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 - – increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, talent flight as more people leaving formal jobs, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs,
central banks are concerned over increasing inflation, 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 -
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.
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.
Innovation driven organization
– Meituan Dianping is one of the most innovative firm in sector. Manager in Meituan-Dianping: From Startup to Tech Giant Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Meituan Dianping 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 Meituan-Dianping: From Startup to Tech Giant HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Meituan Dianping in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
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.
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.
Ability to recruit top talent
– Meituan Dianping is one of the leading recruiters in the industry. Managers in the Meituan-Dianping: From Startup to Tech Giant are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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.
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.
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 -
Workers concerns about automation
– As automation is fast increasing in the segment, Meituan Dianping 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.
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.
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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Meituan-Dianping: From Startup to Tech Giant 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 Meituan Dianping has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Meituan-Dianping: From Startup to Tech Giant, it seems that the employees of Meituan Dianping don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
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.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Meituan Dianping is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Meituan-Dianping: From Startup to Tech Giant can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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 decision making process
– As mentioned earlier in the report, Meituan Dianping 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. Meituan Dianping 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.
No frontier risks strategy
– After analyzing the HBR case study Meituan-Dianping: From Startup to Tech Giant, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship 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.
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 -
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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Meituan Dianping can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Meituan Dianping can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Meituan Dianping in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Meituan Dianping 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, Meituan-Dianping: From Startup to Tech Giant, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Meituan Dianping to increase its market reach. Meituan Dianping 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. Meituan Dianping can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Meituan Dianping 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 Meituan Dianping to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Meituan Dianping can use these opportunities to build new business models that can help the communities that Meituan Dianping operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
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 -
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.
Consumer confidence and its impact on Meituan Dianping 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.
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.
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.
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Meituan Dianping in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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.
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.
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 Meituan Dianping in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Meituan-Dianping: From Startup to Tech Giant, Meituan Dianping may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
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.
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.
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 Meituan Dianping business can come under increasing regulations regarding data privacy, data security, etc.
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.
