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 transportation and logistics costs, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, talent flight as more people leaving formal jobs, wage bills are increasing, there is increasing trade war between United States & China,
geopolitical disruptions, there is backlash against globalization, 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 -
High switching costs
– The high switching costs that Smartphone Furious 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.
Cross disciplinary teams
– Horizontal connected teams at the Smartphone Furious 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.
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.
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.
Strong track record of project management
– Smartphone Furious is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
Innovation driven organization
– Smartphone Furious is one of the most innovative firm in sector. Manager in China's "Furious Five" Smartphones: Strategies and Origins Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Smartphone Furious is present in almost all the verticals within the industry. This has provided firm in China's "Furious Five" Smartphones: Strategies and Origins 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.
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.
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.
Organizational Resilience of Smartphone Furious
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Smartphone Furious does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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 -
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.
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.
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.
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 cash cycle compare to competitors
Smartphone Furious 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.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the China's "Furious Five" Smartphones: Strategies and Origins 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 Smartphone Furious has relatively successful track record of launching new products.
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 strategic competitive environment developments
– As China's "Furious Five" Smartphones: Strategies and Origins HBR case study mentions - Smartphone Furious 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.
Capital Spending Reduction
– Even during the low interest decade, Smartphone Furious 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.
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 -
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.
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 Smartphone Furious 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.
Creating value in data economy
– The success of analytics program of Smartphone Furious has opened avenues for new revenue streams for the organization in the industry. This can help Smartphone Furious to build a more holistic ecosystem as suggested in the China's "Furious Five" Smartphones: Strategies and Origins case study. Smartphone Furious can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Smartphone Furious 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Smartphone Furious 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. Smartphone Furious 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.
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.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Smartphone Furious can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Smartphone Furious 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Smartphone Furious can use these opportunities to build new business models that can help the communities that Smartphone Furious operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
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 Smartphone Furious in the consumer business. Now Smartphone Furious can target international markets with far fewer capital restrictions requirements than the existing system.
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.
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 -
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.
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.
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.
Consumer confidence and its impact on Smartphone Furious 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 Smartphone Furious with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Smartphone Furious 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 Strategy & Execution industry regulations.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Smartphone Furious can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Smartphone Furious 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.
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.
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 Smartphone Furious business can come under increasing regulations regarding data privacy, data security, etc.
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 .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study China's "Furious Five" Smartphones: Strategies and Origins, Smartphone Furious may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
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.
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.