Case Study Description of China's "Furious Five" Smartphones: Strategies and Origins
The case focuses on China's 'furious five' smartphone makers - Huawei, Xiaomi, Lenovo, and OPPO/Vivo, charting the history of the industry and the changing dynamics of the global market. It explains the emerging market context in which these companies operate, its distinctive features, opportunities and challenges, and the various ways they have triumphed over established global brands. The case provides a detailed introduction to the respective Chinese smartphone makers and their products. It discusses their current strategies and how they were influenced at the formative stage by the background and experience of the respective founders. It examines their development trajectories to shed light on their global strategies in the future. Given its dynamic growth and intense competition, China's smartphone market offers an ideal setting to analyse the competitive heterogeneity of firms in an emerging market context.
Authors :: Guoli Chen, Tony Tong, Yangao Xiao, Nianchen Han
Swot Analysis of "China's "Furious Five" Smartphones: Strategies and Origins" written by Guoli Chen, Tony Tong, Yangao Xiao, Nianchen Han includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Smartphone Furious facing as an external strategic factors. Some of the topics covered in China's "Furious Five" Smartphones: Strategies and Origins case study are - Strategic Management Strategies, Emerging markets, Marketing, Mobile and Strategy & Execution.
Some of the macro environment factors that can be used to understand the China's "Furious Five" Smartphones: Strategies and Origins casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, increasing household debt because of falling income levels, increasing commodity prices, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs,
central banks are concerned over increasing inflation, geopolitical disruptions, etc
Introduction to SWOT Analysis of China's "Furious Five" Smartphones: Strategies and Origins
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in China's "Furious Five" Smartphones: Strategies and Origins case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Smartphone Furious, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Smartphone Furious 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 China's "Furious Five" Smartphones: Strategies and Origins can be done for the following purposes –
1. Strategic planning using facts provided in China's "Furious Five" Smartphones: Strategies and Origins case study
2. Improving business portfolio management of Smartphone Furious
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Smartphone Furious
Strengths China's "Furious Five" Smartphones: Strategies and Origins | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Smartphone Furious in China's "Furious Five" Smartphones: Strategies and Origins Harvard Business Review case study are -
Learning organization
- Smartphone Furious 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 Smartphone Furious is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in China's "Furious Five" Smartphones: Strategies and Origins Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Smartphone Furious has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Smartphone Furious to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Smartphone Furious is one of the leading recruiters in the industry. Managers in the China's "Furious Five" Smartphones: Strategies and Origins are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Strategy & Execution industry
– China's "Furious Five" Smartphones: Strategies and Origins firm has clearly differentiated products in the market place. This has enabled Smartphone Furious to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Smartphone Furious to invest into research and development (R&D) and innovation.
Analytics focus
– Smartphone Furious 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 Guoli Chen, Tony Tong, Yangao Xiao, Nianchen Han 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.
Highly skilled collaborators
– Smartphone Furious 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 China's "Furious Five" Smartphones: Strategies and Origins HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Smartphone Furious has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in China's "Furious Five" Smartphones: Strategies and Origins 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.
Ability to lead change in Strategy & Execution field
– Smartphone Furious 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 Smartphone Furious in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Smartphone Furious digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Smartphone Furious 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)
– Smartphone Furious 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 China's "Furious Five" Smartphones: Strategies and Origins - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Smartphone Furious has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Smartphone Furious 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 China's "Furious Five" Smartphones: Strategies and Origins 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 China's "Furious Five" Smartphones: Strategies and Origins | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of China's "Furious Five" Smartphones: Strategies and Origins are -
Aligning sales with marketing
– It come across in the case study China's "Furious Five" Smartphones: Strategies and Origins that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case China's "Furious Five" Smartphones: Strategies and Origins can leverage the sales team experience to cultivate customer relationships as Smartphone Furious is planning to shift buying processes online.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study China's "Furious Five" Smartphones: Strategies and Origins, in the dynamic environment Smartphone Furious has struggled to respond to the nimble upstart competition. Smartphone Furious has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Smartphone Furious has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Smartphone Furious supply chain. Even after few cautionary changes mentioned in the HBR case study - China's "Furious Five" Smartphones: Strategies and Origins, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Smartphone Furious vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– After analyzing the HBR case study China's "Furious Five" Smartphones: Strategies and Origins, it seems that company is thinking about the frontier risks that can impact Strategy & Execution 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.
Low market penetration in new markets
– Outside its home market of Smartphone Furious, firm in the HBR case study China's "Furious Five" Smartphones: Strategies and Origins needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High bargaining power of channel partners
– Because of the regulatory requirements, Guoli Chen, Tony Tong, Yangao Xiao, Nianchen Han suggests that, Smartphone Furious 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 harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Smartphone Furious is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study China's "Furious Five" Smartphones: Strategies and Origins can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study China's "Furious Five" Smartphones: Strategies and Origins, it seems that the employees of Smartphone Furious 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study China's "Furious Five" Smartphones: Strategies and Origins, is just above the industry average. Smartphone Furious 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.
High operating costs
– Compare to the competitors, firm in the HBR case study China's "Furious Five" Smartphones: Strategies and Origins 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 Smartphone Furious 's lucrative customers.
Opportunities China's "Furious Five" Smartphones: Strategies and Origins | 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 China's "Furious Five" Smartphones: Strategies and Origins are -
Manufacturing automation
– Smartphone Furious can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Smartphone Furious in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Developing new processes and practices
– Smartphone Furious can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Smartphone Furious 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, China's "Furious Five" Smartphones: Strategies and Origins, 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 Smartphone Furious 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 Strategy & Execution segment.
Learning at scale
– Online learning technologies has now opened space for Smartphone Furious to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Loyalty marketing
– Smartphone Furious 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Smartphone Furious 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 Smartphone Furious to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Smartphone Furious 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 China's "Furious Five" Smartphones: Strategies and Origins - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Smartphone Furious to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Smartphone Furious can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Smartphone Furious is facing challenges because of the dominance of functional experts in the organization. China's "Furious Five" Smartphones: Strategies and Origins 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.
Buying journey improvements
– Smartphone Furious can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. China's "Furious Five" Smartphones: Strategies and Origins 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.
Better consumer reach
– The expansion of the 5G network will help Smartphone Furious to increase its market reach. Smartphone Furious 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 China's "Furious Five" Smartphones: Strategies and Origins External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study China's "Furious Five" Smartphones: Strategies and Origins are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Smartphone Furious in the Strategy & Execution industry. The Strategy & Execution 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.
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.
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 Smartphone Furious.
Increasing wage structure of Smartphone Furious
– 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 Smartphone Furious.
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.
Environmental challenges
– Smartphone Furious 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. Smartphone Furious can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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. Smartphone Furious 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Smartphone Furious 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 China's "Furious Five" Smartphones: Strategies and Origins .
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. Smartphone Furious needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Smartphone Furious with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Smartphone Furious is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Smartphone Furious has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Smartphone Furious needs to keep up with the evolution of technology in the Strategy & Execution 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.
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 Smartphone Furious in the Strategy & Execution sector and impact the bottomline of the organization.
Weighted SWOT Analysis of China's "Furious Five" Smartphones: Strategies and Origins 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 China's "Furious Five" Smartphones: Strategies and Origins 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 China's "Furious Five" Smartphones: Strategies and Origins 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 China's "Furious Five" Smartphones: Strategies and Origins 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 China's "Furious Five" Smartphones: Strategies and Origins 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 Smartphone Furious needs to make to build a sustainable competitive advantage.
