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 - – cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, wage bills are increasing,
geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, 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 -
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.
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.
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Overseas Bright are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
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.
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.
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.
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.
Ability to lead change in Finance & Accounting field
– Overseas Bright 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 Overseas Bright in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Overseas Bright has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve 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.
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.
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 -
High cash cycle compare to competitors
Overseas Bright 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.
High operating costs
– Compare to the competitors, firm in the HBR case study China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve 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 Overseas Bright 's lucrative customers.
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.
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.
Slow to strategic competitive environment developments
– As China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve HBR case study mentions - Overseas Bright 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.
Products dominated business model
– Even though Overseas Bright 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 - China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve should strive to include more intangible value offerings along with its core products and services.
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.
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.
Skills based hiring
– The stress on hiring functional specialists at Overseas Bright 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.
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.
Interest costs
– Compare to the competition, Overseas Bright 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.
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 -
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. Overseas Bright can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Overseas Bright 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 Overseas Bright to hire the very best people irrespective of their geographical location.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Overseas Bright can use these opportunities to build new business models that can help the communities that Overseas Bright operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
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.
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.
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.
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.
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.
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.
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 Overseas Bright 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.
Creating value in data economy
– The success of analytics program of Overseas Bright has opened avenues for new revenue streams for the organization in the industry. This can help Overseas Bright to build a more holistic ecosystem as suggested in the China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve case study. Overseas Bright can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 -
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study China's Bright Food Overseas M&A Strategy 2010-2012 - A Steep Learning Curve, Overseas Bright may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
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.
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.
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 Overseas Bright in the Finance & Accounting sector and impact the bottomline of the organization.
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.
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 acceleration in Forth Industrial Revolution
– Overseas Bright has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Overseas Bright needs to keep up with the evolution of technology in the Finance & Accounting sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Overseas Bright needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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.
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.
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 .
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.
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.