Case Study Description of Meizhou Dongpo Restaurant Group
Since the establishment of the first Meizhou Dongpo Restaurant in Beijing in 1996, Wang Gang and his wife Liang Di have opened more than 100 chain restaurants in China and foreign countries, and set up the group headquarters, logistics center, R&D center and central kitchen. Meizhou Dongpo has grown into one of the most stable large catering enterprises in China. The enterprise entered the stage of rapid development in 2000. Meizhou Dongpo Group has annual operating revenue of over RMB 1.8 billion, accumulative consumers of over 20 million persons-times and more than 8,000 employees. Meizhou Dongpo has transformed its small-restaurant operation model at beginning into present operation model of large catering group chain. Wang Gang believed Meizhou Dongpo must take the path of standardization to become a large-scale Chinese cuisine chain enterprise. Standardized management has always been the most important development strategy at Meizhou Dongpo. Wang Gang accelerated the standardized management of Meizhou Dongpo after 2000, realizing production and processing standardization, management standardization and service standardization. The year 2013 was important to Meizhou Dongpo. On December 18, 2013, Meizhou Dongpo Beverly Restaurant in Los Angeles was opened, and "Wangjiadu" series products of Meizhou Dongpo were also sold at various supermarkets in the U.S., marking a step of internationalization taken by Meizhou Dongpo. Regular chain, standardization strategy and international development are priorities of this case.
Swot Analysis of "Meizhou Dongpo Restaurant Group" written by F. Warren McFarlan, Weiku Wu, Jia Guo includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Dongpo Meizhou facing as an external strategic factors. Some of the topics covered in Meizhou Dongpo Restaurant Group case study are - Strategic Management Strategies, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Meizhou Dongpo Restaurant Group casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, increasing household debt because of falling income levels, there is backlash against globalization, technology disruption, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy,
digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Meizhou Dongpo Restaurant Group
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Meizhou Dongpo Restaurant Group case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Dongpo Meizhou, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Dongpo Meizhou 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 Meizhou Dongpo Restaurant Group can be done for the following purposes –
1. Strategic planning using facts provided in Meizhou Dongpo Restaurant Group case study
2. Improving business portfolio management of Dongpo Meizhou
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 Dongpo Meizhou
Strengths Meizhou Dongpo Restaurant Group | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Dongpo Meizhou in Meizhou Dongpo Restaurant Group Harvard Business Review case study are -
Training and development
– Dongpo Meizhou has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Meizhou Dongpo Restaurant Group 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.
Ability to recruit top talent
– Dongpo Meizhou is one of the leading recruiters in the industry. Managers in the Meizhou Dongpo Restaurant Group are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Dongpo Meizhou digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Dongpo Meizhou 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.
Diverse revenue streams
– Dongpo Meizhou is present in almost all the verticals within the industry. This has provided firm in Meizhou Dongpo Restaurant Group 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.
Innovation driven organization
– Dongpo Meizhou is one of the most innovative firm in sector. Manager in Meizhou Dongpo Restaurant Group Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Dongpo Meizhou in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Dongpo Meizhou in the sector have low bargaining power. Meizhou Dongpo Restaurant Group has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Dongpo Meizhou to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Dongpo Meizhou 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.
Operational resilience
– The operational resilience strategy in the Meizhou Dongpo Restaurant Group 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.
Ability to lead change in Strategy & Execution field
– Dongpo Meizhou 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 Dongpo Meizhou in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Dongpo Meizhou
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Dongpo Meizhou does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Strategy & Execution industry
– Meizhou Dongpo Restaurant Group firm has clearly differentiated products in the market place. This has enabled Dongpo Meizhou to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Dongpo Meizhou to invest into research and development (R&D) and innovation.
Weaknesses Meizhou Dongpo Restaurant Group | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Meizhou Dongpo Restaurant Group are -
Lack of clear differentiation of Dongpo Meizhou products
– To increase the profitability and margins on the products, Dongpo Meizhou needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Dongpo Meizhou supply chain. Even after few cautionary changes mentioned in the HBR case study - Meizhou Dongpo Restaurant Group, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Dongpo Meizhou vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Dongpo Meizhou 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Meizhou Dongpo Restaurant Group 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 Dongpo Meizhou 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Dongpo Meizhou 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. Dongpo Meizhou 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.
Interest costs
– Compare to the competition, Dongpo Meizhou 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 cash cycle compare to competitors
Dongpo Meizhou 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Meizhou Dongpo Restaurant Group, is just above the industry average. Dongpo Meizhou 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Meizhou Dongpo Restaurant Group 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 Dongpo Meizhou has relatively successful track record of launching new products.
Products dominated business model
– Even though Dongpo Meizhou 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 - Meizhou Dongpo Restaurant Group should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Dongpo Meizhou is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Dongpo Meizhou needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Dongpo Meizhou to focus more on services rather than just following the product oriented approach.
Opportunities Meizhou Dongpo Restaurant Group | 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 Meizhou Dongpo Restaurant Group are -
Creating value in data economy
– The success of analytics program of Dongpo Meizhou has opened avenues for new revenue streams for the organization in the industry. This can help Dongpo Meizhou to build a more holistic ecosystem as suggested in the Meizhou Dongpo Restaurant Group case study. Dongpo Meizhou can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Dongpo Meizhou 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, Meizhou Dongpo Restaurant Group, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Dongpo Meizhou 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.
Leveraging digital technologies
– Dongpo Meizhou 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Dongpo Meizhou 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.
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. Dongpo Meizhou can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Dongpo Meizhou 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. Dongpo Meizhou 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.
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 Dongpo Meizhou in the consumer business. Now Dongpo Meizhou can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Dongpo Meizhou 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Dongpo Meizhou can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Dongpo Meizhou 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.
Better consumer reach
– The expansion of the 5G network will help Dongpo Meizhou to increase its market reach. Dongpo Meizhou 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Dongpo Meizhou is facing challenges because of the dominance of functional experts in the organization. Meizhou Dongpo Restaurant Group 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.
Threats Meizhou Dongpo Restaurant Group External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Meizhou Dongpo Restaurant Group are -
Environmental challenges
– Dongpo Meizhou 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. Dongpo Meizhou can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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. Dongpo Meizhou can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Dongpo Meizhou 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 Meizhou Dongpo Restaurant Group .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Meizhou Dongpo Restaurant Group, Dongpo Meizhou 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 .
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 Dongpo Meizhou in the Strategy & Execution sector and impact the bottomline of the organization.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Dongpo Meizhou 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.
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.
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. Dongpo Meizhou needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Increasing wage structure of Dongpo Meizhou
– 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 Dongpo Meizhou.
Stagnating economy with rate increase
– Dongpo Meizhou can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Dongpo Meizhou 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.
Shortening product life cycle
– it is one of the major threat that Dongpo Meizhou is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Meizhou Dongpo Restaurant Group 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 Meizhou Dongpo Restaurant Group 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 Meizhou Dongpo Restaurant Group 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 Meizhou Dongpo Restaurant Group 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 Meizhou Dongpo Restaurant Group 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 Dongpo Meizhou needs to make to build a sustainable competitive advantage.
