Meituan-Dianping: From Startup to Tech Giant SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Meituan-Dianping: From Startup to Tech Giant
When Meituan merged with Dazhong Dianping in 2015, the company was no longer the fledgling startup it was in 2010. Founded by Tsinghua alumnus Wang Xing, the newly-formed Meituan-Dianping was valued at US$18 billion, joining an exclusive club of "decacorns," or startup "unicorns" worth at least US$10 billion. Soon, the company's first post-merger fundraising amassed US$3.3 billion, the highest amount the world had ever seen at that point. Our case describes how Meituan-Dianping grew from a simple group-buying website to a diverse online platform that offered products and services ranging from airfare to food delivery. It focuses on Wang's rationale and ethos, particularly how they informed and shaped Meituan and subsequently Meituan-Dianping's strategy. It describes the challenges of entrepreneurship and tech innovation, focusing on management and leadership in a dynamic and intensely competitive environment. It also highlights the considerations behind choosing the right business model during a firm's formative period, illustrating how the firm's positioning (e.g., "Meituan is not a Groupon clone") may influence talent recruitment and even fundraising efforts. Our case is suitable for graduate management/business and executive development programmes that include entrepreneurship, tech innovation, or strategy, as well as those with an international focus, especially on China.
Swot Analysis of "Meituan-Dianping: From Startup to Tech Giant" written by Wee Kiat Lim, Boon Siong Neo includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Meituan Dianping facing as an external strategic factors. Some of the topics covered in Meituan-Dianping: From Startup to Tech Giant case study are - Strategic Management Strategies, Strategy, Technology and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Meituan-Dianping: From Startup to Tech Giant casestudy better are - – supply chains are disrupted by pandemic , technology disruption, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China,
increasing commodity prices, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Meituan-Dianping: From Startup to Tech Giant
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Meituan-Dianping: From Startup to Tech Giant case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Meituan Dianping, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Meituan Dianping 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 Meituan-Dianping: From Startup to Tech Giant can be done for the following purposes –
1. Strategic planning using facts provided in Meituan-Dianping: From Startup to Tech Giant case study
2. Improving business portfolio management of Meituan Dianping
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Meituan Dianping
Strengths Meituan-Dianping: From Startup to Tech Giant | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Meituan Dianping in Meituan-Dianping: From Startup to Tech Giant Harvard Business Review case study are -
Training and development
– Meituan Dianping has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Meituan-Dianping: From Startup to Tech Giant 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.
Analytics focus
– Meituan Dianping 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 Wee Kiat Lim, Boon Siong Neo 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.
Effective Research and Development (R&D)
– Meituan Dianping 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 Meituan-Dianping: From Startup to Tech Giant - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Meituan Dianping 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.
Successful track record of launching new products
– Meituan Dianping has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Meituan Dianping 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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Meituan-Dianping: From Startup to Tech Giant firm has clearly differentiated products in the market place. This has enabled Meituan Dianping to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Meituan Dianping to invest into research and development (R&D) and innovation.
Ability to lead change in Innovation & Entrepreneurship field
– Meituan Dianping 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 Meituan Dianping in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Meituan Dianping in the sector have low bargaining power. Meituan-Dianping: From Startup to Tech Giant has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Meituan Dianping to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Meituan Dianping 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.
Diverse revenue streams
– Meituan Dianping is present in almost all the verticals within the industry. This has provided firm in Meituan-Dianping: From Startup to Tech Giant case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Meituan Dianping digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Meituan Dianping 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.
Operational resilience
– The operational resilience strategy in the Meituan-Dianping: From Startup to Tech Giant 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 Meituan-Dianping: From Startup to Tech Giant | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Meituan-Dianping: From Startup to Tech Giant are -
Lack of clear differentiation of Meituan Dianping products
– To increase the profitability and margins on the products, Meituan Dianping needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study Meituan-Dianping: From Startup to Tech Giant 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 Meituan Dianping 's lucrative customers.
Slow to strategic competitive environment developments
– As Meituan-Dianping: From Startup to Tech Giant HBR case study mentions - Meituan Dianping 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.
Increasing silos among functional specialists
– The organizational structure of Meituan Dianping is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Meituan Dianping needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Meituan Dianping to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Meituan-Dianping: From Startup to Tech Giant, in the dynamic environment Meituan Dianping has struggled to respond to the nimble upstart competition. Meituan Dianping has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Meituan Dianping 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 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 Meituan Dianping supply chain. Even after few cautionary changes mentioned in the HBR case study - Meituan-Dianping: From Startup to Tech Giant, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Meituan Dianping vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Meituan Dianping 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.
Products dominated business model
– Even though Meituan Dianping 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 - Meituan-Dianping: From Startup to Tech Giant should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Meituan Dianping 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.
Need for greater diversity
– Meituan Dianping 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.
Opportunities Meituan-Dianping: From Startup to Tech Giant | 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 Meituan-Dianping: From Startup to Tech Giant 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. Meituan Dianping can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Meituan Dianping 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.
Manufacturing automation
– Meituan Dianping can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship 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.
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 Meituan Dianping 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Meituan Dianping is facing challenges because of the dominance of functional experts in the organization. Meituan-Dianping: From Startup to Tech Giant 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.
Building a culture of innovation
– managers at Meituan Dianping 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 Innovation & Entrepreneurship segment.
Buying journey improvements
– Meituan Dianping can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Meituan-Dianping: From Startup to Tech Giant 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.
Creating value in data economy
– The success of analytics program of Meituan Dianping has opened avenues for new revenue streams for the organization in the industry. This can help Meituan Dianping to build a more holistic ecosystem as suggested in the Meituan-Dianping: From Startup to Tech Giant case study. Meituan Dianping 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, Meituan Dianping 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.
Leveraging digital technologies
– Meituan Dianping 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Meituan Dianping can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Meituan Dianping in the consumer business. Now Meituan Dianping can target international markets with far fewer capital restrictions requirements than the existing system.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Meituan Dianping can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Meituan-Dianping: From Startup to Tech Giant External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Meituan-Dianping: From Startup to Tech Giant are -
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. Meituan Dianping needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Regulatory challenges
– Meituan Dianping 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 Innovation & Entrepreneurship 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 Meituan Dianping.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Meituan Dianping can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Meituan Dianping is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Meituan Dianping 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. Meituan Dianping can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Meituan Dianping 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 Meituan-Dianping: From Startup to Tech Giant .
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. Meituan Dianping 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.
Technology acceleration in Forth Industrial Revolution
– Meituan Dianping has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Meituan Dianping needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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.
Stagnating economy with rate increase
– Meituan Dianping 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Meituan Dianping with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Meituan Dianping 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.
Increasing wage structure of Meituan Dianping
– 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 Meituan Dianping.
Weighted SWOT Analysis of Meituan-Dianping: From Startup to Tech Giant 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 Meituan-Dianping: From Startup to Tech Giant 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 Meituan-Dianping: From Startup to Tech Giant 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 Meituan-Dianping: From Startup to Tech Giant 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 Meituan-Dianping: From Startup to Tech Giant 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 Meituan Dianping needs to make to build a sustainable competitive advantage.