Wang Jianlin, founder and Chairman of the Dalian Wanda Group (Wanda) kept close tabs on one of his flagship projects going up on the shores of the Yellow Sea. There construction was underway on Wanda Studios Qingdao, the largest film and production facility in the world. The studio was a key initiative of Wang, a central player in the country's rapidly growing movie business. Wanda was already the largest theatrical exhibitor in the world, but the studio represented an enormous bet on a less familiar part of the value network of the film industry. Its vertically-integrated approach was also quite different from the Hollywood of today, which has evolved to a much more specialized division of labor.
Swot Analysis of "Wanda Studios Qingdao" written by Henry McGee, Willy Shih includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Wanda Qingdao facing as an external strategic factors. Some of the topics covered in Wanda Studios Qingdao case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Wanda Studios Qingdao casestudy better are - – increasing energy prices, central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, geopolitical disruptions, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion,
cloud computing is disrupting traditional business models, there is backlash against globalization, etc
Introduction to SWOT Analysis of Wanda Studios Qingdao
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Wanda Studios Qingdao case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Wanda Qingdao, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Wanda Qingdao 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 Wanda Studios Qingdao can be done for the following purposes –
1. Strategic planning using facts provided in Wanda Studios Qingdao case study
2. Improving business portfolio management of Wanda Qingdao
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 Wanda Qingdao
Strengths Wanda Studios Qingdao | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Wanda Qingdao in Wanda Studios Qingdao Harvard Business Review case study are -
High brand equity
– Wanda Qingdao has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Wanda Qingdao to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the Wanda Studios Qingdao 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
– Wanda Qingdao has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Wanda Qingdao 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.
Learning organization
- Wanda Qingdao 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 Wanda Qingdao is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Wanda Studios Qingdao Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Wanda Qingdao has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Wanda Studios Qingdao 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.
Low bargaining power of suppliers
– Suppliers of Wanda Qingdao in the sector have low bargaining power. Wanda Studios Qingdao has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Wanda Qingdao to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Wanda Qingdao
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Wanda Qingdao does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Wanda Qingdao 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 Henry McGee, Willy Shih 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Wanda Studios Qingdao firm has clearly differentiated products in the market place. This has enabled Wanda Qingdao to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Wanda Qingdao to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Wanda Qingdao 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.
Highly skilled collaborators
– Wanda Qingdao 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 Wanda Studios Qingdao HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Wanda Qingdao is present in almost all the verticals within the industry. This has provided firm in Wanda Studios Qingdao 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 Wanda Studios Qingdao | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Wanda Studios Qingdao are -
Skills based hiring
– The stress on hiring functional specialists at Wanda Qingdao 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Wanda Qingdao 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.
Interest costs
– Compare to the competition, Wanda Qingdao 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, Henry McGee, Willy Shih suggests that, Wanda Qingdao 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Wanda Studios Qingdao, is just above the industry average. Wanda Qingdao needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Increasing silos among functional specialists
– The organizational structure of Wanda Qingdao is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Wanda Qingdao needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Wanda Qingdao to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Wanda Studios Qingdao, in the dynamic environment Wanda Qingdao has struggled to respond to the nimble upstart competition. Wanda Qingdao has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Wanda Studios Qingdao, it seems that the employees of Wanda Qingdao 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.
Lack of clear differentiation of Wanda Qingdao products
– To increase the profitability and margins on the products, Wanda Qingdao needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study Wanda Studios Qingdao 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 Wanda Studios Qingdao can leverage the sales team experience to cultivate customer relationships as Wanda Qingdao is planning to shift buying processes online.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Wanda Studios Qingdao 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 Wanda Qingdao has relatively successful track record of launching new products.
Opportunities Wanda Studios Qingdao | 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 Wanda Studios Qingdao are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Wanda Qingdao 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, Wanda Studios Qingdao, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Wanda Qingdao has opened avenues for new revenue streams for the organization in the industry. This can help Wanda Qingdao to build a more holistic ecosystem as suggested in the Wanda Studios Qingdao case study. Wanda Qingdao can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Wanda Qingdao can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Wanda Qingdao can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Wanda Qingdao can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Low interest rates
– Even though inflation is raising its head in most developed economies, Wanda Qingdao 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.
Loyalty marketing
– Wanda Qingdao 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Wanda Qingdao is facing challenges because of the dominance of functional experts in the organization. Wanda Studios Qingdao 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.
Leveraging digital technologies
– Wanda Qingdao 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.
Using analytics as competitive advantage
– Wanda Qingdao 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 Wanda Studios Qingdao - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Wanda Qingdao to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Wanda Qingdao 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 Wanda Qingdao to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Wanda Qingdao 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.
Developing new processes and practices
– Wanda Qingdao 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.
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. Wanda Qingdao can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Wanda Studios Qingdao External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Wanda Studios Qingdao are -
High dependence on third party suppliers
– Wanda Qingdao 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.
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.
Increasing wage structure of Wanda Qingdao
– 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 Wanda Qingdao.
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. Wanda Qingdao 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 Wanda Qingdao with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Stagnating economy with rate increase
– Wanda Qingdao 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.
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 Wanda Qingdao in the Strategy & Execution sector and impact the bottomline of the organization.
Consumer confidence and its impact on Wanda Qingdao 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Wanda Studios Qingdao, Wanda Qingdao may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
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. Wanda Qingdao needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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. Wanda Qingdao can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Wanda Qingdao 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 Wanda Studios Qingdao .
Shortening product life cycle
– it is one of the major threat that Wanda Qingdao is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Wanda Studios Qingdao 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 Wanda Studios Qingdao 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 Wanda Studios Qingdao 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 Wanda Studios Qingdao 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 Wanda Studios Qingdao 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 Wanda Qingdao needs to make to build a sustainable competitive advantage.