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 - – challanges to central banks by blockchain based private currencies, geopolitical disruptions, technology disruption, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, wage bills are increasing,
competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, 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 -
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.
Innovation driven organization
– Midea Ified is one of the most innovative firm in sector. Manager in Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Midea Ified digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Midea Ified 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
– 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.
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.
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.
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.
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.
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.
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.
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.
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.
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 -
Need for greater diversity
– Midea Ified 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 operating costs
– Compare to the competitors, firm in the HBR case study Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer 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 Midea Ified 's lucrative customers.
Interest costs
– Compare to the competition, Midea Ified 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.
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.
Slow to strategic competitive environment developments
– As Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer HBR case study mentions - Midea Ified takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
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.
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.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer, is just above the industry average. Midea Ified 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.
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.
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.
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 -
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.
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.
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.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Midea Ified 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.
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.
Leveraging digital technologies
– Midea Ified 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.
Buying journey improvements
– Midea Ified can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer 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. Midea Ified 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. Midea Ified 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.
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.
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.
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 Midea Ified in the consumer business. Now Midea Ified can target international markets with far fewer capital restrictions requirements than the existing system.
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 -
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Midea: Globalization Challenge for a Leading Chinese Home Appliance Manufacturer, Midea Ified 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 .
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.
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Midea Ified with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Midea Ified has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Midea Ified needs to keep up with the evolution of technology in the Strategy & Execution 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 Midea Ified business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
Stagnating economy with rate increase
– Midea Ified 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.
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.
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.
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.
