Wanxiang Group: A Chinese Company's Global Strategy (B), Chinese Version SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Wanxiang Group: A Chinese Company's Global Strategy (B), Chinese Version
Supplements the A Case 308-058. With an almost forty-year history as a business in China, the Wanxiang Group has navigated through the significantly different political and economic changes in China to succeed as a global leader in the auto parts industry, and to develop into a broad business conglomerate. Beginning in 1994, when it first began its operations in the United States, Wanxiang started to expand its role as a parts supplier into a discerning acquirer of distressed companies in the U.S. While it saw acquisition as an exciting means for growth, company strategy at its Hangzhou, China headquarters also included vertical integration with a goal of developing a full-on electric car. Were these two goals divergent or complementary: mutually supportive or exclusive?
Authors :: William C. Kirby, Nancy Hua Dai, Erica M Zendell
Swot Analysis of "Wanxiang Group: A Chinese Company's Global Strategy (B), Chinese Version" written by William C. Kirby, Nancy Hua Dai, Erica M Zendell includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Wanxiang 058 facing as an external strategic factors. Some of the topics covered in Wanxiang Group: A Chinese Company's Global Strategy (B), Chinese Version case study are - Strategic Management Strategies, Entrepreneurship, International business, Marketing, Mergers & acquisitions, Performance measurement, Strategic planning, Strategy execution and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Wanxiang Group: A Chinese Company's Global Strategy (B), Chinese Version casestudy better are - – technology disruption, increasing government debt because of Covid-19 spendings, geopolitical disruptions, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs,
digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Wanxiang Group: A Chinese Company's Global Strategy (B), Chinese Version
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Wanxiang Group: A Chinese Company's Global Strategy (B), Chinese Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Wanxiang 058, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Wanxiang 058 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 Wanxiang Group: A Chinese Company's Global Strategy (B), Chinese Version can be done for the following purposes –
1. Strategic planning using facts provided in Wanxiang Group: A Chinese Company's Global Strategy (B), Chinese Version case study
2. Improving business portfolio management of Wanxiang 058
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 Wanxiang 058
Strengths Wanxiang Group: A Chinese Company's Global Strategy (B), Chinese Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Wanxiang 058 in Wanxiang Group: A Chinese Company's Global Strategy (B), Chinese Version Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Wanxiang 058 in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Wanxiang 058 is present in almost all the verticals within the industry. This has provided firm in Wanxiang Group: A Chinese Company's Global Strategy (B), 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.
Learning organization
- Wanxiang 058 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 Wanxiang 058 is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Wanxiang Group: A Chinese Company's Global Strategy (B), Chinese Version Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Wanxiang 058 digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Wanxiang 058 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.
Strong track record of project management
– Wanxiang 058 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
– Wanxiang 058 has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Wanxiang 058 to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Wanxiang 058 has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Wanxiang 058 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 Wanxiang 058 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.
Training and development
– Wanxiang 058 has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Wanxiang Group: A Chinese Company's Global Strategy (B), 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.
Analytics focus
– Wanxiang 058 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 William C. Kirby, Nancy Hua Dai, Erica M Zendell 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.
Effective Research and Development (R&D)
– Wanxiang 058 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 Wanxiang Group: A Chinese Company's Global Strategy (B), 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.
Operational resilience
– The operational resilience strategy in the Wanxiang Group: A Chinese Company's Global Strategy (B), Chinese Version Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Weaknesses Wanxiang Group: A Chinese Company's Global Strategy (B), Chinese Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Wanxiang Group: A Chinese Company's Global Strategy (B), Chinese Version are -
Slow to strategic competitive environment developments
– As Wanxiang Group: A Chinese Company's Global Strategy (B), Chinese Version HBR case study mentions - Wanxiang 058 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Wanxiang Group: A Chinese Company's Global Strategy (B), Chinese Version, in the dynamic environment Wanxiang 058 has struggled to respond to the nimble upstart competition. Wanxiang 058 has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study Wanxiang Group: A Chinese Company's Global Strategy (B), Chinese Version that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Wanxiang Group: A Chinese Company's Global Strategy (B), Chinese Version can leverage the sales team experience to cultivate customer relationships as Wanxiang 058 is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Wanxiang 058 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.
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 Wanxiang 058 supply chain. Even after few cautionary changes mentioned in the HBR case study - Wanxiang Group: A Chinese Company's Global Strategy (B), 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 Wanxiang 058 vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, Wanxiang 058 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.
Capital Spending Reduction
– Even during the low interest decade, Wanxiang 058 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Wanxiang 058 is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Wanxiang Group: A Chinese Company's Global Strategy (B), Chinese Version can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High cash cycle compare to competitors
Wanxiang 058 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.
Need for greater diversity
– Wanxiang 058 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.
Interest costs
– Compare to the competition, Wanxiang 058 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.
Opportunities Wanxiang Group: A Chinese Company's Global Strategy (B), 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 Wanxiang Group: A Chinese Company's Global Strategy (B), Chinese Version are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Wanxiang 058 can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Wanxiang 058 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.
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 Wanxiang 058 in the consumer business. Now Wanxiang 058 can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Wanxiang 058 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
– Wanxiang 058 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Wanxiang 058 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, Wanxiang Group: A Chinese Company's Global Strategy (B), 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.
Creating value in data economy
– The success of analytics program of Wanxiang 058 has opened avenues for new revenue streams for the organization in the industry. This can help Wanxiang 058 to build a more holistic ecosystem as suggested in the Wanxiang Group: A Chinese Company's Global Strategy (B), Chinese Version case study. Wanxiang 058 can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Wanxiang 058 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. Wanxiang 058 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Wanxiang 058 is facing challenges because of the dominance of functional experts in the organization. Wanxiang Group: A Chinese Company's Global Strategy (B), Chinese Version 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Wanxiang 058 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.
Buying journey improvements
– Wanxiang 058 can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Wanxiang Group: A Chinese Company's Global Strategy (B), 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.
Developing new processes and practices
– Wanxiang 058 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Wanxiang 058 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 Wanxiang 058 to hire the very best people irrespective of their geographical location.
Threats Wanxiang Group: A Chinese Company's Global Strategy (B), 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 Wanxiang Group: A Chinese Company's Global Strategy (B), Chinese Version are -
Environmental challenges
– Wanxiang 058 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. Wanxiang 058 can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Regulatory challenges
– Wanxiang 058 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.
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.
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. Wanxiang 058 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
– Wanxiang 058 has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Wanxiang 058 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.
Consumer confidence and its impact on Wanxiang 058 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Wanxiang 058 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 Wanxiang Group: A Chinese Company's Global Strategy (B), Chinese Version .
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 Wanxiang 058 business can come under increasing regulations regarding data privacy, data security, 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 Wanxiang 058.
Increasing wage structure of Wanxiang 058
– 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 Wanxiang 058.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Wanxiang Group: A Chinese Company's Global Strategy (B), Chinese Version, Wanxiang 058 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 Wanxiang 058 in the Strategy & Execution sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Wanxiang 058 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.
Weighted SWOT Analysis of Wanxiang Group: A Chinese Company's Global Strategy (B), 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 Wanxiang Group: A Chinese Company's Global Strategy (B), 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 Wanxiang Group: A Chinese Company's Global Strategy (B), 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 Wanxiang Group: A Chinese Company's Global Strategy (B), 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 Wanxiang Group: A Chinese Company's Global Strategy (B), 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 Wanxiang 058 needs to make to build a sustainable competitive advantage.