Chinese Fireworks Industry - Revised SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Chinese Fireworks Industry - Revised
The Chinese fireworks industry thrived after China adopted the open door policy in the late 1970s, and grew to make up 90 per cent of the world's fireworks export sales. However, starting from the mid-1990s, safety concerns led governments both in China and abroad to set up stricter regulations. At the same time, there was rapid growth in the number of small family-run fireworks workshops, whose relentless price-cutting drove down profit margins. Students are asked to undertake an industry analysis, estimate the industry attractiveness, and propose possible ways to improve the industry attractiveness from an individual investor's point of view. Jerry Yu is an American-born Chinese in New York who has been invited to buy a fireworks factory in Liuyang, Hunan.
Swot Analysis of "Chinese Fireworks Industry - Revised" written by Paul W. Beamish, Ruihua Jiang includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Fireworks Attractiveness facing as an external strategic factors. Some of the topics covered in Chinese Fireworks Industry - Revised case study are - Strategic Management Strategies, Market research and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Chinese Fireworks Industry - Revised casestudy better are - – talent flight as more people leaving formal jobs, wage bills are increasing, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google,
central banks are concerned over increasing inflation, there is backlash against globalization, etc
Introduction to SWOT Analysis of Chinese Fireworks Industry - Revised
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Chinese Fireworks Industry - Revised case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fireworks Attractiveness, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fireworks Attractiveness 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 Chinese Fireworks Industry - Revised can be done for the following purposes –
1. Strategic planning using facts provided in Chinese Fireworks Industry - Revised case study
2. Improving business portfolio management of Fireworks Attractiveness
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 Fireworks Attractiveness
Strengths Chinese Fireworks Industry - Revised | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fireworks Attractiveness in Chinese Fireworks Industry - Revised Harvard Business Review case study are -
Successful track record of launching new products
– Fireworks Attractiveness has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Fireworks Attractiveness 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.
Cross disciplinary teams
– Horizontal connected teams at the Fireworks Attractiveness 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.
Organizational Resilience of Fireworks Attractiveness
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Fireworks Attractiveness does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Fireworks Attractiveness 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 Chinese Fireworks Industry - Revised HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Fireworks Attractiveness has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Chinese Fireworks Industry - Revised 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
– Fireworks Attractiveness is present in almost all the verticals within the industry. This has provided firm in Chinese Fireworks Industry - Revised 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.
Strong track record of project management
– Fireworks Attractiveness is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Fireworks Attractiveness 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.
Ability to recruit top talent
– Fireworks Attractiveness is one of the leading recruiters in the industry. Managers in the Chinese Fireworks Industry - Revised are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Fireworks Attractiveness in the sector have low bargaining power. Chinese Fireworks Industry - Revised has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Fireworks Attractiveness to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Fireworks Attractiveness 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 Fireworks Attractiveness is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Chinese Fireworks Industry - Revised Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Fireworks Attractiveness is one of the most innovative firm in sector. Manager in Chinese Fireworks Industry - Revised Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Chinese Fireworks Industry - Revised | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Chinese Fireworks Industry - Revised are -
Need for greater diversity
– Fireworks Attractiveness 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Chinese Fireworks Industry - Revised 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 Fireworks Attractiveness has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Fireworks Attractiveness 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.
Products dominated business model
– Even though Fireworks Attractiveness 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 - Chinese Fireworks Industry - Revised should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Fireworks Attractiveness 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 to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Fireworks Attractiveness is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Chinese Fireworks Industry - Revised can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Fireworks Attractiveness products
– To increase the profitability and margins on the products, Fireworks Attractiveness needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Fireworks Attractiveness 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. Fireworks Attractiveness 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Chinese Fireworks Industry - Revised 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 Fireworks Attractiveness 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Fireworks Attractiveness is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Fireworks Attractiveness needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Fireworks Attractiveness to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Paul W. Beamish, Ruihua Jiang suggests that, Fireworks Attractiveness 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.
Opportunities Chinese Fireworks Industry - Revised | 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 Chinese Fireworks Industry - Revised are -
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 Fireworks Attractiveness in the consumer business. Now Fireworks Attractiveness can target international markets with far fewer capital restrictions requirements than the existing system.
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. Fireworks Attractiveness can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Fireworks Attractiveness can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Fireworks Attractiveness to increase its market reach. Fireworks Attractiveness 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, Fireworks Attractiveness can use these opportunities to build new business models that can help the communities that Fireworks Attractiveness operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Learning at scale
– Online learning technologies has now opened space for Fireworks Attractiveness to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Creating value in data economy
– The success of analytics program of Fireworks Attractiveness has opened avenues for new revenue streams for the organization in the industry. This can help Fireworks Attractiveness to build a more holistic ecosystem as suggested in the Chinese Fireworks Industry - Revised case study. Fireworks Attractiveness can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Fireworks Attractiveness 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.
Buying journey improvements
– Fireworks Attractiveness can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Chinese Fireworks Industry - Revised 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.
Developing new processes and practices
– Fireworks Attractiveness 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.
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 Fireworks Attractiveness 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.
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. Fireworks Attractiveness 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. Fireworks Attractiveness 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Fireworks Attractiveness to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Fireworks Attractiveness to hire the very best people irrespective of their geographical location.
Threats Chinese Fireworks Industry - Revised External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Chinese Fireworks Industry - Revised 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. Fireworks Attractiveness needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Consumer confidence and its impact on Fireworks Attractiveness 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Chinese Fireworks Industry - Revised, Fireworks Attractiveness 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 .
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.
Shortening product life cycle
– it is one of the major threat that Fireworks Attractiveness is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Fireworks Attractiveness business can come under increasing regulations regarding data privacy, data security, 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. Fireworks Attractiveness 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 acceleration in Forth Industrial Revolution
– Fireworks Attractiveness has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Fireworks Attractiveness 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Fireworks Attractiveness 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 Chinese Fireworks Industry - Revised .
Stagnating economy with rate increase
– Fireworks Attractiveness 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.
Environmental challenges
– Fireworks Attractiveness 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. Fireworks Attractiveness can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Fireworks Attractiveness with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Chinese Fireworks Industry - Revised 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 Chinese Fireworks Industry - Revised 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 Chinese Fireworks Industry - Revised 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 Chinese Fireworks Industry - Revised 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 Chinese Fireworks Industry - Revised 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 Fireworks Attractiveness needs to make to build a sustainable competitive advantage.
