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 - – cloud computing is disrupting traditional business models, technology disruption, challanges to central banks by blockchain based private currencies, there is backlash against globalization, central banks are concerned over increasing inflation, wage bills are increasing, increasing energy prices,
increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, 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 -
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.
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.
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.
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.
Ability to recruit top talent
– Haifei Bus is one of the leading recruiters in the industry. Managers in the Mass Customization in Haifei Bus Company are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Haifei Bus 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.
Effective Research and Development (R&D)
– Haifei Bus 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 Mass Customization in Haifei Bus Company - 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 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.
Highly skilled collaborators
– Haifei Bus 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 Mass Customization in Haifei Bus Company HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
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 -
Capital Spending Reduction
– Even during the low interest decade, Haifei Bus has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow decision making process
– As mentioned earlier in the report, Haifei Bus 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. Haifei Bus 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 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.
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.
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.
Products dominated business model
– Even though Haifei Bus 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 - Mass Customization in Haifei Bus Company should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Haifei Bus 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Mass Customization in Haifei Bus Company, is just above the industry average. Haifei Bus 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Mass Customization in Haifei Bus Company, in the dynamic environment Haifei Bus has struggled to respond to the nimble upstart competition. Haifei Bus has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Haifei Bus 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.
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.
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 -
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.
Buying journey improvements
– Haifei Bus can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Mass Customization in Haifei Bus Company 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
– 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.
Manufacturing automation
– Haifei Bus can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations 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.
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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Haifei Bus can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Haifei Bus can develop new processes and procedures in Technology & Operations 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.
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.
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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Haifei Bus 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, Mass Customization in Haifei Bus Company, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 -
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.
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.
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.
Stagnating economy with rate increase
– Haifei Bus 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.
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.
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.
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 .
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.
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 Haifei Bus business can come under increasing regulations regarding data privacy, data security, etc.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Haifei Bus 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 Mass Customization in Haifei Bus Company .
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 Haifei Bus.
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.
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.
