Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy
Henleys, one of the largest electronics companies in the world, started to import domestic appliances and personal care (DAP) products into the Chinese market in 1990. Soon after, Henleys established a DAP manufacturing facility in China and from a pool of three candidates, selected a state-run distributor, Dongxi Co., as the sole distributor in Shanghai. Over several years, Dongxi developed an extensive retailer network for the new DAP market in Shanghai, and the average annual growth rate was 200% between 1990 and 1997. The cooperation between Henleys and Dongxi was productive until 1999, when Dongxi's efficiency slid into decline and many salespeople departed from the company, including the deputy general manager, who had been in charge of DAP distribution. Henleys faced a series of decisions regarding the possible restructuring of the distribution channels in a business environment quite different from that of 1990, when Henleys had made its distributor selection decisions.
Swot Analysis of "Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy" written by Don Lee includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Henleys Dap facing as an external strategic factors. Some of the topics covered in Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy case study are - Strategic Management Strategies, International business, Marketing, Reorganization and Technology & Operations.
Some of the macro environment factors that can be used to understand the Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy casestudy better are - – there is backlash against globalization, increasing government debt because of Covid-19 spendings, increasing energy prices, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, increasing household debt because of falling income levels, geopolitical disruptions,
supply chains are disrupted by pandemic , increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Henleys Dap, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Henleys Dap 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 Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy can be done for the following purposes –
1. Strategic planning using facts provided in Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy case study
2. Improving business portfolio management of Henleys Dap
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 Henleys Dap
Strengths Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Henleys Dap in Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy Harvard Business Review case study are -
High switching costs
– The high switching costs that Henleys Dap 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.
Sustainable margins compare to other players in Technology & Operations industry
– Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy firm has clearly differentiated products in the market place. This has enabled Henleys Dap to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Henleys Dap to invest into research and development (R&D) and innovation.
Learning organization
- Henleys Dap 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 Henleys Dap is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Henleys Dap in the sector have low bargaining power. Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Henleys Dap to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Henleys Dap has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Henleys Dap 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.
Cross disciplinary teams
– Horizontal connected teams at the Henleys Dap 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.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Henleys Dap digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Henleys Dap 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.
Training and development
– Henleys Dap has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy 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.
Ability to lead change in Technology & Operations field
– Henleys Dap 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 Henleys Dap in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Henleys Dap is one of the most innovative firm in sector. Manager in Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Henleys Dap 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 Don Lee 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.
Highly skilled collaborators
– Henleys Dap 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 Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy, in the dynamic environment Henleys Dap has struggled to respond to the nimble upstart competition. Henleys Dap has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy HBR case study mentions - Henleys Dap 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.
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 Henleys Dap supply chain. Even after few cautionary changes mentioned in the HBR case study - Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Henleys Dap vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Henleys Dap products
– To increase the profitability and margins on the products, Henleys Dap needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Henleys Dap 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 cash cycle compare to competitors
Henleys Dap 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.
Aligning sales with marketing
– It come across in the case study Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy 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 Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy can leverage the sales team experience to cultivate customer relationships as Henleys Dap is planning to shift buying processes online.
Products dominated business model
– Even though Henleys Dap 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 - Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy 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 Henleys Dap has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Henleys Dap 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy, is just above the industry average. Henleys Dap 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 Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy | 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 Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy are -
Using analytics as competitive advantage
– Henleys Dap 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 Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Henleys Dap to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Henleys Dap has opened avenues for new revenue streams for the organization in the industry. This can help Henleys Dap to build a more holistic ecosystem as suggested in the Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy case study. Henleys Dap can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Henleys Dap 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.
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 Henleys Dap in the consumer business. Now Henleys Dap can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Henleys Dap 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 Technology & Operations segment.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Henleys Dap 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, Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Henleys Dap can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy 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.
Learning at scale
– Online learning technologies has now opened space for Henleys Dap 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Henleys Dap can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Henleys Dap can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Henleys Dap can use these opportunities to build new business models that can help the communities that Henleys Dap operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Henleys Dap 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.
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. Henleys Dap can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy are -
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 Henleys Dap business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Henleys Dap 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 Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy .
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 Henleys Dap in the Technology & Operations sector and impact the bottomline of the organization.
Environmental challenges
– Henleys Dap 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. Henleys Dap can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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. Henleys Dap can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Henleys Dap has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Henleys Dap 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.
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 Henleys Dap.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy, Henleys Dap 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 .
Stagnating economy with rate increase
– Henleys Dap 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 Henleys Dap 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.
High dependence on third party suppliers
– Henleys Dap 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.
Shortening product life cycle
– it is one of the major threat that Henleys Dap is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy 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 Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy 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 Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy 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 Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy 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 Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy 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 Henleys Dap needs to make to build a sustainable competitive advantage.
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