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 - – customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, increasing household debt because of falling income levels, supply chains are disrupted by pandemic ,
there is backlash against globalization, increasing energy prices, 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 -
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.
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.
Operational resilience
– The operational resilience strategy in the Zuji: Finding a Winning Strategy 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.
Strong track record of project management
– Zuji Kong 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 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.
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.
Effective Research and Development (R&D)
– Zuji Kong 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 Zuji: Finding a Winning Strategy - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
Training and development
– Zuji Kong has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Zuji: Finding a Winning Strategy 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.
Organizational Resilience of Zuji Kong
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Zuji Kong does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
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 -
No frontier risks strategy
– After analyzing the HBR case study Zuji: Finding a Winning Strategy, 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Zuji Kong is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Zuji: Finding a Winning Strategy can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, Zuji Kong 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.
Need for greater diversity
– Zuji Kong 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.
Interest costs
– Compare to the competition, Zuji Kong has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Zuji: Finding a Winning Strategy, is just above the industry average. Zuji Kong needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Increasing silos among functional specialists
– The organizational structure of Zuji Kong is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Zuji Kong needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Zuji Kong to focus more on services rather than just following the product oriented approach.
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.
Lack of clear differentiation of Zuji Kong products
– To increase the profitability and margins on the products, Zuji Kong needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
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 -
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.
Learning at scale
– Online learning technologies has now opened space for Zuji Kong 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.
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.
Leveraging digital technologies
– Zuji Kong 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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Zuji Kong 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 Zuji Kong to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Zuji Kong has opened avenues for new revenue streams for the organization in the industry. This can help Zuji Kong to build a more holistic ecosystem as suggested in the Zuji: Finding a Winning Strategy case study. Zuji Kong can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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 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.
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.
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.
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 Zuji Kong in the consumer business. Now Zuji Kong can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Zuji Kong 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.
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 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.
Shortening product life cycle
– it is one of the major threat that Zuji Kong is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. 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.
High dependence on third party suppliers
– Zuji Kong 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.
Regulatory challenges
– Zuji Kong 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.
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.
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 Zuji Kong business can come under increasing regulations regarding data privacy, data security, etc.
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 .
Environmental challenges
– Zuji Kong 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. Zuji Kong can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
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 Zuji Kong.
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.
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 .
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.
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.
