Case Study Description of Beijing Weihao Aluminum (Group) Co., Ltd.
Zhang Zhengxi resigned from a state-owned company (SOE) in 1992 and set up Nanchen Aluminum Ltd. in 1995. Through a combination of joint ventures and outsourcing, Nanchen Aluminum utilized external resources to expand its business. After a series of acquisitions, Zhang successfully established Beijing Weihao Aluminum Group, which had assets of 400 million yuan. At present, Weihao Group was planning to initiate two projects with a total investment of nearly 200 million yuan. Besides Weihao Group, Nanchen Aluminum also invested in three joint ventures: Tianhong Food Ltd., Tianhong Agriculture Ltd., and Nanchen Information Technology Ltd., The rapid expansion imposes a great challenge on Zhang's management ability. Meanwhile, the so-called SOE syndrome appeared with the eclipse of enterprising stimulus, because most employees had been employed by SOEs before joining Weihao Group.
Swot Analysis of "Beijing Weihao Aluminum (Group) Co., Ltd." written by Shengjun Liu includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Weihao Nanchen facing as an external strategic factors. Some of the topics covered in Beijing Weihao Aluminum (Group) Co., Ltd. case study are - Strategic Management Strategies, Joint ventures, Mergers & acquisitions, Risk management and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Beijing Weihao Aluminum (Group) Co., Ltd. casestudy better are - – cloud computing is disrupting traditional business models, customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, there is backlash against globalization, increasing commodity prices, digital marketing is dominated by two big players Facebook and Google,
supply chains are disrupted by pandemic , there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Beijing Weihao Aluminum (Group) Co., Ltd.
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Beijing Weihao Aluminum (Group) Co., Ltd. case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Weihao Nanchen, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Weihao Nanchen 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 Beijing Weihao Aluminum (Group) Co., Ltd. can be done for the following purposes –
1. Strategic planning using facts provided in Beijing Weihao Aluminum (Group) Co., Ltd. case study
2. Improving business portfolio management of Weihao Nanchen
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 Weihao Nanchen
Strengths Beijing Weihao Aluminum (Group) Co., Ltd. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Weihao Nanchen in Beijing Weihao Aluminum (Group) Co., Ltd. Harvard Business Review case study are -
Sustainable margins compare to other players in Strategy & Execution industry
– Beijing Weihao Aluminum (Group) Co., Ltd. firm has clearly differentiated products in the market place. This has enabled Weihao Nanchen to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Weihao Nanchen to invest into research and development (R&D) and innovation.
Strong track record of project management
– Weihao Nanchen 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
– Weihao Nanchen has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Weihao Nanchen 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.
High brand equity
– Weihao Nanchen has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Weihao Nanchen to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Weihao Nanchen 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 Weihao Nanchen is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Beijing Weihao Aluminum (Group) Co., Ltd. Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Weihao Nanchen is one of the leading recruiters in the industry. Managers in the Beijing Weihao Aluminum (Group) Co., Ltd. are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Weihao Nanchen is one of the most innovative firm in sector. Manager in Beijing Weihao Aluminum (Group) Co., Ltd. Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Weihao Nanchen 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 Beijing Weihao Aluminum (Group) Co., Ltd. HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Strategy & Execution field
– Weihao Nanchen 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 Weihao Nanchen in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Weihao Nanchen 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 Shengjun Liu 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.
Cross disciplinary teams
– Horizontal connected teams at the Weihao Nanchen 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.
Organizational Resilience of Weihao Nanchen
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Weihao Nanchen does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Beijing Weihao Aluminum (Group) Co., Ltd. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Beijing Weihao Aluminum (Group) Co., Ltd. are -
Interest costs
– Compare to the competition, Weihao Nanchen 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 bargaining power of channel partners
– Because of the regulatory requirements, Shengjun Liu suggests that, Weihao Nanchen is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Aligning sales with marketing
– It come across in the case study Beijing Weihao Aluminum (Group) Co., Ltd. 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 Beijing Weihao Aluminum (Group) Co., Ltd. can leverage the sales team experience to cultivate customer relationships as Weihao Nanchen is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Weihao Nanchen 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 Beijing Weihao Aluminum (Group) Co., Ltd., 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.
Need for greater diversity
– Weihao Nanchen 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.
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 Weihao Nanchen supply chain. Even after few cautionary changes mentioned in the HBR case study - Beijing Weihao Aluminum (Group) Co., Ltd., it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Weihao Nanchen vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Weihao Nanchen products
– To increase the profitability and margins on the products, Weihao Nanchen needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As Beijing Weihao Aluminum (Group) Co., Ltd. HBR case study mentions - Weihao Nanchen 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Beijing Weihao Aluminum (Group) Co., Ltd., it seems that the employees of Weihao Nanchen 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.
Skills based hiring
– The stress on hiring functional specialists at Weihao Nanchen 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.
Opportunities Beijing Weihao Aluminum (Group) Co., Ltd. | 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 Beijing Weihao Aluminum (Group) Co., Ltd. are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Weihao Nanchen 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 Weihao Nanchen 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Weihao Nanchen 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, Beijing Weihao Aluminum (Group) Co., Ltd., to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Weihao Nanchen can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Weihao Nanchen 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.
Learning at scale
– Online learning technologies has now opened space for Weihao Nanchen 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Weihao Nanchen can use these opportunities to build new business models that can help the communities that Weihao Nanchen operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Better consumer reach
– The expansion of the 5G network will help Weihao Nanchen to increase its market reach. Weihao Nanchen 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.
Loyalty marketing
– Weihao Nanchen 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.
Using analytics as competitive advantage
– Weihao Nanchen 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 Beijing Weihao Aluminum (Group) Co., Ltd. - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Weihao Nanchen to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Weihao Nanchen 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Weihao Nanchen is facing challenges because of the dominance of functional experts in the organization. Beijing Weihao Aluminum (Group) Co., Ltd. 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.
Building a culture of innovation
– managers at Weihao Nanchen 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.
Threats Beijing Weihao Aluminum (Group) Co., Ltd. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Beijing Weihao Aluminum (Group) Co., Ltd. are -
High dependence on third party suppliers
– Weihao Nanchen 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.
Consumer confidence and its impact on Weihao Nanchen 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.
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. Weihao Nanchen 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Weihao Nanchen with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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 Weihao Nanchen in the Strategy & Execution sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Weihao Nanchen 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.
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. Weihao Nanchen can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Weihao Nanchen 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. Weihao Nanchen 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 Weihao Nanchen is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Weihao Nanchen 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.
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 Weihao Nanchen business can come under increasing regulations regarding data privacy, data security, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Weighted SWOT Analysis of Beijing Weihao Aluminum (Group) Co., Ltd. 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 Beijing Weihao Aluminum (Group) Co., Ltd. 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 Beijing Weihao Aluminum (Group) Co., Ltd. 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 Beijing Weihao Aluminum (Group) Co., Ltd. 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 Beijing Weihao Aluminum (Group) Co., Ltd. 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 Weihao Nanchen needs to make to build a sustainable competitive advantage.
