Hengdeli: The Art of Coexistence SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Hengdeli: The Art of Coexistence
To maximize their effectiveness, color cases should be printed in color.In October 2011, Zhang Yuping, founder and chairman of Hengdeli, the largest Swiss watch retailer in the world, wondered how to work more closely with its key suppliers-Swatch Group, Richemont Group, LVMH Group, and Rolex Group-to maintain strong growth in the Greater China region. Specifically, how could Hengdeli manage the relationship with these suppliers to ensure getting more supply in a market where demand outgrew supply? How could Hengdeli balance the needs of these competing suppliers without being overreliant on one or two suppliers? How could it continue to expand its retail network to enhance its value and position? How could Hengdeli rationalize the portfolio management to maximize the return in the long-term?
Swot Analysis of "Hengdeli: The Art of Coexistence" written by Rohit Deshpande, Nancy Hua Dai includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hengdeli Suppliers facing as an external strategic factors. Some of the topics covered in Hengdeli: The Art of Coexistence case study are - Strategic Management Strategies, Supply chain and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Hengdeli: The Art of Coexistence casestudy better are - – central banks are concerned over increasing inflation, geopolitical disruptions, increasing government debt because of Covid-19 spendings, wage bills are increasing, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, cloud computing is disrupting traditional business models,
increasing energy prices, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Hengdeli: The Art of Coexistence
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hengdeli: The Art of Coexistence case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hengdeli Suppliers, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hengdeli Suppliers 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 Hengdeli: The Art of Coexistence can be done for the following purposes –
1. Strategic planning using facts provided in Hengdeli: The Art of Coexistence case study
2. Improving business portfolio management of Hengdeli Suppliers
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 Hengdeli Suppliers
Strengths Hengdeli: The Art of Coexistence | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hengdeli Suppliers in Hengdeli: The Art of Coexistence Harvard Business Review case study are -
Diverse revenue streams
– Hengdeli Suppliers is present in almost all the verticals within the industry. This has provided firm in Hengdeli: The Art of Coexistence 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 recruit top talent
– Hengdeli Suppliers is one of the leading recruiters in the industry. Managers in the Hengdeli: The Art of Coexistence are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Sales & Marketing industry
– Hengdeli: The Art of Coexistence firm has clearly differentiated products in the market place. This has enabled Hengdeli Suppliers to fetch slight price premium compare to the competitors in the Sales & Marketing industry. The sustainable margins have also helped Hengdeli Suppliers to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Hengdeli Suppliers in the sector have low bargaining power. Hengdeli: The Art of Coexistence has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hengdeli Suppliers to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Hengdeli Suppliers has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hengdeli Suppliers 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.
Digital Transformation in Sales & Marketing segment
- digital transformation varies from industry to industry. For Hengdeli Suppliers digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hengdeli Suppliers 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.
High brand equity
– Hengdeli Suppliers has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hengdeli Suppliers to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Hengdeli Suppliers 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 Hengdeli Suppliers 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.
Organizational Resilience of Hengdeli Suppliers
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Hengdeli Suppliers does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Hengdeli Suppliers 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 Hengdeli Suppliers is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Hengdeli: The Art of Coexistence Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Hengdeli Suppliers is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Hengdeli: The Art of Coexistence | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hengdeli: The Art of Coexistence are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Hengdeli: The Art of Coexistence 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 Hengdeli Suppliers has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Hengdeli: The Art of Coexistence 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 Hengdeli Suppliers 's lucrative customers.
Need for greater diversity
– Hengdeli Suppliers 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.
Slow to strategic competitive environment developments
– As Hengdeli: The Art of Coexistence HBR case study mentions - Hengdeli Suppliers 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.
Capital Spending Reduction
– Even during the low interest decade, Hengdeli Suppliers 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.
Skills based hiring
– The stress on hiring functional specialists at Hengdeli Suppliers 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Hengdeli Suppliers is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Hengdeli: The Art of Coexistence can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study Hengdeli: The Art of Coexistence, it seems that company is thinking about the frontier risks that can impact Sales & Marketing 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Hengdeli: The Art of Coexistence, in the dynamic environment Hengdeli Suppliers has struggled to respond to the nimble upstart competition. Hengdeli Suppliers has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Hengdeli Suppliers products
– To increase the profitability and margins on the products, Hengdeli Suppliers needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Hengdeli Suppliers 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 - Hengdeli: The Art of Coexistence should strive to include more intangible value offerings along with its core products and services.
Opportunities Hengdeli: The Art of Coexistence | 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 Hengdeli: The Art of Coexistence are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hengdeli Suppliers can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hengdeli Suppliers in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Loyalty marketing
– Hengdeli Suppliers 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.
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. Hengdeli Suppliers 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. Hengdeli Suppliers 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.
Leveraging digital technologies
– Hengdeli Suppliers 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.
Creating value in data economy
– The success of analytics program of Hengdeli Suppliers has opened avenues for new revenue streams for the organization in the industry. This can help Hengdeli Suppliers to build a more holistic ecosystem as suggested in the Hengdeli: The Art of Coexistence case study. Hengdeli Suppliers can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hengdeli Suppliers is facing challenges because of the dominance of functional experts in the organization. Hengdeli: The Art of Coexistence 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 Hengdeli Suppliers in the consumer business. Now Hengdeli Suppliers can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hengdeli Suppliers 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hengdeli Suppliers can use these opportunities to build new business models that can help the communities that Hengdeli Suppliers operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Developing new processes and practices
– Hengdeli Suppliers 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
– Hengdeli Suppliers 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.
Better consumer reach
– The expansion of the 5G network will help Hengdeli Suppliers to increase its market reach. Hengdeli Suppliers 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.
Threats Hengdeli: The Art of Coexistence External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Hengdeli: The Art of Coexistence are -
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hengdeli Suppliers 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 Hengdeli: The Art of Coexistence .
Shortening product life cycle
– it is one of the major threat that Hengdeli Suppliers is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Hengdeli Suppliers needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Hengdeli Suppliers 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.
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 Hengdeli Suppliers business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Hengdeli Suppliers has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Hengdeli Suppliers 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.
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.
Regulatory challenges
– Hengdeli Suppliers 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 Sales & Marketing industry regulations.
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 Hengdeli Suppliers in the Sales & Marketing sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Hengdeli Suppliers 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.
Increasing wage structure of Hengdeli Suppliers
– 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 Hengdeli Suppliers.
Consumer confidence and its impact on Hengdeli Suppliers 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.
Weighted SWOT Analysis of Hengdeli: The Art of Coexistence 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 Hengdeli: The Art of Coexistence 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 Hengdeli: The Art of Coexistence 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 Hengdeli: The Art of Coexistence 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 Hengdeli: The Art of Coexistence 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 Hengdeli Suppliers needs to make to build a sustainable competitive advantage.
