Mass Customization in Haifei Bus Company SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Mass Customization in Haifei Bus Company
The Haifei Bus Company (Haifei), the leader in bus manufacturing in China, specialized in research and development, production, and sales of passenger buses. In 2010, Haifei's general manager was concerned with the business process re-engineering project the company had launched in 2009. The goal of this project was to transform Haifei's standardized production mode to one of mass customization. The new mode would deliver a competitive advantage for Haifei. However, the vice-general manager in charge of the project failed to create any improvement in the company's performance. Instead, he had managed to intensify the existing internal conflicts within the company. The resulting decrease in production output, production inefficiencies, shrinking market share, and deteriorating financial position meant the general manager had to find a solution to deal with his vice-general manager's performance. He was also responsible for assisting the various departments such as sales, procurement, logistics, and technology during the re-engineering process. How would the general manager direct Haifei, the former bus-industry leader, back to a position of prominence? Zhiduan Xu is affiliated with Xiamen University.
Authors :: Zhiduan Xu, Tianyang Wang, Xiaowen Hu, Yan Lu
Swot Analysis of "Mass Customization in Haifei Bus Company" written by Zhiduan Xu, Tianyang Wang, Xiaowen Hu, Yan Lu includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Haifei Bus facing as an external strategic factors. Some of the topics covered in Mass Customization in Haifei Bus Company case study are - Strategic Management Strategies, Manufacturing and Technology & Operations.
Some of the macro environment factors that can be used to understand the Mass Customization in Haifei Bus Company casestudy better are - – increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , there is backlash against globalization, talent flight as more people leaving formal jobs,
there is increasing trade war between United States & China, wage bills are increasing, etc
Introduction to SWOT Analysis of Mass Customization in Haifei Bus Company
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Mass Customization in Haifei Bus Company case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Haifei Bus, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Haifei Bus 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 Mass Customization in Haifei Bus Company can be done for the following purposes –
1. Strategic planning using facts provided in Mass Customization in Haifei Bus Company case study
2. Improving business portfolio management of Haifei Bus
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Haifei Bus
Strengths Mass Customization in Haifei Bus Company | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Haifei Bus in Mass Customization in Haifei Bus Company Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Mass Customization in Haifei Bus Company 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
- Haifei Bus 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 Haifei Bus is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Mass Customization in Haifei Bus Company Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Haifei Bus digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Haifei Bus 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.
Strong track record of project management
– Haifei Bus is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Haifei Bus in the sector have low bargaining power. Mass Customization in Haifei Bus Company has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Haifei Bus to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Haifei Bus 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.
High brand equity
– Haifei Bus has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Haifei Bus to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Technology & Operations industry
– Mass Customization in Haifei Bus Company firm has clearly differentiated products in the market place. This has enabled Haifei Bus to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Haifei Bus to invest into research and development (R&D) and innovation.
Analytics focus
– Haifei Bus 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 Zhiduan Xu, Tianyang Wang, Xiaowen Hu, Yan Lu 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.
Successful track record of launching new products
– Haifei Bus has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Haifei Bus 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.
Superior customer experience
– The customer experience strategy of Haifei Bus in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Technology & Operations field
– Haifei Bus 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 Haifei Bus in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Mass Customization in Haifei Bus Company | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Mass Customization in Haifei Bus Company are -
Increasing silos among functional specialists
– The organizational structure of Haifei Bus is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Haifei Bus needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Haifei Bus to focus more on services rather than just following the product oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Mass Customization in Haifei Bus Company, it seems that the employees of Haifei Bus 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.
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 Haifei Bus supply chain. Even after few cautionary changes mentioned in the HBR case study - Mass Customization in Haifei Bus Company, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Haifei Bus vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Haifei Bus, firm in the HBR case study Mass Customization in Haifei Bus Company needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Haifei Bus is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Mass Customization in Haifei Bus Company can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at Haifei Bus 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.
Aligning sales with marketing
– It come across in the case study Mass Customization in Haifei Bus Company 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 Mass Customization in Haifei Bus Company can leverage the sales team experience to cultivate customer relationships as Haifei Bus is planning to shift buying processes online.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Mass Customization in Haifei Bus Company 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 Haifei Bus has relatively successful track record of launching new products.
Lack of clear differentiation of Haifei Bus products
– To increase the profitability and margins on the products, Haifei Bus needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study Mass Customization in Haifei Bus Company 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 Haifei Bus 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study Mass Customization in Haifei Bus Company, it seems that company is thinking about the frontier risks that can impact Technology & Operations 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.
Opportunities Mass Customization in Haifei Bus Company | 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 Mass Customization in Haifei Bus Company are -
Creating value in data economy
– The success of analytics program of Haifei Bus has opened avenues for new revenue streams for the organization in the industry. This can help Haifei Bus to build a more holistic ecosystem as suggested in the Mass Customization in Haifei Bus Company case study. Haifei Bus can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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. Haifei Bus can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Haifei Bus to increase its market reach. Haifei Bus 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Haifei Bus 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. Haifei Bus 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.
Using analytics as competitive advantage
– Haifei Bus 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 Mass Customization in Haifei Bus Company - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Haifei Bus to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Haifei Bus can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Haifei Bus can use these opportunities to build new business models that can help the communities that Haifei Bus operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Haifei Bus is facing challenges because of the dominance of functional experts in the organization. Mass Customization in Haifei Bus Company 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.
Learning at scale
– Online learning technologies has now opened space for Haifei Bus 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Haifei Bus in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Technology & Operations segment, and it will provide faster access to the consumers.
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 Haifei Bus 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Haifei Bus can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Loyalty marketing
– Haifei Bus 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.
Threats Mass Customization in Haifei Bus Company External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Mass Customization in Haifei Bus Company are -
Shortening product life cycle
– it is one of the major threat that Haifei Bus is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
High dependence on third party suppliers
– Haifei Bus 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Haifei Bus in the Technology & Operations industry. The Technology & Operations 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.
Environmental challenges
– Haifei Bus 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. Haifei Bus can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Increasing wage structure of Haifei Bus
– 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 Haifei Bus.
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. Haifei Bus needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Haifei Bus has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Haifei Bus needs to keep up with the evolution of technology in the Technology & Operations 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.
Regulatory challenges
– Haifei Bus 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 Technology & Operations industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Mass Customization in Haifei Bus Company, Haifei Bus may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
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 Haifei Bus in the Technology & Operations sector and impact the bottomline of the organization.
Consumer confidence and its impact on Haifei Bus 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.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Haifei Bus can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Haifei Bus 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 Mass Customization in Haifei Bus Company 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 Mass Customization in Haifei Bus Company 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 Mass Customization in Haifei Bus Company 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 Mass Customization in Haifei Bus Company 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 Mass Customization in Haifei Bus Company 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 Haifei Bus needs to make to build a sustainable competitive advantage.