Branding BY-HEALTH: The Value of Transparency SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Branding BY-HEALTH: The Value of Transparency
BY-HEALTH Co., Ltd. (BY-HEALTH), a Chinese dietary supplement company founded in 1995, had a first-mover advantage as a contemporary health supplement provider in Mainland China. It had successfully utilized this advantage to conquer a significant portion of the market. However, by early 2017, maintaining this leadership position in the market had become increasingly difficult, largely due to deteriorating public perception of consumables originating in China. BY-HEALTH had sought to differentiate itself by actively making its sourcing and production processes fully transparent to stakeholders, most notably by opening a transparent factory in Guangdong Province. While BY-HEALTH's transparent factory and corporate social responsibility activities developed consumer trust and positively contributed to the environment within which the company operated, they were also prohibitively expensive to maintain. It was also difficult to determine how they affected the company's bottom line. As he prepared for a company shareholders' meeting in January 2017, the company's chief operating officer was faced with difficult questions. What programs should the company continue to invest in for the future? Should some of these initiatives have an end date? If they were ended, what effect would this have on the community? How could he communicate the value of the transparent factory to consumers and shareholders? Denghua Yuan is affiliated with Guangdong University of Foreign Studies. William Wei is affiliated with MacEwan University.
Authors :: Denghua Yuan, William Wei, Matthew Mardres
Swot Analysis of "Branding BY-HEALTH: The Value of Transparency" written by Denghua Yuan, William Wei, Matthew Mardres includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Transparent Health facing as an external strategic factors. Some of the topics covered in Branding BY-HEALTH: The Value of Transparency case study are - Strategic Management Strategies, Marketing, Transparency and Global Business.
Some of the macro environment factors that can be used to understand the Branding BY-HEALTH: The Value of Transparency casestudy better are - – geopolitical disruptions, increasing government debt because of Covid-19 spendings, technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies,
central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Branding BY-HEALTH: The Value of Transparency
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Branding BY-HEALTH: The Value of Transparency case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Transparent Health, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Transparent Health 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 Branding BY-HEALTH: The Value of Transparency can be done for the following purposes –
1. Strategic planning using facts provided in Branding BY-HEALTH: The Value of Transparency case study
2. Improving business portfolio management of Transparent Health
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Transparent Health
Strengths Branding BY-HEALTH: The Value of Transparency | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Transparent Health in Branding BY-HEALTH: The Value of Transparency Harvard Business Review case study are -
Learning organization
- Transparent Health 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 Transparent Health is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Branding BY-HEALTH: The Value of Transparency Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Transparent Health 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 Global Business segment
- digital transformation varies from industry to industry. For Transparent Health digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Transparent Health 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.
Innovation driven organization
– Transparent Health is one of the most innovative firm in sector. Manager in Branding BY-HEALTH: The Value of Transparency 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
– Transparent Health 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 Branding BY-HEALTH: The Value of Transparency HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the Branding BY-HEALTH: The Value of Transparency 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.
Diverse revenue streams
– Transparent Health is present in almost all the verticals within the industry. This has provided firm in Branding BY-HEALTH: The Value of Transparency 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.
Superior customer experience
– The customer experience strategy of Transparent Health in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Transparent Health in the sector have low bargaining power. Branding BY-HEALTH: The Value of Transparency has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Transparent Health to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Transparent Health is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Transparent Health 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 Branding BY-HEALTH: The Value of Transparency - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Transparent Health 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.
Weaknesses Branding BY-HEALTH: The Value of Transparency | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Branding BY-HEALTH: The Value of Transparency are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Branding BY-HEALTH: The Value of Transparency 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 Transparent Health has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Denghua Yuan, William Wei, Matthew Mardres suggests that, Transparent Health 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.
Slow to strategic competitive environment developments
– As Branding BY-HEALTH: The Value of Transparency HBR case study mentions - Transparent Health 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Transparent Health 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.
Low market penetration in new markets
– Outside its home market of Transparent Health, firm in the HBR case study Branding BY-HEALTH: The Value of Transparency needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Transparent Health is dominated by functional specialists. It is not different from other players in the Global Business segment. Transparent Health needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Transparent Health to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Transparent Health 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. Transparent Health 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Branding BY-HEALTH: The Value of Transparency, is just above the industry average. Transparent Health 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.
Products dominated business model
– Even though Transparent Health 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 - Branding BY-HEALTH: The Value of Transparency should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Transparent Health 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.
Interest costs
– Compare to the competition, Transparent Health 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.
Opportunities Branding BY-HEALTH: The Value of Transparency | 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 Branding BY-HEALTH: The Value of Transparency are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Transparent Health can use these opportunities to build new business models that can help the communities that Transparent Health operates in. Secondly it can use opportunities from government spending in Global Business sector.
Creating value in data economy
– The success of analytics program of Transparent Health has opened avenues for new revenue streams for the organization in the industry. This can help Transparent Health to build a more holistic ecosystem as suggested in the Branding BY-HEALTH: The Value of Transparency case study. Transparent Health can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Transparent Health in the consumer business. Now Transparent Health can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Transparent Health 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Transparent Health in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Leveraging digital technologies
– Transparent Health 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.
Building a culture of innovation
– managers at Transparent Health 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 Global Business segment.
Manufacturing automation
– Transparent Health can use the latest technology developments to improve its manufacturing and designing process in Global Business 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Transparent Health 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, Branding BY-HEALTH: The Value of Transparency, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Transparent Health is facing challenges because of the dominance of functional experts in the organization. Branding BY-HEALTH: The Value of Transparency 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.
Developing new processes and practices
– Transparent Health can develop new processes and procedures in Global Business 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.
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. Transparent Health can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Transparent Health to increase its market reach. Transparent Health 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.
Threats Branding BY-HEALTH: The Value of Transparency External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Branding BY-HEALTH: The Value of Transparency are -
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Branding BY-HEALTH: The Value of Transparency, Transparent Health may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
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 Transparent Health.
Technology acceleration in Forth Industrial Revolution
– Transparent Health has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Transparent Health needs to keep up with the evolution of technology in the Global Business 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Transparent Health 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 Branding BY-HEALTH: The Value of Transparency .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Transparent Health in the Global Business industry. The Global Business 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
– Transparent Health 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 Global Business industry regulations.
High dependence on third party suppliers
– Transparent Health 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.
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 Transparent Health in the Global Business sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Transparent Health with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Transparent Health 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. Transparent Health can take advantage of this fund but it will also bring new competitors in the Global Business 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.
Consumer confidence and its impact on Transparent Health 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.
Weighted SWOT Analysis of Branding BY-HEALTH: The Value of Transparency 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 Branding BY-HEALTH: The Value of Transparency 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 Branding BY-HEALTH: The Value of Transparency 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 Branding BY-HEALTH: The Value of Transparency 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 Branding BY-HEALTH: The Value of Transparency 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 Transparent Health needs to make to build a sustainable competitive advantage.