Case Study Description of Zuji: Finding a Winning Strategy
It was October 2015, Charlie Wong, CEO of Zuji Hong Kong told the media at the launch of Zuji's new brand campaign "Search, Discover and Share" that he would like to see Zuji "become the Google for travel" in Hong Kong. Indeed, a deemed pioneer and leading online travel agent ("OTA") in Hong Kong, the aspiration did not seem far-fetched. Yet, the ambition was not without challenge. Since Zuji went online in 2002, the brand had been twice sold and its geographic coverage shrunk from six to three markets: Hong Kong, Singapore and Australia. Online travel booking had been slow picking up in Hong Kong. After more than 10 years, online sales remained at under 10% of the total market in Hong Kong, compared to the regional average of 25% in Asia Pacific. As momentum built up, Wong predicted the online travel agent ("OTA") market to quadruple, from 10% in 2014 to 40% in 2016. Meantime, competition from multiple fronts was flooding the market. Global leader Expedia had launched Expedia.com.hk in 2013, and was investing heavily in marketing to capture share. Traditional offline agents were busy expanding their online presence, building a hybrid model as competitive advantage. At the consumer end, mobile phones have become an indispensable travel companion and its implication went beyond the migration from one platform to another. Around the world, the industry was seeing the rise of the millennia travellers with new needs and expectations while on the road, and they were changing the rules of the game. Zuji is facing the biggest opportunity of its time to ride this wave of change and reinforced its market leadership.
Swot Analysis of "Zuji: Finding a Winning Strategy" written by Kevin Zhou, Josephine Lau includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Zuji Kong facing as an external strategic factors. Some of the topics covered in Zuji: Finding a Winning Strategy case study are - Strategic Management Strategies, Marketing, Mobile and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Zuji: Finding a Winning Strategy casestudy better are - – increasing household debt because of falling income levels, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, technology disruption, wage bills are increasing, there is increasing trade war between United States & China, increasing energy prices,
there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Zuji: Finding a Winning Strategy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Zuji: Finding a Winning Strategy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Zuji Kong, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Zuji Kong 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 Zuji: Finding a Winning Strategy can be done for the following purposes –
1. Strategic planning using facts provided in Zuji: Finding a Winning Strategy case study
2. Improving business portfolio management of Zuji Kong
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 Zuji Kong
Strengths Zuji: Finding a Winning Strategy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Zuji Kong in Zuji: Finding a Winning Strategy Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Zuji Kong in the sector have low bargaining power. Zuji: Finding a Winning Strategy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Zuji Kong to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Zuji Kong 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 Zuji Kong is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Zuji: Finding a Winning Strategy Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Zuji Kong digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Zuji Kong 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.
Analytics focus
– Zuji Kong 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 Kevin Zhou, Josephine Lau 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.
Diverse revenue streams
– Zuji Kong is present in almost all the verticals within the industry. This has provided firm in Zuji: Finding a Winning Strategy 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.
Ability to lead change in Sales & Marketing field
– Zuji Kong 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 Zuji Kong in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Zuji Kong has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Zuji Kong to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Zuji Kong in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Zuji Kong 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.
Successful track record of launching new products
– Zuji Kong has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Zuji Kong 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.
Sustainable margins compare to other players in Sales & Marketing industry
– Zuji: Finding a Winning Strategy firm has clearly differentiated products in the market place. This has enabled Zuji Kong to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Zuji Kong to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Zuji Kong is one of the leading recruiters in the industry. Managers in the Zuji: Finding a Winning Strategy are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Zuji: Finding a Winning Strategy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Zuji: Finding a Winning Strategy are -
Slow decision making process
– As mentioned earlier in the report, Zuji Kong 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. Zuji Kong 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.
Products dominated business model
– Even though Zuji Kong 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 - Zuji: Finding a Winning Strategy should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Zuji: Finding a Winning Strategy 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 Zuji Kong has relatively successful track record of launching new products.
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 Zuji Kong supply chain. Even after few cautionary changes mentioned in the HBR case study - Zuji: Finding a Winning Strategy, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Zuji Kong vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Zuji Kong 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Zuji: Finding a Winning Strategy 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 Zuji Kong 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Zuji Kong, firm in the HBR case study Zuji: Finding a Winning Strategy needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Zuji: Finding a Winning Strategy, it seems that the employees of Zuji Kong 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Zuji: Finding a Winning Strategy, in the dynamic environment Zuji Kong has struggled to respond to the nimble upstart competition. Zuji Kong has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the segment, Zuji Kong 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.
Aligning sales with marketing
– It come across in the case study Zuji: Finding a Winning Strategy 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 Zuji: Finding a Winning Strategy can leverage the sales team experience to cultivate customer relationships as Zuji Kong is planning to shift buying processes online.
Opportunities Zuji: Finding a Winning Strategy | 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 Zuji: Finding a Winning Strategy are -
Loyalty marketing
– Zuji Kong 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Zuji Kong 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Zuji Kong is facing challenges because of the dominance of functional experts in the organization. Zuji: Finding a Winning Strategy 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.
Developing new processes and practices
– Zuji Kong 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.
Manufacturing automation
– Zuji Kong 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Zuji Kong 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, Zuji: Finding a Winning Strategy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Zuji Kong 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.
Using analytics as competitive advantage
– Zuji Kong 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 Zuji: Finding a Winning Strategy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Zuji Kong to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Zuji Kong can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Zuji: Finding a Winning Strategy 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. Zuji Kong can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Zuji Kong to increase its market reach. Zuji Kong 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Zuji Kong can use these opportunities to build new business models that can help the communities that Zuji Kong 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. Zuji Kong can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Zuji: Finding a Winning Strategy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Zuji: Finding a Winning Strategy are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Zuji Kong 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 Zuji: Finding a Winning Strategy .
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. Zuji Kong needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Zuji Kong in the Sales & Marketing industry. The Sales & Marketing 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 Zuji: Finding a Winning Strategy, Zuji Kong 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 .
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Zuji Kong can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Zuji Kong with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Zuji Kong
– 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 Zuji Kong.
Stagnating economy with rate increase
– Zuji Kong 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.
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. Zuji Kong 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.
Consumer confidence and its impact on Zuji Kong 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.
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 Zuji Kong in the Sales & Marketing sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Zuji Kong has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Zuji Kong needs to keep up with the evolution of technology in the Sales & Marketing 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.
Weighted SWOT Analysis of Zuji: Finding a Winning Strategy 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 Zuji: Finding a Winning Strategy 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 Zuji: Finding a Winning Strategy 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 Zuji: Finding a Winning Strategy 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 Zuji: Finding a Winning Strategy 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 Zuji Kong needs to make to build a sustainable competitive advantage.
