Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

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.

Authors :: Don Lee

Topics :: Technology & Operations

Tags :: International business, Marketing, Reorganization, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

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 - – digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, wage bills are increasing, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, etc

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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.

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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

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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 -

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.

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.

Ability to recruit top talent

– Henleys Dap is one of the leading recruiters in the industry. Managers in the Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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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 decision making process

– As mentioned earlier in the report, Henleys Dap 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. Henleys Dap 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.

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.

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.

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.

No frontier risks strategy

– After analyzing the HBR case study Henleys' Distribution Channels for Domestic Appliances in China's Transitioning Economy, it seems that company is thinking about the frontier risks that can impact Technology & Operations strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.

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 bargaining power of channel partners

– Because of the regulatory requirements, Don Lee suggests that, Henleys Dap 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.

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.

Need for greater diversity

– Henleys Dap 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.

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.

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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 -

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.

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.

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.

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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Henleys Dap 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 Henleys Dap to hire the very best people irrespective of their geographical location.

Better consumer reach

– The expansion of the 5G network will help Henleys Dap to increase its market reach. Henleys Dap 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.

Leveraging digital technologies

– Henleys Dap 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.

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.

Developing new processes and practices

– Henleys Dap 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.

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.

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.

Loyalty marketing

– Henleys Dap has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.

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.

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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 -

Instability in the European markets

– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Henleys Dap will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Henleys Dap in the Technology & Operations industry. The Technology & Operations industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.

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.

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 .

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.

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 .

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. Henleys Dap needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.

Increasing wage structure of Henleys Dap

– 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 Henleys Dap.

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.

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.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Henleys Dap with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.

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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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