Innovation and Development of China Machine Press in the New Century SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Innovation and Development of China Machine Press in the New Century
China Machine Press (CMP), founded in 1952, is a leading multi-field, multi-discipline and multimedia publishing group in China with large scale, comprehensive and specialized business that integrates paper media, audiovisual media and online media, and combines research, publishing, training, printing, issuing and distribution. Currently, CMP publishes more than 3,700 new books and imports over 400 foreign books each year. In 2010, its sales volume of books and periodicals reached RMB one billion. CMP's core competitive advantage lies in its innovative business strategy and management concepts, rigorous publishing standards and high product quality. In 2007, CMP was ranked among the Top 500 Most Valuable Chinese Brands by the World Brand Lab with an estimated brand value of RMB 787 million. From 2008 to 2010, CMP had been on the list for three years in a row, and with brand value rising beyond RMB 1.66 billion in 2010. CMP started as a state-owned institution, and as part of China's publishing industry that is highly regulated by the government, it was also subject to strict government supervision. Therefore, the focus of this case study is to understand how Wang Wenbin, President of CMP, devises new business strategies to gain a competitive advantage in a regulated industry and leads the company to carry forward marketization reform.
Swot Analysis of "Innovation and Development of China Machine Press in the New Century" written by F. Warren McFarlan, Ning Jia, Guo Jia includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cmp Rmb facing as an external strategic factors. Some of the topics covered in Innovation and Development of China Machine Press in the New Century case study are - Strategic Management Strategies, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Innovation and Development of China Machine Press in the New Century casestudy better are - – increasing government debt because of Covid-19 spendings, geopolitical disruptions, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, increasing energy prices, increasing transportation and logistics costs, increasing commodity prices,
there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Innovation and Development of China Machine Press in the New Century
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Innovation and Development of China Machine Press in the New Century case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cmp Rmb, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cmp Rmb 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 Innovation and Development of China Machine Press in the New Century can be done for the following purposes –
1. Strategic planning using facts provided in Innovation and Development of China Machine Press in the New Century case study
2. Improving business portfolio management of Cmp Rmb
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 Cmp Rmb
Strengths Innovation and Development of China Machine Press in the New Century | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cmp Rmb in Innovation and Development of China Machine Press in the New Century Harvard Business Review case study are -
Innovation driven organization
– Cmp Rmb is one of the most innovative firm in sector. Manager in Innovation and Development of China Machine Press in the New Century Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Cmp Rmb 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 F. Warren McFarlan, Ning Jia, Guo Jia 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.
Highly skilled collaborators
– Cmp Rmb 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 Innovation and Development of China Machine Press in the New Century HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Cmp Rmb has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Innovation and Development of China Machine Press in the New Century - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Cmp Rmb has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cmp Rmb to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Strategy & Execution field
– Cmp Rmb 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 Cmp Rmb in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Cmp Rmb is one of the leading recruiters in the industry. Managers in the Innovation and Development of China Machine Press in the New Century are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Cmp Rmb is present in almost all the verticals within the industry. This has provided firm in Innovation and Development of China Machine Press in the New Century 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.
Low bargaining power of suppliers
– Suppliers of Cmp Rmb in the sector have low bargaining power. Innovation and Development of China Machine Press in the New Century has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cmp Rmb to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Cmp Rmb has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Innovation and Development of China Machine Press in the New Century Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Operational resilience
– The operational resilience strategy in the Innovation and Development of China Machine Press in the New Century 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.
Learning organization
- Cmp Rmb 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 Cmp Rmb is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Innovation and Development of China Machine Press in the New Century Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Innovation and Development of China Machine Press in the New Century | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Innovation and Development of China Machine Press in the New Century are -
High bargaining power of channel partners
– Because of the regulatory requirements, F. Warren McFarlan, Ning Jia, Guo Jia suggests that, Cmp Rmb 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.
Products dominated business model
– Even though Cmp Rmb 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 - Innovation and Development of China Machine Press in the New Century should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study Innovation and Development of China Machine Press in the New Century 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 Innovation and Development of China Machine Press in the New Century can leverage the sales team experience to cultivate customer relationships as Cmp Rmb is planning to shift buying processes online.
High cash cycle compare to competitors
Cmp Rmb 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Innovation and Development of China Machine Press in the New Century 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 Cmp Rmb has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Cmp Rmb is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Innovation and Development of China Machine Press in the New Century can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Cmp Rmb products
– To increase the profitability and margins on the products, Cmp Rmb needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Cmp Rmb supply chain. Even after few cautionary changes mentioned in the HBR case study - Innovation and Development of China Machine Press in the New Century, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cmp Rmb vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study Innovation and Development of China Machine Press in the New Century 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 Cmp Rmb 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Cmp Rmb is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Cmp Rmb needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cmp Rmb to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Cmp Rmb 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.
Opportunities Innovation and Development of China Machine Press in the New Century | 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 Innovation and Development of China Machine Press in the New Century are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cmp Rmb 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, Innovation and Development of China Machine Press in the New Century, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Cmp Rmb 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 Innovation and Development of China Machine Press in the New Century - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cmp Rmb to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cmp Rmb can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Cmp Rmb 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cmp Rmb can use these opportunities to build new business models that can help the communities that Cmp Rmb 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 Cmp Rmb to increase its market reach. Cmp Rmb 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Cmp Rmb 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Cmp Rmb is facing challenges because of the dominance of functional experts in the organization. Innovation and Development of China Machine Press in the New Century 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.
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. Cmp Rmb can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Cmp Rmb 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.
Creating value in data economy
– The success of analytics program of Cmp Rmb has opened avenues for new revenue streams for the organization in the industry. This can help Cmp Rmb to build a more holistic ecosystem as suggested in the Innovation and Development of China Machine Press in the New Century case study. Cmp Rmb can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Cmp Rmb 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.
Developing new processes and practices
– Cmp Rmb 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.
Threats Innovation and Development of China Machine Press in the New Century External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Innovation and Development of China Machine Press in the New Century are -
Increasing wage structure of Cmp Rmb
– 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 Cmp Rmb.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cmp Rmb 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 Innovation and Development of China Machine Press in the New Century .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Innovation and Development of China Machine Press in the New Century, Cmp Rmb 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. Cmp Rmb needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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 Cmp Rmb.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cmp Rmb with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
High dependence on third party suppliers
– Cmp Rmb 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.
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 Cmp Rmb in the Strategy & Execution sector and impact the bottomline of the organization.
Environmental challenges
– Cmp Rmb 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. Cmp Rmb can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Regulatory challenges
– Cmp Rmb 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.
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. Cmp Rmb can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Innovation and Development of China Machine Press in the New Century 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 Innovation and Development of China Machine Press in the New Century 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 Innovation and Development of China Machine Press in the New Century 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 Innovation and Development of China Machine Press in the New Century 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 Innovation and Development of China Machine Press in the New Century 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 Cmp Rmb needs to make to build a sustainable competitive advantage.
