Options for growth: The case of Haier (B) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Options for growth: The case of Haier (B)
The cases focus on how Zhang Ruimin, CEO of the Qingdao refrigerator factory, managed to turn around a nearly bankrupt factory which produced bad quality refrigerators into one of the world's largest white goods producers. With a series of rigorous steps, Ruimin succeeded in improving the quality of the refrigerators by putting the right incentives and processes into place. In addition, he expanded the product range into other areas of the white goods sector, and last but not least, moved aggressively into foreign markets with inroads into the largest and most competitive markets of America and Europe.
Swot Analysis of "Options for growth: The case of Haier (B)" written by Franziska Frank includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ruimin Refrigerators facing as an external strategic factors. Some of the topics covered in Options for growth: The case of Haier (B) case study are - Strategic Management Strategies, Innovation, Leadership, Mergers & acquisitions and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Options for growth: The case of Haier (B) casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, technology disruption, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%,
increasing commodity prices, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Options for growth: The case of Haier (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Options for growth: The case of Haier (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ruimin Refrigerators, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ruimin Refrigerators 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 Options for growth: The case of Haier (B) can be done for the following purposes –
1. Strategic planning using facts provided in Options for growth: The case of Haier (B) case study
2. Improving business portfolio management of Ruimin Refrigerators
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 Ruimin Refrigerators
Strengths Options for growth: The case of Haier (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ruimin Refrigerators in Options for growth: The case of Haier (B) Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Ruimin Refrigerators in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Ruimin Refrigerators has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ruimin Refrigerators 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.
Effective Research and Development (R&D)
– Ruimin Refrigerators 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 Options for growth: The case of Haier (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Ruimin Refrigerators digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ruimin Refrigerators 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.
Diverse revenue streams
– Ruimin Refrigerators is present in almost all the verticals within the industry. This has provided firm in Options for growth: The case of Haier (B) 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.
Innovation driven organization
– Ruimin Refrigerators is one of the most innovative firm in sector. Manager in Options for growth: The case of Haier (B) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Ruimin Refrigerators 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 Franziska Frank 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
– Ruimin Refrigerators 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 Options for growth: The case of Haier (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Ruimin Refrigerators has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Sustainable margins compare to other players in Strategy & Execution industry
– Options for growth: The case of Haier (B) firm has clearly differentiated products in the market place. This has enabled Ruimin Refrigerators to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Ruimin Refrigerators to invest into research and development (R&D) and innovation.
Training and development
– Ruimin Refrigerators has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Options for growth: The case of Haier (B) 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.
Strong track record of project management
– Ruimin Refrigerators is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Options for growth: The case of Haier (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Options for growth: The case of Haier (B) are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Options for growth: The case of Haier (B) 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 Ruimin Refrigerators has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Options for growth: The case of Haier (B) HBR case study mentions - Ruimin Refrigerators 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.
Lack of clear differentiation of Ruimin Refrigerators products
– To increase the profitability and margins on the products, Ruimin Refrigerators needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring
– The stress on hiring functional specialists at Ruimin Refrigerators 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.
Increasing silos among functional specialists
– The organizational structure of Ruimin Refrigerators is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Ruimin Refrigerators needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ruimin Refrigerators to focus more on services rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Ruimin Refrigerators 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.
No frontier risks strategy
– After analyzing the HBR case study Options for growth: The case of Haier (B), 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
– Ruimin Refrigerators 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 bargaining power of channel partners
– Because of the regulatory requirements, Franziska Frank suggests that, Ruimin Refrigerators 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 Options for growth: The case of Haier (B) 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 Options for growth: The case of Haier (B) can leverage the sales team experience to cultivate customer relationships as Ruimin Refrigerators is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Options for growth: The case of Haier (B), in the dynamic environment Ruimin Refrigerators has struggled to respond to the nimble upstart competition. Ruimin Refrigerators has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Options for growth: The case of Haier (B) | 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 Options for growth: The case of Haier (B) are -
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. Ruimin Refrigerators 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. Ruimin Refrigerators 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, Ruimin Refrigerators 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.
Learning at scale
– Online learning technologies has now opened space for Ruimin Refrigerators 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.
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. Ruimin Refrigerators can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Ruimin Refrigerators can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Ruimin Refrigerators 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 Options for growth: The case of Haier (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ruimin Refrigerators to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Ruimin Refrigerators 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ruimin Refrigerators in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ruimin Refrigerators can use these opportunities to build new business models that can help the communities that Ruimin Refrigerators operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Creating value in data economy
– The success of analytics program of Ruimin Refrigerators has opened avenues for new revenue streams for the organization in the industry. This can help Ruimin Refrigerators to build a more holistic ecosystem as suggested in the Options for growth: The case of Haier (B) case study. Ruimin Refrigerators can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Ruimin Refrigerators can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Options for growth: The case of Haier (B) 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.
Better consumer reach
– The expansion of the 5G network will help Ruimin Refrigerators to increase its market reach. Ruimin Refrigerators 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ruimin Refrigerators 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, Options for growth: The case of Haier (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Options for growth: The case of Haier (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Options for growth: The case of Haier (B) are -
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 Ruimin Refrigerators.
Increasing wage structure of Ruimin Refrigerators
– 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 Ruimin Refrigerators.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ruimin Refrigerators 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.
Shortening product life cycle
– it is one of the major threat that Ruimin Refrigerators is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Ruimin Refrigerators has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Ruimin Refrigerators 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.
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. Ruimin Refrigerators needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Regulatory challenges
– Ruimin Refrigerators 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.
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. Ruimin Refrigerators 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ruimin Refrigerators 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 Options for growth: The case of Haier (B) .
Stagnating economy with rate increase
– Ruimin Refrigerators 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Options for growth: The case of Haier (B), Ruimin Refrigerators 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 .
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. Ruimin Refrigerators 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 Options for growth: The case of Haier (B) 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 Options for growth: The case of Haier (B) 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 Options for growth: The case of Haier (B) 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 Options for growth: The case of Haier (B) 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 Options for growth: The case of Haier (B) 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 Ruimin Refrigerators needs to make to build a sustainable competitive advantage.
