Case Study Description of China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve
This case examines the contexts and outcomes of Bright Food Group's eight overseas merger and acquisition (M&A) initiatives in the food industry in Australia, Europe, New Zealand and the United States from 2010 to 2012. The case provides an opportunity to examine a Chinese state-owned enterprise's overseas M&A strategy, including reasons for M&A targets and challenges in its first steps in global M&A deal making.
Swot Analysis of "China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve" written by Gillian Yeo, Beng Geok Wee includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Overseas Bright facing as an external strategic factors. Some of the topics covered in China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve case study are - Strategic Management Strategies, Mergers & acquisitions and Finance & Accounting.
Some of the macro environment factors that can be used to understand the China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve casestudy better are - – central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, wage bills are increasing, increasing transportation and logistics costs, there is backlash against globalization,
increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Overseas Bright, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Overseas Bright 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 China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve can be done for the following purposes –
1. Strategic planning using facts provided in China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve case study
2. Improving business portfolio management of Overseas Bright
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Overseas Bright
Strengths China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Overseas Bright in China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve Harvard Business Review case study are -
Innovation driven organization
– Overseas Bright is one of the most innovative firm in sector. Manager in China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Finance & Accounting industry
– China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve firm has clearly differentiated products in the market place. This has enabled Overseas Bright to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Overseas Bright to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Overseas Bright 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
– Overseas Bright is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Overseas Bright 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 China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Overseas Bright 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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Overseas Bright digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Overseas Bright 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.
Low bargaining power of suppliers
– Suppliers of Overseas Bright in the sector have low bargaining power. China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Overseas Bright to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Overseas Bright is one of the leading recruiters in the industry. Managers in the China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve 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
- Overseas Bright 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 Overseas Bright is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Overseas Bright 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 Gillian Yeo, Beng Geok Wee 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.
Weaknesses China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve are -
Lack of clear differentiation of Overseas Bright products
– To increase the profitability and margins on the products, Overseas Bright needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Gillian Yeo, Beng Geok Wee suggests that, Overseas Bright 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.
Slow decision making process
– As mentioned earlier in the report, Overseas Bright 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. Overseas Bright 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.
Increasing silos among functional specialists
– The organizational structure of Overseas Bright is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Overseas Bright needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Overseas Bright to focus more on services rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Overseas Bright is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve, it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Overseas Bright 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.
Capital Spending Reduction
– Even during the low interest decade, Overseas Bright 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve 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 Overseas Bright has relatively successful track record of launching new products.
Need for greater diversity
– Overseas Bright 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 China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve, is just above the industry average. Overseas Bright 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.
Opportunities China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve | 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 China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Overseas Bright is facing challenges because of the dominance of functional experts in the organization. China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve 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.
Buying journey improvements
– Overseas Bright can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve 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.
Using analytics as competitive advantage
– Overseas Bright 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 China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Overseas Bright to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Overseas Bright 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.
Manufacturing automation
– Overseas Bright can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
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 Overseas Bright in the consumer business. Now Overseas Bright can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Overseas Bright 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 Finance & Accounting segment.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Overseas Bright 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, China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Overseas Bright can develop new processes and procedures in Finance & Accounting 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Overseas Bright 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Overseas Bright in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Learning at scale
– Online learning technologies has now opened space for Overseas Bright 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Overseas Bright 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. Overseas Bright 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.
Threats China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve are -
High dependence on third party suppliers
– Overseas Bright 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Overseas Bright with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Overseas Bright 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 Finance & Accounting industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Overseas Bright 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 China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve .
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Overseas Bright can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Overseas Bright 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 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.
Shortening product life cycle
– it is one of the major threat that Overseas Bright is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Overseas Bright 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.
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 Overseas Bright.
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. Overseas Bright needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Overseas Bright in the Finance & Accounting industry. The Finance & Accounting 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.
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 Overseas Bright business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve 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 China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve 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 China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve 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 China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve 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 China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve 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 Overseas Bright needs to make to build a sustainable competitive advantage.