XiamenAir in 2014: The Dreamliner Decision SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of XiamenAir in 2014: The Dreamliner Decision
In spring 2014, XiamenAir is the most profitable of the five largest airlines in China. With bases in Xiamen, Fuzhou and Hangzhou, its flight network covers major cities in China with international service to Macao, Taiwan, Hong Kong and other Southeast Asian countries. The company prides itself on its differentiation strategy: customer service, building a brand and reputation that its customers trust and providing a service for which its customers are willing to pay a premium price even when there are low cost/low price carriers available. Its management is contemplating buying six new Boeing Dreamliner wide-body aircraft that will allow the company to expand its market to Europe, Australia and western North America. Will this purchase enable Fujian Province to more quickly become established as the regional hub for Southeast Asia, Northeast Asia and cross-strait transportation? Will it help speed China's push to internationalize its passenger airlines? In the face of growing competition from high-speed rail networks and both Chinese and international airlines, the management must decide how best to grow the company and maintain its profits.
Swot Analysis of "XiamenAir in 2014: The Dreamliner Decision" written by W. Glenn Rowe, Xiaomei Guo includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Xiamenair Dreamliner facing as an external strategic factors. Some of the topics covered in XiamenAir in 2014: The Dreamliner Decision case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the XiamenAir in 2014: The Dreamliner Decision casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, there is backlash against globalization,
increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of XiamenAir in 2014: The Dreamliner Decision
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in XiamenAir in 2014: The Dreamliner Decision case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Xiamenair Dreamliner, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Xiamenair Dreamliner 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 XiamenAir in 2014: The Dreamliner Decision can be done for the following purposes –
1. Strategic planning using facts provided in XiamenAir in 2014: The Dreamliner Decision case study
2. Improving business portfolio management of Xiamenair Dreamliner
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 Xiamenair Dreamliner
Strengths XiamenAir in 2014: The Dreamliner Decision | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Xiamenair Dreamliner in XiamenAir in 2014: The Dreamliner Decision Harvard Business Review case study are -
Strong track record of project management
– Xiamenair Dreamliner is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Xiamenair Dreamliner in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Xiamenair Dreamliner is one of the most innovative firm in sector. Manager in XiamenAir in 2014: The Dreamliner Decision Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Xiamenair Dreamliner has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Xiamenair Dreamliner to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Strategy & Execution industry
– XiamenAir in 2014: The Dreamliner Decision firm has clearly differentiated products in the market place. This has enabled Xiamenair Dreamliner to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Xiamenair Dreamliner to invest into research and development (R&D) and innovation.
Organizational Resilience of Xiamenair Dreamliner
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Xiamenair Dreamliner does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Xiamenair Dreamliner in the sector have low bargaining power. XiamenAir in 2014: The Dreamliner Decision has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Xiamenair Dreamliner to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Strategy & Execution field
– Xiamenair Dreamliner 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 Xiamenair Dreamliner in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Xiamenair Dreamliner has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in XiamenAir in 2014: The Dreamliner Decision 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.
Effective Research and Development (R&D)
– Xiamenair Dreamliner 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 XiamenAir in 2014: The Dreamliner Decision - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Xiamenair Dreamliner 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 Xiamenair Dreamliner is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in XiamenAir in 2014: The Dreamliner Decision Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Xiamenair Dreamliner 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 XiamenAir in 2014: The Dreamliner Decision HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses XiamenAir in 2014: The Dreamliner Decision | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of XiamenAir in 2014: The Dreamliner Decision are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study XiamenAir in 2014: The Dreamliner Decision, is just above the industry average. Xiamenair Dreamliner 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.
Interest costs
– Compare to the competition, Xiamenair Dreamliner 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.
Need for greater diversity
– Xiamenair Dreamliner 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 operating costs
– Compare to the competitors, firm in the HBR case study XiamenAir in 2014: The Dreamliner Decision 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 Xiamenair Dreamliner 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Xiamenair Dreamliner 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.
High cash cycle compare to competitors
Xiamenair Dreamliner 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study XiamenAir in 2014: The Dreamliner Decision, in the dynamic environment Xiamenair Dreamliner has struggled to respond to the nimble upstart competition. Xiamenair Dreamliner has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Xiamenair Dreamliner is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study XiamenAir in 2014: The Dreamliner Decision can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High bargaining power of channel partners
– Because of the regulatory requirements, W. Glenn Rowe, Xiaomei Guo suggests that, Xiamenair Dreamliner 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.
Capital Spending Reduction
– Even during the low interest decade, Xiamenair Dreamliner 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.
Increasing silos among functional specialists
– The organizational structure of Xiamenair Dreamliner is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Xiamenair Dreamliner needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Xiamenair Dreamliner to focus more on services rather than just following the product oriented approach.
Opportunities XiamenAir in 2014: The Dreamliner Decision | 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 XiamenAir in 2014: The Dreamliner Decision are -
Developing new processes and practices
– Xiamenair Dreamliner 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.
Buying journey improvements
– Xiamenair Dreamliner can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. XiamenAir in 2014: The Dreamliner Decision 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Xiamenair Dreamliner 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, XiamenAir in 2014: The Dreamliner Decision, 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
– Xiamenair Dreamliner 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 XiamenAir in 2014: The Dreamliner Decision - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Xiamenair Dreamliner to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Xiamenair Dreamliner 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Xiamenair Dreamliner can use these opportunities to build new business models that can help the communities that Xiamenair Dreamliner operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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. Xiamenair Dreamliner can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Xiamenair Dreamliner has opened avenues for new revenue streams for the organization in the industry. This can help Xiamenair Dreamliner to build a more holistic ecosystem as suggested in the XiamenAir in 2014: The Dreamliner Decision case study. Xiamenair Dreamliner can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Xiamenair Dreamliner to increase its market reach. Xiamenair Dreamliner 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.
Loyalty marketing
– Xiamenair Dreamliner 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.
Building a culture of innovation
– managers at Xiamenair Dreamliner 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.
Leveraging digital technologies
– Xiamenair Dreamliner 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Xiamenair Dreamliner 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.
Threats XiamenAir in 2014: The Dreamliner Decision External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study XiamenAir in 2014: The Dreamliner Decision are -
Environmental challenges
– Xiamenair Dreamliner 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. Xiamenair Dreamliner can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Shortening product life cycle
– it is one of the major threat that Xiamenair Dreamliner is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Xiamenair Dreamliner
– 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 Xiamenair Dreamliner.
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 Xiamenair Dreamliner business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Xiamenair Dreamliner 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 XiamenAir in 2014: The Dreamliner Decision .
Technology acceleration in Forth Industrial Revolution
– Xiamenair Dreamliner has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Xiamenair Dreamliner 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.
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 Xiamenair Dreamliner in the Strategy & Execution sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Xiamenair Dreamliner 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.
Consumer confidence and its impact on Xiamenair Dreamliner 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Xiamenair Dreamliner with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study XiamenAir in 2014: The Dreamliner Decision, Xiamenair Dreamliner 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 .
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.
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. Xiamenair Dreamliner 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 XiamenAir in 2014: The Dreamliner Decision 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 XiamenAir in 2014: The Dreamliner Decision 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 XiamenAir in 2014: The Dreamliner Decision 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 XiamenAir in 2014: The Dreamliner Decision 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 XiamenAir in 2014: The Dreamliner Decision 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 Xiamenair Dreamliner needs to make to build a sustainable competitive advantage.