Case Study Description of Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B)
Yanzhou Coal Mining Company Limited (Yanzhou Coal) is a listed company controlled by Yankuang Group Co., Ltd. (Yankuang Group) which is affiliated to the State-owned Assets Supervision and Administration Commission (SASAC) of Shandong Provincial Government, China. Yanzhou Coal have been listed in Hong Kong, New York and Shanghai respectively. It is mainly engaged in coal, coal chemical industry and power generation. In addition to the connotative development, Yanzhou Coal started to implement a strategy of denotative development after listing and seek coal projects in other cities outside Shandong Province or China. This case mainly introduces the process of Yanzhou Coal's acquisition of Austar Coal Mine, Felix Company, as well as Gloucester Coal Ltd. by exchanging shares, thus achieving listing in Australia.
Authors :: F. Warren McFarlan, Yongjun Jin, Xiaohui Li
Swot Analysis of "Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B)" written by F. Warren McFarlan, Yongjun Jin, Xiaohui Li includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Coal Yanzhou facing as an external strategic factors. Some of the topics covered in Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B) case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B) casestudy better are - – supply chains are disrupted by pandemic , competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, geopolitical disruptions, increasing commodity prices,
increasing household debt because of falling income levels, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Coal Yanzhou, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Coal Yanzhou 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 Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B) can be done for the following purposes –
1. Strategic planning using facts provided in Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B) case study
2. Improving business portfolio management of Coal Yanzhou
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Coal Yanzhou
Strengths Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Coal Yanzhou in Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B) Harvard Business Review case study are -
Strong track record of project management
– Coal Yanzhou is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Strategy & Execution field
– Coal Yanzhou 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 Coal Yanzhou in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Coal Yanzhou 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.
Superior customer experience
– The customer experience strategy of Coal Yanzhou in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Coal Yanzhou
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Coal Yanzhou does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Coal Yanzhou has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Coal Yanzhou 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.
Low bargaining power of suppliers
– Suppliers of Coal Yanzhou in the sector have low bargaining power. Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Coal Yanzhou to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Coal Yanzhou 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 F. Warren McFarlan, Yongjun Jin, Xiaohui Li 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B) firm has clearly differentiated products in the market place. This has enabled Coal Yanzhou to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Coal Yanzhou to invest into research and development (R&D) and innovation.
High brand equity
– Coal Yanzhou has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Coal Yanzhou to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Coal Yanzhou is present in almost all the verticals within the industry. This has provided firm in Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B) 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.
Highly skilled collaborators
– Coal Yanzhou 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 Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B) are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B) 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 Coal Yanzhou has relatively successful track record of launching new products.
Aligning sales with marketing
– It come across in the case study Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B) 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 Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B) can leverage the sales team experience to cultivate customer relationships as Coal Yanzhou is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Coal Yanzhou 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.
Lack of clear differentiation of Coal Yanzhou products
– To increase the profitability and margins on the products, Coal Yanzhou needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Coal Yanzhou 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 - Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B) should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of Coal Yanzhou, firm in the HBR case study Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B), in the dynamic environment Coal Yanzhou has struggled to respond to the nimble upstart competition. Coal Yanzhou has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Coal Yanzhou 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 cash cycle compare to competitors
Coal Yanzhou 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 Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B) 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 Coal Yanzhou 's lucrative customers.
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 Coal Yanzhou supply chain. Even after few cautionary changes mentioned in the HBR case study - Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Coal Yanzhou vulnerable to further global disruptions in South East Asia.
Opportunities Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B) | 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 Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B) are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Coal Yanzhou 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, Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Coal Yanzhou can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Building a culture of innovation
– managers at Coal Yanzhou 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 Strategy & Execution segment.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Coal Yanzhou is facing challenges because of the dominance of functional experts in the organization. Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B) 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Coal Yanzhou 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 Coal Yanzhou to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Coal Yanzhou in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Coal Yanzhou has opened avenues for new revenue streams for the organization in the industry. This can help Coal Yanzhou to build a more holistic ecosystem as suggested in the Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B) case study. Coal Yanzhou can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Coal Yanzhou can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Coal Yanzhou can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B) 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Coal Yanzhou 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. Coal Yanzhou 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.
Developing new processes and practices
– Coal Yanzhou can develop new processes and procedures in Strategy & Execution 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 Coal Yanzhou 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.
Using analytics as competitive advantage
– Coal Yanzhou 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 Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Coal Yanzhou to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B) are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B), Coal Yanzhou may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Stagnating economy with rate increase
– Coal Yanzhou 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.
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 Coal Yanzhou.
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. Coal Yanzhou 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 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.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Coal Yanzhou can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Coal Yanzhou 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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Coal Yanzhou with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Coal Yanzhou is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Coal Yanzhou in the Strategy & Execution industry. The Strategy & Execution 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.
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 Coal Yanzhou business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Coal Yanzhou 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. Coal Yanzhou can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Weighted SWOT Analysis of Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B) 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 Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B) 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 Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B) 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 Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B) 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 Yanzhou Coal Mining Company Limited: Overseas Acquisitions (B) 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 Coal Yanzhou needs to make to build a sustainable competitive advantage.