Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys
On June 8, 2003, Dream International signed a contract with Warner Bros. to manufacture licensed beanbags and plush stuffed toys using famous branded characters such as Looney Tunes and Tom & Jerry. The contract allowed Dream to distribute its character product through Warner-appointed distributors worldwide, except for the U.S. territories and Canada. For Dream, the contract not only added a new revenue source but also provided a stepping stone to eventually sell character brands and other plush toy products directly to retailers. Despite Dream's remarkable growth, Chairman and founder Kyoo Yoon Choi, who was in his 50s and based in Seoul, was not satisfied with the size of the operation. In the highly fragmented plush toy market, Dream had less than a 2% share of the global market. Choi's goal was at least 5% to 6%. What was Dream's strategic plan for achieving this target? Was vertical integration the best way forward? What were the success factors that built Dream into the world's largest manufacturer of plush toys?
Swot Analysis of "Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys" written by Simon Tam, Monica Wong includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Plush Dream facing as an external strategic factors. Some of the topics covered in Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys case study are - Strategic Management Strategies, Manufacturing, Marketing, Mergers & acquisitions, Negotiations, Strategic planning and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation,
customer relationship management is fast transforming because of increasing concerns over data privacy, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Plush Dream, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Plush Dream 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 Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys can be done for the following purposes –
1. Strategic planning using facts provided in Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys case study
2. Improving business portfolio management of Plush Dream
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 Plush Dream
Strengths Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Plush Dream in Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys Harvard Business Review case study are -
Highly skilled collaborators
– Plush Dream 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 Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Plush Dream is one of the most innovative firm in sector. Manager in Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Plush Dream in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Plush Dream is one of the leading recruiters in the industry. Managers in the Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Plush Dream in the sector have low bargaining power. Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Plush Dream to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Strategy & Execution field
– Plush Dream 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 Plush Dream in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Plush Dream 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 Simon Tam, Monica Wong 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.
Training and development
– Plush Dream has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys 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.
Operational resilience
– The operational resilience strategy in the Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys 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.
Organizational Resilience of Plush Dream
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Plush Dream does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Plush Dream 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 Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Plush Dream 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.
Weaknesses Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys are -
Capital Spending Reduction
– Even during the low interest decade, Plush Dream 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.
Interest costs
– Compare to the competition, Plush Dream 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.
High cash cycle compare to competitors
Plush Dream 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.
Slow to strategic competitive environment developments
– As Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys HBR case study mentions - Plush Dream 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Plush Dream 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.
Increasing silos among functional specialists
– The organizational structure of Plush Dream is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Plush Dream needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Plush Dream to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Plush Dream 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Plush Dream is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys, in the dynamic environment Plush Dream has struggled to respond to the nimble upstart competition. Plush Dream has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow decision making process
– As mentioned earlier in the report, Plush Dream 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. Plush Dream 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.
Aligning sales with marketing
– It come across in the case study Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys 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 Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys can leverage the sales team experience to cultivate customer relationships as Plush Dream is planning to shift buying processes online.
Opportunities Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys | 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 Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Plush Dream is facing challenges because of the dominance of functional experts in the organization. Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys 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.
Learning at scale
– Online learning technologies has now opened space for Plush Dream 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 Plush Dream 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 Plush Dream to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Plush Dream can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Plush Dream 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.
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. Plush Dream can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Plush Dream to increase its market reach. Plush Dream 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.
Manufacturing automation
– Plush Dream 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
– Plush Dream has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Plush Dream can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
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 Plush Dream in the consumer business. Now Plush Dream can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Plush Dream 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Plush Dream 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, Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys are -
Technology acceleration in Forth Industrial Revolution
– Plush Dream has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Plush Dream 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.
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. Plush Dream 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.
Stagnating economy with rate increase
– Plush Dream 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Plush Dream with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Plush Dream 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 wage structure of Plush Dream
– 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 Plush Dream.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Plush Dream 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.
Environmental challenges
– Plush Dream 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. Plush Dream can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Shortening product life cycle
– it is one of the major threat that Plush Dream is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Plush Dream 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 Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys .
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 Plush Dream business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Plush Dream 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.
Weighted SWOT Analysis of Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys 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 Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys 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 Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys 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 Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys 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 Dream International Ltd.: Creating the World's Largest Manufacturer of Plush Toys 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 Plush Dream needs to make to build a sustainable competitive advantage.