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 - – challanges to central banks by blockchain based private currencies, increasing commodity prices, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, technology disruption, talent flight as more people leaving formal jobs, increasing energy prices,
banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , 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 -
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.
High switching costs
– The high switching costs that Interlaken Village 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.
Organizational Resilience of Interlaken Village
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Interlaken Village does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
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.
Highly skilled collaborators
– Interlaken Village 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 China's Interlaken: Competitive Advantage through Cultural Replication HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
Superior customer experience
– The customer experience strategy of Interlaken Village in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
Diverse revenue streams
– Interlaken Village is present in almost all the verticals within the industry. This has provided firm in China's Interlaken: Competitive Advantage through Cultural Replication 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.
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 -
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.
High cash cycle compare to competitors
Interlaken Village 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.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Interlaken Village is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study China's Interlaken: Competitive Advantage through Cultural Replication can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Interlaken Village, firm in the HBR case study China's Interlaken: Competitive Advantage through Cultural Replication needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Interlaken Village supply chain. Even after few cautionary changes mentioned in the HBR case study - China's Interlaken: Competitive Advantage through Cultural Replication, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Interlaken Village vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study China's Interlaken: Competitive Advantage through Cultural Replication 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 Interlaken Village 's lucrative customers.
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.
Increasing silos among functional specialists
– The organizational structure of Interlaken Village is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Interlaken Village needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Interlaken Village to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Interlaken Village 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.
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.
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 -
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.
Building a culture of innovation
– managers at Interlaken Village 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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Interlaken Village can use these opportunities to build new business models that can help the communities that Interlaken Village operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Interlaken Village is facing challenges because of the dominance of functional experts in the organization. China's Interlaken: Competitive Advantage through Cultural Replication 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.
Manufacturing automation
– Interlaken Village 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.
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.
Using analytics as competitive advantage
– Interlaken Village 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 China's Interlaken: Competitive Advantage through Cultural Replication - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Interlaken Village to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Interlaken Village can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Interlaken Village has opened avenues for new revenue streams for the organization in the industry. This can help Interlaken Village to build a more holistic ecosystem as suggested in the China's Interlaken: Competitive Advantage through Cultural Replication case study. Interlaken Village can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 -
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.
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. Interlaken Village can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Technology acceleration in Forth Industrial Revolution
– Interlaken Village has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Interlaken Village 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.
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 .
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.
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.
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 .
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.
Increasing wage structure of Interlaken Village
– 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 Interlaken Village.
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 Interlaken Village is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Interlaken Village 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.
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.