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 - – there is backlash against globalization, supply chains are disrupted by pandemic , increasing household debt because of falling income levels, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%,
customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, 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 -
Operational resilience
– The operational resilience strategy in the Beijing Weihao Aluminum (Group) Co., Ltd. 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.
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.
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.
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.
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.
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.
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.
Training and development
– Weihao Nanchen has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Beijing Weihao Aluminum (Group) Co., Ltd. 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.
Diverse revenue streams
– Weihao Nanchen is present in almost all the verticals within the industry. This has provided firm in Beijing Weihao Aluminum (Group) Co., Ltd. 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.
Superior customer experience
– The customer experience strategy of Weihao Nanchen in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Weihao Nanchen digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Weihao Nanchen 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.
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 -
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.
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.
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.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study Beijing Weihao Aluminum (Group) Co., Ltd. has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Weihao Nanchen 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Beijing Weihao Aluminum (Group) Co., Ltd. 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 Weihao Nanchen has relatively successful track record of launching new products.
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.
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.
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.
Increasing silos among functional specialists
– The organizational structure of Weihao Nanchen is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Weihao Nanchen needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Weihao Nanchen to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Weihao Nanchen 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.
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.
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.
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 Weihao Nanchen in the consumer business. Now Weihao Nanchen can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Weihao Nanchen can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Beijing Weihao Aluminum (Group) Co., Ltd. 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.
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.
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.
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.
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.
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.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Weihao Nanchen 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.
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 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. Weihao Nanchen needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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.
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 Weihao Nanchen.
Technology acceleration in Forth Industrial Revolution
– Weihao Nanchen has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Weihao Nanchen 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Weihao Nanchen 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 Beijing Weihao Aluminum (Group) Co., Ltd. .
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.
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.
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.
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.
Increasing wage structure of Weihao Nanchen
– 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 Weihao Nanchen.
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.
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.
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.