China's Interlaken: Competitive Advantage through Cultural Replication SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of China's Interlaken: Competitive Advantage through Cultural Replication
Interlaken Village in Shenzhen, China, is an exact replica of the Swiss village of Interlaken, which is part of OCT East, a US$450 million investment in the thriving Pearl River Delta. This is a management strategy case for students to think outside the box about business strategies. In standard competitive strategy literature, firms should avoid being imitated or imitating others in order to gain unique competitive advantages. This case, however, examines whether copying can be a sustainable source of competitive advantage.
Swot Analysis of "China's Interlaken: Competitive Advantage through Cultural Replication" written by Ali Farhoomand, Minyi Huang includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Interlaken Village facing as an external strategic factors. Some of the topics covered in China's Interlaken: Competitive Advantage through Cultural Replication case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the China's Interlaken: Competitive Advantage through Cultural Replication casestudy better are - – there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion,
increasing transportation and logistics costs, technology disruption, etc
Introduction to SWOT Analysis of China's Interlaken: Competitive Advantage through Cultural Replication
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in China's Interlaken: Competitive Advantage through Cultural Replication case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Interlaken Village, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Interlaken Village 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 China's Interlaken: Competitive Advantage through Cultural Replication can be done for the following purposes –
1. Strategic planning using facts provided in China's Interlaken: Competitive Advantage through Cultural Replication case study
2. Improving business portfolio management of Interlaken Village
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 Interlaken Village
Strengths China's Interlaken: Competitive Advantage through Cultural Replication | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Interlaken Village in China's Interlaken: Competitive Advantage through Cultural Replication Harvard Business Review case study are -
Sustainable margins compare to other players in Strategy & Execution industry
– China's Interlaken: Competitive Advantage through Cultural Replication firm has clearly differentiated products in the market place. This has enabled Interlaken Village to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Interlaken Village to invest into research and development (R&D) and innovation.
Strong track record of project management
– Interlaken Village is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High brand equity
– Interlaken Village has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Interlaken Village to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Interlaken Village digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Interlaken Village 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.
Innovation driven organization
– Interlaken Village is one of the most innovative firm in sector. Manager in China's Interlaken: Competitive Advantage through Cultural Replication Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Interlaken Village 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.
Learning organization
- Interlaken Village 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 Interlaken Village is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in China's Interlaken: Competitive Advantage through Cultural Replication Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Interlaken Village is one of the leading recruiters in the industry. Managers in the China's Interlaken: Competitive Advantage through Cultural Replication are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Strategy & Execution field
– Interlaken Village 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 Interlaken Village in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Interlaken Village has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Interlaken Village 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
– Interlaken Village has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in China's Interlaken: Competitive Advantage through Cultural Replication 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.
Analytics focus
– Interlaken Village 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 Ali Farhoomand, Minyi Huang 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.
Weaknesses China's Interlaken: Competitive Advantage through Cultural Replication | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of China's Interlaken: Competitive Advantage through Cultural Replication are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study China's Interlaken: Competitive Advantage through Cultural Replication, it seems that the employees of Interlaken Village 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the China's Interlaken: Competitive Advantage through Cultural Replication 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 Interlaken Village has relatively successful track record of launching new products.
No frontier risks strategy
– After analyzing the HBR case study China's Interlaken: Competitive Advantage through Cultural Replication, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study China's Interlaken: Competitive Advantage through Cultural Replication, is just above the industry average. Interlaken Village 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, Ali Farhoomand, Minyi Huang suggests that, Interlaken Village 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.
Slow decision making process
– As mentioned earlier in the report, Interlaken Village 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. Interlaken Village 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Interlaken Village 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.
Slow to strategic competitive environment developments
– As China's Interlaken: Competitive Advantage through Cultural Replication HBR case study mentions - Interlaken Village 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.
Skills based hiring
– The stress on hiring functional specialists at Interlaken Village has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Products dominated business model
– Even though Interlaken Village 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 - China's Interlaken: Competitive Advantage through Cultural Replication 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 China's Interlaken: Competitive Advantage through Cultural Replication, in the dynamic environment Interlaken Village has struggled to respond to the nimble upstart competition. Interlaken Village has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities China's Interlaken: Competitive Advantage through Cultural Replication | 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 China's Interlaken: Competitive Advantage through Cultural Replication are -
Better consumer reach
– The expansion of the 5G network will help Interlaken Village to increase its market reach. Interlaken Village 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.
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. Interlaken Village 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. Interlaken Village 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
– Interlaken Village 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.
Buying journey improvements
– Interlaken Village can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. China's Interlaken: Competitive Advantage through Cultural Replication 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.
Learning at scale
– Online learning technologies has now opened space for Interlaken Village 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Interlaken Village 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 Interlaken Village to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Interlaken Village 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.
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 Interlaken Village 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.
Leveraging digital technologies
– Interlaken Village 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.
Loyalty marketing
– Interlaken Village 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Interlaken Village can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Interlaken Village can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Interlaken Village in the consumer business. Now Interlaken Village can target international markets with far fewer capital restrictions requirements than the existing system.
Threats China's Interlaken: Competitive Advantage through Cultural Replication External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study China's Interlaken: Competitive Advantage through Cultural Replication are -
Stagnating economy with rate increase
– Interlaken Village 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.
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 Interlaken Village in the Strategy & Execution sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Interlaken Village 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.
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 Interlaken Village.
Environmental challenges
– Interlaken Village 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. Interlaken Village can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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 Interlaken Village business can come under increasing regulations regarding data privacy, data security, etc.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Interlaken Village 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.
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. Interlaken Village needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Consumer confidence and its impact on Interlaken Village 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.
Regulatory challenges
– Interlaken Village 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Interlaken Village 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 China's Interlaken: Competitive Advantage through Cultural Replication .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study China's Interlaken: Competitive Advantage through Cultural Replication, Interlaken Village 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 .
Weighted SWOT Analysis of China's Interlaken: Competitive Advantage through Cultural Replication 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 China's Interlaken: Competitive Advantage through Cultural Replication 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 China's Interlaken: Competitive Advantage through Cultural Replication 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 China's Interlaken: Competitive Advantage through Cultural Replication 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 China's Interlaken: Competitive Advantage through Cultural Replication 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 Interlaken Village needs to make to build a sustainable competitive advantage.