Lung Cheong International: How to Survive in a Changing Business Landscape SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of Lung Cheong International: How to Survive in a Changing Business Landscape
Lung Cheong International Holding Ltd. was founded in 1979 as an original equipment manufacturer (OEM) of toys in Hong Kong. As the mainland Chinese economy took off in the 1980s and 1990s, China became a great hinterland of cheap land and labor for low-tech manufacturing and also a huge and growing consumer market. Lung Cheong continuously felt the challenges of the changing business landscape. Should it move its production lines to the mainland or somewhere with similarly low cost levels? How should it deal with its major western and Japanese customers to maintain good relationships? Should it enter the huge mainland Chinese sales market? If so, how could it compete with mainland-based manufacturers that enjoyed lower production costs and could sell products very cheaply? How could it deal with rampant copyright piracy problems in the mainland market? Or should it focus instead on the West--in particular, the U.S. market?
Swot Analysis of "Lung Cheong International: How to Survive in a Changing Business Landscape" written by Bennett Yim, Vincent Mak includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Mainland Cheong facing as an external strategic factors. Some of the topics covered in Lung Cheong International: How to Survive in a Changing Business Landscape case study are - Strategic Management Strategies, Decision making, International business, Marketing and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Lung Cheong International: How to Survive in a Changing Business Landscape casestudy better are - – there is backlash against globalization, increasing government debt because of Covid-19 spendings, increasing energy prices, geopolitical disruptions, supply chains are disrupted by pandemic , increasing household debt because of falling income levels, central banks are concerned over increasing inflation,
talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Lung Cheong International: How to Survive in a Changing Business Landscape
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Lung Cheong International: How to Survive in a Changing Business Landscape case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Mainland Cheong, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Mainland Cheong 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 Lung Cheong International: How to Survive in a Changing Business Landscape can be done for the following purposes –
1. Strategic planning using facts provided in Lung Cheong International: How to Survive in a Changing Business Landscape case study
2. Improving business portfolio management of Mainland Cheong
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 Mainland Cheong
Strengths Lung Cheong International: How to Survive in a Changing Business Landscape | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Mainland Cheong in Lung Cheong International: How to Survive in a Changing Business Landscape Harvard Business Review case study are -
Ability to lead change in Strategy & Execution field
– Mainland Cheong 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 Mainland Cheong in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Mainland Cheong digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Mainland Cheong 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.
Learning organization
- Mainland Cheong 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 Mainland Cheong is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Lung Cheong International: How to Survive in a Changing Business Landscape Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Mainland Cheong 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 Bennett Yim, Vincent Mak 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.
Superior customer experience
– The customer experience strategy of Mainland Cheong in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Mainland Cheong in the sector have low bargaining power. Lung Cheong International: How to Survive in a Changing Business Landscape has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Mainland Cheong to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Mainland Cheong has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Mainland Cheong to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Mainland Cheong
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Mainland Cheong does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Strong track record of project management
– Mainland Cheong is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Mainland Cheong has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Mainland Cheong 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Lung Cheong International: How to Survive in a Changing Business Landscape firm has clearly differentiated products in the market place. This has enabled Mainland Cheong to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Mainland Cheong to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Mainland Cheong is present in almost all the verticals within the industry. This has provided firm in Lung Cheong International: How to Survive in a Changing Business Landscape 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 Lung Cheong International: How to Survive in a Changing Business Landscape | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Lung Cheong International: How to Survive in a Changing Business Landscape are -
Slow to strategic competitive environment developments
– As Lung Cheong International: How to Survive in a Changing Business Landscape HBR case study mentions - Mainland Cheong 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 Mainland Cheong 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.
Aligning sales with marketing
– It come across in the case study Lung Cheong International: How to Survive in a Changing Business Landscape 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 Lung Cheong International: How to Survive in a Changing Business Landscape can leverage the sales team experience to cultivate customer relationships as Mainland Cheong is planning to shift buying processes online.
Products dominated business model
– Even though Mainland Cheong 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 - Lung Cheong International: How to Survive in a Changing Business Landscape should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Mainland Cheong products
– To increase the profitability and margins on the products, Mainland Cheong needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Mainland Cheong 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. Mainland Cheong 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Lung Cheong International: How to Survive in a Changing Business Landscape 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 Mainland Cheong has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Mainland Cheong 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.
Capital Spending Reduction
– Even during the low interest decade, Mainland Cheong 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, Mainland Cheong is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Lung Cheong International: How to Survive in a Changing Business Landscape can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Lung Cheong International: How to Survive in a Changing Business Landscape, it seems that the employees of Mainland Cheong 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.
Opportunities Lung Cheong International: How to Survive in a Changing Business Landscape | 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 Lung Cheong International: How to Survive in a Changing Business Landscape are -
Learning at scale
– Online learning technologies has now opened space for Mainland Cheong 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.
Buying journey improvements
– Mainland Cheong can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Lung Cheong International: How to Survive in a Changing Business Landscape 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.
Building a culture of innovation
– managers at Mainland Cheong 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.
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. Mainland Cheong can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Mainland Cheong in the consumer business. Now Mainland Cheong can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Mainland Cheong 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Mainland Cheong is facing challenges because of the dominance of functional experts in the organization. Lung Cheong International: How to Survive in a Changing Business Landscape 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.
Using analytics as competitive advantage
– Mainland Cheong 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 Lung Cheong International: How to Survive in a Changing Business Landscape - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Mainland Cheong to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Mainland Cheong 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.
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 Mainland Cheong 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Mainland Cheong 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.
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. Mainland Cheong can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Mainland Cheong 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.
Threats Lung Cheong International: How to Survive in a Changing Business Landscape External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Lung Cheong International: How to Survive in a Changing Business Landscape are -
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. Mainland Cheong needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Regulatory challenges
– Mainland Cheong 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.
Shortening product life cycle
– it is one of the major threat that Mainland Cheong is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Mainland Cheong in the Strategy & Execution sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Mainland Cheong 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 Lung Cheong International: How to Survive in a Changing Business Landscape .
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 Mainland Cheong business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Mainland Cheong 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.
Environmental challenges
– Mainland Cheong 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. Mainland Cheong can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Stagnating economy with rate increase
– Mainland Cheong 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.
Increasing wage structure of Mainland Cheong
– 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 Mainland Cheong.
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 Mainland Cheong 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.
Technology acceleration in Forth Industrial Revolution
– Mainland Cheong has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Mainland Cheong 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.
Weighted SWOT Analysis of Lung Cheong International: How to Survive in a Changing Business Landscape 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 Lung Cheong International: How to Survive in a Changing Business Landscape 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 Lung Cheong International: How to Survive in a Changing Business Landscape 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 Lung Cheong International: How to Survive in a Changing Business Landscape 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 Lung Cheong International: How to Survive in a Changing Business Landscape 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 Mainland Cheong needs to make to build a sustainable competitive advantage.