Haier's U.S. Refrigerator Strategy 2005, Chinese Version SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Haier's U.S. Refrigerator Strategy 2005, Chinese Version
Haier, the first Chinese consumer durable brand in the United States, succeeded in the compact refrigerator, freezer, and air conditioner markets and then built a U.S. factory to enter the full-size market. Issues include the value of a local entrepreneur to the Asian manufacturer entering the United States; brand building and price positioning; the sourcing location decision trade-off between production costs and logistics costs; the role of change in the U.S. appliance distribution channels; global and regional competitive analysis; the response of U.S. competitors to the global sourcing evolution; and the time horizons of Chinese company management.
Authors :: Pankaj Ghemawat, Thomas M. Hout, Jordan Siegel
Swot Analysis of "Haier's U.S. Refrigerator Strategy 2005, Chinese Version" written by Pankaj Ghemawat, Thomas M. Hout, Jordan Siegel includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Refrigerator U.s facing as an external strategic factors. Some of the topics covered in Haier's U.S. Refrigerator Strategy 2005, Chinese Version case study are - Strategic Management Strategies, Costs, Globalization, Operations management, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Haier's U.S. Refrigerator Strategy 2005, Chinese Version casestudy better are - – challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, increasing transportation and logistics costs, wage bills are increasing, increasing energy prices, there is backlash against globalization, geopolitical disruptions,
digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Haier's U.S. Refrigerator Strategy 2005, Chinese Version
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Haier's U.S. Refrigerator Strategy 2005, Chinese Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Refrigerator U.s, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Refrigerator U.s 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 Haier's U.S. Refrigerator Strategy 2005, Chinese Version can be done for the following purposes –
1. Strategic planning using facts provided in Haier's U.S. Refrigerator Strategy 2005, Chinese Version case study
2. Improving business portfolio management of Refrigerator U.s
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 Refrigerator U.s
Strengths Haier's U.S. Refrigerator Strategy 2005, Chinese Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Refrigerator U.s in Haier's U.S. Refrigerator Strategy 2005, Chinese Version Harvard Business Review case study are -
Innovation driven organization
– Refrigerator U.s is one of the most innovative firm in sector. Manager in Haier's U.S. Refrigerator Strategy 2005, Chinese Version Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Refrigerator U.s in the sector have low bargaining power. Haier's U.S. Refrigerator Strategy 2005, Chinese Version has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Refrigerator U.s to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Refrigerator U.s is present in almost all the verticals within the industry. This has provided firm in Haier's U.S. Refrigerator Strategy 2005, Chinese Version 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.
Ability to lead change in Strategy & Execution field
– Refrigerator U.s 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 Refrigerator U.s in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Refrigerator U.s 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.
Highly skilled collaborators
– Refrigerator U.s 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 Haier's U.S. Refrigerator Strategy 2005, Chinese Version HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Refrigerator U.s is one of the leading recruiters in the industry. Managers in the Haier's U.S. Refrigerator Strategy 2005, Chinese Version 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 Refrigerator U.s digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Refrigerator U.s 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.
Successful track record of launching new products
– Refrigerator U.s has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Refrigerator U.s 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.
Training and development
– Refrigerator U.s has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Haier's U.S. Refrigerator Strategy 2005, Chinese Version 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.
Effective Research and Development (R&D)
– Refrigerator U.s 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 Haier's U.S. Refrigerator Strategy 2005, Chinese Version - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Refrigerator U.s is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Haier's U.S. Refrigerator Strategy 2005, Chinese Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Haier's U.S. Refrigerator Strategy 2005, Chinese Version are -
High cash cycle compare to competitors
Refrigerator U.s 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 Haier's U.S. Refrigerator Strategy 2005, Chinese Version 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 Refrigerator U.s 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Haier's U.S. Refrigerator Strategy 2005, Chinese Version, is just above the industry average. Refrigerator U.s 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 bargaining power of channel partners
– Because of the regulatory requirements, Pankaj Ghemawat, Thomas M. Hout, Jordan Siegel suggests that, Refrigerator U.s 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 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 Refrigerator U.s supply chain. Even after few cautionary changes mentioned in the HBR case study - Haier's U.S. Refrigerator Strategy 2005, Chinese Version, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Refrigerator U.s vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Haier's U.S. Refrigerator Strategy 2005, Chinese Version HBR case study mentions - Refrigerator U.s 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.
Interest costs
– Compare to the competition, Refrigerator U.s 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.
Products dominated business model
– Even though Refrigerator U.s 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 - Haier's U.S. Refrigerator Strategy 2005, Chinese Version should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Haier's U.S. Refrigerator Strategy 2005, Chinese Version, in the dynamic environment Refrigerator U.s has struggled to respond to the nimble upstart competition. Refrigerator U.s has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Haier's U.S. Refrigerator Strategy 2005, Chinese Version, it seems that the employees of Refrigerator U.s don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Workers concerns about automation
– As automation is fast increasing in the segment, Refrigerator U.s 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.
Opportunities Haier's U.S. Refrigerator Strategy 2005, Chinese Version | 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 Haier's U.S. Refrigerator Strategy 2005, Chinese Version are -
Learning at scale
– Online learning technologies has now opened space for Refrigerator U.s 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.
Leveraging digital technologies
– Refrigerator U.s 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
– Refrigerator U.s can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Haier's U.S. Refrigerator Strategy 2005, Chinese Version 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.
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 Refrigerator U.s 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Refrigerator U.s 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 Refrigerator U.s to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Refrigerator U.s can use these opportunities to build new business models that can help the communities that Refrigerator U.s operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Refrigerator U.s 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, Haier's U.S. Refrigerator Strategy 2005, Chinese Version, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Refrigerator U.s 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.
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. Refrigerator U.s 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. Refrigerator U.s 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
– Refrigerator U.s 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.
Manufacturing automation
– Refrigerator U.s 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.
Loyalty marketing
– Refrigerator U.s 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.
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. Refrigerator U.s can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Haier's U.S. Refrigerator Strategy 2005, Chinese Version External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Haier's U.S. Refrigerator Strategy 2005, Chinese Version are -
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 Refrigerator U.s business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Refrigerator U.s 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.
Increasing wage structure of Refrigerator U.s
– 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 Refrigerator U.s.
Regulatory challenges
– Refrigerator U.s 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.
Environmental challenges
– Refrigerator U.s 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. Refrigerator U.s can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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. Refrigerator U.s needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Refrigerator U.s has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Refrigerator U.s 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.
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 Refrigerator U.s.
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 Refrigerator U.s with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Refrigerator U.s 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.
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.
Shortening product life cycle
– it is one of the major threat that Refrigerator U.s 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 Haier's U.S. Refrigerator Strategy 2005, Chinese Version 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 Haier's U.S. Refrigerator Strategy 2005, Chinese Version 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 Haier's U.S. Refrigerator Strategy 2005, Chinese Version 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 Haier's U.S. Refrigerator Strategy 2005, Chinese Version 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 Haier's U.S. Refrigerator Strategy 2005, Chinese Version 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 Refrigerator U.s needs to make to build a sustainable competitive advantage.