chinavista Community don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High 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 Chinavista Community supply chain. Even after few cautionary changes mentioned in the HBR case study - VirtualChina.com: The Building of a Virtual Community, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Chinavista Community vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the VirtualChina.com: The Building of a Virtual Community HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Chinavista Community has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Chinavista Community, firm in the HBR case study VirtualChina.com: The Building of a Virtual Community needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Chinavista Community 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.
Slow decision making process
– As mentioned earlier in the report, Chinavista Community 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. Chinavista Community 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.
Need for greater diversity
– Chinavista Community 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.
High operating costs
– Compare to the competitors, firm in the HBR case study VirtualChina.com: The Building of a Virtual Community 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 Chinavista Community 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Chinavista Community 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.
Increasing silos among functional specialists
– The organizational structure of Chinavista Community is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Chinavista Community needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Chinavista Community to focus more on services rather than just following the product oriented approach.
Opportunities VirtualChina.com: The Building of a Virtual Community | 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 VirtualChina.com: The Building of a Virtual Community are -
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 Chinavista Community 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.
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. Chinavista Community can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Chinavista Community 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, Chinavista Community can use these opportunities to build new business models that can help the communities that Chinavista Community operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Chinavista Community can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Chinavista Community 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 Sales & Marketing segment.
Creating value in data economy
– The success of analytics program of Chinavista Community has opened avenues for new revenue streams for the organization in the industry. This can help Chinavista Community to build a more holistic ecosystem as suggested in the VirtualChina.com: The Building of a Virtual Community case study. Chinavista Community can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Chinavista Community can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Chinavista Community in the consumer business. Now Chinavista Community can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Chinavista Community can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing 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.
Developing new processes and practices
– Chinavista Community can develop new processes and procedures in Sales & Marketing 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Chinavista Community 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. Chinavista Community 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.
Using analytics as competitive advantage
– Chinavista Community 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 VirtualChina.com: The Building of a Virtual Community - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Chinavista Community to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats VirtualChina.com: The Building of a Virtual Community External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study VirtualChina.com: The Building of a Virtual Community are -
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. Chinavista Community needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Increasing wage structure of Chinavista Community
– 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 Chinavista Community.
Environmental challenges
– Chinavista Community 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. Chinavista Community can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
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 Chinavista Community business can come under increasing regulations regarding data privacy, data security, etc.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Stagnating economy with rate increase
– Chinavista Community 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.
High dependence on third party suppliers
– Chinavista Community 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.
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.
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 Chinavista Community.
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 Chinavista Community in the Sales & Marketing sector and impact the bottomline 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. Chinavista Community 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Chinavista Community 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 VirtualChina.com: The Building of a Virtual Community .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study VirtualChina.com: The Building of a Virtual Community, Chinavista Community may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Weighted SWOT Analysis of VirtualChina.com: The Building of a Virtual Community 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 VirtualChina.com: The Building of a Virtual Community 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 VirtualChina.com: The Building of a Virtual Community 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 VirtualChina.com: The Building of a Virtual Community 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 VirtualChina.com: The Building of a Virtual Community 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 Chinavista Community needs to make to build a sustainable competitive advantage.