Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management
Chinese Pharmaceuticals (HK) Limited, a private, family-owned business in Hong Kong that supplies Chinese medicine products to retailers in Hong Kong and Macau, faces a situation where additional cash is needed for additional inventory. Jason Kwok, the General Manager is challenged to maintain adequate inventory levels of Noto37, a Chinese herbal medicine used to control cholesterol and blood pressure levels. Without compromising the company's cash flow needs, Jason has to implement better systems internally, by improving sales forecasting and prudent inventory management, to avoid shortages of the product.
Swot Analysis of "Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management" written by Ronald Lau, Joseph Santana Fernandez includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Inventory Hk facing as an external strategic factors. Some of the topics covered in Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management case study are - Strategic Management Strategies, Forecasting, Health, Product development, Sales, Supply chain and Technology & Operations.
Some of the macro environment factors that can be used to understand the Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management casestudy better are - – supply chains are disrupted by pandemic , increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, technology disruption, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, increasing commodity prices,
increasing energy prices, there is backlash against globalization, etc
Introduction to SWOT Analysis of Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Inventory Hk, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Inventory Hk 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 Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management can be done for the following purposes –
1. Strategic planning using facts provided in Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management case study
2. Improving business portfolio management of Inventory Hk
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 Inventory Hk
Strengths Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Inventory Hk in Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management Harvard Business Review case study are -
Innovation driven organization
– Inventory Hk is one of the most innovative firm in sector. Manager in Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management 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
– Inventory Hk has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management 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 Inventory Hk 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.
Organizational Resilience of Inventory Hk
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Inventory Hk does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Inventory Hk digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Inventory Hk 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.
Effective Research and Development (R&D)
– Inventory Hk 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 Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Inventory Hk is present in almost all the verticals within the industry. This has provided firm in Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management 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.
Learning organization
- Inventory Hk 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 Inventory Hk is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Inventory Hk has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Inventory Hk to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Inventory Hk is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Inventory Hk in the sector have low bargaining power. Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Inventory Hk to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Inventory Hk 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 Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management are -
Slow decision making process
– As mentioned earlier in the report, Inventory Hk 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. Inventory Hk 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Inventory Hk 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.
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 Inventory Hk supply chain. Even after few cautionary changes mentioned in the HBR case study - Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Inventory Hk vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Inventory Hk 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.
Increasing silos among functional specialists
– The organizational structure of Inventory Hk is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Inventory Hk needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Inventory Hk to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Inventory Hk 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
– Inventory Hk 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.
Low market penetration in new markets
– Outside its home market of Inventory Hk, firm in the HBR case study Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management, in the dynamic environment Inventory Hk has struggled to respond to the nimble upstart competition. Inventory Hk has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Inventory Hk is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management, 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.
Opportunities Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management | 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 Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management are -
Buying journey improvements
– Inventory Hk can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Inventory Hk 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. Inventory Hk 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.
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 Inventory Hk 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.
Learning at scale
– Online learning technologies has now opened space for Inventory Hk 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.
Better consumer reach
– The expansion of the 5G network will help Inventory Hk to increase its market reach. Inventory Hk 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
– Inventory Hk 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
– Inventory Hk 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 Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Inventory Hk 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
– Inventory Hk 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Inventory Hk is facing challenges because of the dominance of functional experts in the organization. Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Inventory Hk 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, Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Inventory Hk 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.
Loyalty marketing
– Inventory Hk 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.
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. Inventory Hk can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management are -
Stagnating economy with rate increase
– Inventory Hk 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.
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. Inventory Hk can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Inventory Hk needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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 Inventory Hk in the Technology & Operations sector and impact the bottomline of the organization.
Increasing wage structure of Inventory Hk
– 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 Inventory Hk.
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.
Consumer confidence and its impact on Inventory Hk 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.
Shortening product life cycle
– it is one of the major threat that Inventory Hk is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Inventory Hk 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.
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 Inventory Hk business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Inventory Hk 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 Technology & Operations industry regulations.
Environmental challenges
– Inventory Hk 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. Inventory Hk can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Technology acceleration in Forth Industrial Revolution
– Inventory Hk has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Inventory Hk needs to keep up with the evolution of technology in the Technology & Operations sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Weighted SWOT Analysis of Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management 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 Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management 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 Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management 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 Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management 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 Chinese Pharmaceuticals (HK) Limited: Effective Forecasting for Optimal Inventory Management 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 Inventory Hk needs to make to build a sustainable competitive advantage.
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