Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer
The managing director and director of overseas marketing of Midea Group, China's largest air-conditioner manufacturer, had concerns about the company's domestic and global competitive position. They felt the company needed to develop a strategy to defend its home market in the wake of more liberalized imports and, simultaneously, develop the resources and skills required to play in a global market where its cost advantages had been You can order --casename-- analysis and solution here ified because international players were also exporting from China. To do so, they needed to review the company's current international strategy and examine both branding and private label options.
Swot Analysis of "Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer" written by Niraj Dawar, Peter Yuan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Midea Ified facing as an external strategic factors. Some of the topics covered in Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer case study are - Strategic Management Strategies, Competition, Globalization, Strategic planning and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer casestudy better are - – increasing transportation and logistics costs, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, technology disruption, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, geopolitical disruptions,
increasing commodity prices, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Midea Ified, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Midea Ified 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 Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer can be done for the following purposes –
1. Strategic planning using facts provided in Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer case study
2. Improving business portfolio management of Midea Ified
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 Midea Ified
Strengths Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Midea Ified in Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer Harvard Business Review case study are -
Effective Research and Development (R&D)
– Midea Ified 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 Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Midea Ified is one of the leading recruiters in the industry. Managers in the Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Midea Ified has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Midea Ified 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer firm has clearly differentiated products in the market place. This has enabled Midea Ified to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Midea Ified to invest into research and development (R&D) and innovation.
Strong track record of project management
– Midea Ified 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
– Midea Ified 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 Midea Ified in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Midea Ified 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 Niraj Dawar, Peter Yuan 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.
Learning organization
- Midea Ified 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 Midea Ified is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Midea Ified is present in almost all the verticals within the industry. This has provided firm in Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer 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.
High switching costs
– The high switching costs that Midea Ified 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.
Superior customer experience
– The customer experience strategy of Midea Ified in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Midea Ified 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 Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer are -
Products dominated business model
– Even though Midea Ified 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 - Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Midea Ified is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Midea Ified needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Midea Ified to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Midea Ified has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Midea Ified is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer, in the dynamic environment Midea Ified has struggled to respond to the nimble upstart competition. Midea Ified has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer 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 Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer can leverage the sales team experience to cultivate customer relationships as Midea Ified is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, Niraj Dawar, Peter Yuan suggests that, Midea Ified is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Lack of clear differentiation of Midea Ified products
– To increase the profitability and margins on the products, Midea Ified needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Midea Ified 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Midea Ified 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.
Low market penetration in new markets
– Outside its home market of Midea Ified, firm in the HBR case study Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer | 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 Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer are -
Loyalty marketing
– Midea Ified 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.
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 Midea Ified 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Midea Ified is facing challenges because of the dominance of functional experts in the organization. Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Midea Ified can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Midea Ified 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 Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Midea Ified to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Midea Ified can use these opportunities to build new business models that can help the communities that Midea Ified operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Manufacturing automation
– Midea Ified 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.
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. Midea Ified can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Midea Ified has opened avenues for new revenue streams for the organization in the industry. This can help Midea Ified to build a more holistic ecosystem as suggested in the Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer case study. Midea Ified can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Midea Ified 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.
Building a culture of innovation
– managers at Midea Ified 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Midea Ified 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, Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Midea Ified to increase its market reach. Midea Ified 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 Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer are -
Increasing wage structure of Midea Ified
– 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 Midea Ified.
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 Midea Ified.
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. Midea Ified 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 Midea Ified 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.
Environmental challenges
– Midea Ified 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. Midea Ified can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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
– Midea Ified 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 Strategy & Execution industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Midea Ified 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Midea Ified 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 Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer .
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. Midea Ified needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Midea Ified is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Midea Ified in the Strategy & Execution sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Midea Ified 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.
Weighted SWOT Analysis of Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer 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 Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer 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 Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer 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 Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer 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 Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer 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 Midea Ified needs to make to build a sustainable competitive advantage.