Case Study Description of Ningbo FOTILE Kitchen Ware Co., Ltd.
Since 2008, FOTILE has actively introduced philosophies of the traditional Chinese culture - such as benevolence, justice, courtesy, wisdom and faith - into its management, which it believes to compensate for deficiencies in western management concepts and creates a new Chinese enterprise management model. FOTILE's attempts are controversial and evoke intense discussions and reflections. The core question for class discussion is whether its philosophy is sustainable and applicable to modern enterprises generally in China? How can one integrate the western management philosophy with traditional Oriental culture? Is it really possible? This case can be used in MBA, EDP, EMBA Organizational Behavior and Corporate Culture courses. It supports a 60-90-minute class discussion. The case describes how FOTILE developed its Confucian culture-based management model in a world of market competition. It first introduces the company's background, including its startup and development processes. It next describes the transformation of FOTILE's management model from western philosophy to one based on traditional Oriental concepts. It then shows how Confucianism is applied in FOTILE's management. In particular, it describes the applications of Confucianism in FOTILE's HR management and performance evaluation.
Authors :: F. Warren McFarlan, Zheng Xiaoming, Yuren Fang, Hong Zhang
Swot Analysis of "Ningbo FOTILE Kitchen Ware Co., Ltd." written by F. Warren McFarlan, Zheng Xiaoming, Yuren Fang, Hong Zhang includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Fotile's Fotile facing as an external strategic factors. Some of the topics covered in Ningbo FOTILE Kitchen Ware Co., Ltd. case study are - Strategic Management Strategies, Leadership, Strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Ningbo FOTILE Kitchen Ware Co., Ltd. casestudy better are - – increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, increasing commodity prices, geopolitical disruptions,
central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Ningbo FOTILE Kitchen Ware Co., Ltd.
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Ningbo FOTILE Kitchen Ware Co., Ltd. case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fotile's Fotile, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fotile's Fotile 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 Ningbo FOTILE Kitchen Ware Co., Ltd. can be done for the following purposes –
1. Strategic planning using facts provided in Ningbo FOTILE Kitchen Ware Co., Ltd. case study
2. Improving business portfolio management of Fotile's Fotile
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 Fotile's Fotile
Strengths Ningbo FOTILE Kitchen Ware Co., Ltd. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fotile's Fotile in Ningbo FOTILE Kitchen Ware Co., Ltd. Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Fotile's Fotile in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Fotile's Fotile is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to lead change in Strategy & Execution field
– Fotile's Fotile 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 Fotile's Fotile in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Fotile's Fotile
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Fotile's Fotile does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Fotile's Fotile 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 Ningbo FOTILE Kitchen Ware Co., Ltd. HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Fotile's Fotile has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Fotile's Fotile to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Fotile's Fotile is one of the most innovative firm in sector. Manager in Ningbo FOTILE Kitchen Ware Co., Ltd. Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Fotile's Fotile digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Fotile's Fotile 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.
Analytics focus
– Fotile's Fotile 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, Zheng Xiaoming, Yuren Fang, Hong Zhang 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.
Operational resilience
– The operational resilience strategy in the Ningbo FOTILE Kitchen Ware 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.
Diverse revenue streams
– Fotile's Fotile is present in almost all the verticals within the industry. This has provided firm in Ningbo FOTILE Kitchen Ware 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.
Low bargaining power of suppliers
– Suppliers of Fotile's Fotile in the sector have low bargaining power. Ningbo FOTILE Kitchen Ware Co., Ltd. has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Fotile's Fotile to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Ningbo FOTILE Kitchen Ware Co., Ltd. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ningbo FOTILE Kitchen Ware Co., Ltd. are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Ningbo FOTILE Kitchen Ware Co., Ltd., it seems that the employees of Fotile's Fotile 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.
Increasing silos among functional specialists
– The organizational structure of Fotile's Fotile is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Fotile's Fotile needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Fotile's Fotile to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Fotile's Fotile has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Fotile's Fotile even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Capital Spending Reduction
– Even during the low interest decade, Fotile's Fotile 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.
Slow to strategic competitive environment developments
– As Ningbo FOTILE Kitchen Ware Co., Ltd. HBR case study mentions - Fotile's Fotile 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.
High bargaining power of channel partners
– Because of the regulatory requirements, F. Warren McFarlan, Zheng Xiaoming, Yuren Fang, Hong Zhang suggests that, Fotile's Fotile 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.
Low market penetration in new markets
– Outside its home market of Fotile's Fotile, firm in the HBR case study Ningbo FOTILE Kitchen Ware Co., Ltd. needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Fotile's Fotile 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 - Ningbo FOTILE Kitchen Ware Co., Ltd. should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Fotile's Fotile 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Ningbo FOTILE Kitchen Ware Co., Ltd., is just above the industry average. Fotile's Fotile 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Fotile's Fotile 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.
Opportunities Ningbo FOTILE Kitchen Ware 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 Ningbo FOTILE Kitchen Ware Co., Ltd. are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Fotile's Fotile can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Fotile's Fotile 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.
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 Fotile's Fotile in the consumer business. Now Fotile's Fotile can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Fotile's Fotile 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 Fotile's Fotile to hire the very best people irrespective of their geographical location.
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 Fotile's Fotile 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
– Fotile's Fotile 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 Ningbo FOTILE Kitchen Ware Co., Ltd. - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Fotile's Fotile to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Fotile's Fotile 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.
Manufacturing automation
– Fotile's Fotile 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.
Creating value in data economy
– The success of analytics program of Fotile's Fotile has opened avenues for new revenue streams for the organization in the industry. This can help Fotile's Fotile to build a more holistic ecosystem as suggested in the Ningbo FOTILE Kitchen Ware Co., Ltd. case study. Fotile's Fotile can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Fotile's Fotile 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Fotile's Fotile is facing challenges because of the dominance of functional experts in the organization. Ningbo FOTILE Kitchen Ware 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Fotile's Fotile 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, Ningbo FOTILE Kitchen Ware 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.
Buying journey improvements
– Fotile's Fotile can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Ningbo FOTILE Kitchen Ware 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.
Threats Ningbo FOTILE Kitchen Ware 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 Ningbo FOTILE Kitchen Ware Co., Ltd. are -
Stagnating economy with rate increase
– Fotile's Fotile 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.
Consumer confidence and its impact on Fotile's Fotile 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.
Technology acceleration in Forth Industrial Revolution
– Fotile's Fotile has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Fotile's Fotile 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 dependence on third party suppliers
– Fotile's Fotile 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.
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 Fotile's Fotile business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Fotile's Fotile 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.
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 Fotile's Fotile.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Fotile's Fotile 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.
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. Fotile's Fotile 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.
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 Fotile's Fotile in the Strategy & Execution sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Fotile's Fotile 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 Ningbo FOTILE Kitchen Ware Co., Ltd. .
Environmental challenges
– Fotile's Fotile 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. Fotile's Fotile can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Fotile's Fotile with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Ningbo FOTILE Kitchen Ware 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 Ningbo FOTILE Kitchen Ware 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 Ningbo FOTILE Kitchen Ware 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 Ningbo FOTILE Kitchen Ware 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 Ningbo FOTILE Kitchen Ware 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 Fotile's Fotile needs to make to build a sustainable competitive advantage.
