Wenzhou Kangning Hospital: Changing Mental Healthcare in China SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Wenzhou Kangning Hospital: Changing Mental Healthcare in China
The city of Wenzhou in the Province of Zhejiang, long known in China for entrepreneurship, now hosts the country's largest privately owned mental health hospital group. This case traces the development of Wenzhou Kangning Hospital Co, Ltd. from founding to just before its initial public offering to illustrate the extraordinary entrepreneurship happening in China's healthcare space. It highlights the challenges of China's mental health sector and the means company founder Guan Weili employed to address some of them. How will the hospital grow in the future?
Authors :: William C. Kirby, Wei Zhang, Yuanzhuo Wang, Nancy Hua Dai
Swot Analysis of "Wenzhou Kangning Hospital: Changing Mental Healthcare in China" written by William C. Kirby, Wei Zhang, Yuanzhuo Wang, Nancy Hua Dai includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Wenzhou Kangning facing as an external strategic factors. Some of the topics covered in Wenzhou Kangning Hospital: Changing Mental Healthcare in China case study are - Strategic Management Strategies, Government, Health, IPO and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Wenzhou Kangning Hospital: Changing Mental Healthcare in China casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings,
increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Wenzhou Kangning Hospital: Changing Mental Healthcare in China
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Wenzhou Kangning Hospital: Changing Mental Healthcare in China case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Wenzhou Kangning, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Wenzhou Kangning 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 Wenzhou Kangning Hospital: Changing Mental Healthcare in China can be done for the following purposes –
1. Strategic planning using facts provided in Wenzhou Kangning Hospital: Changing Mental Healthcare in China case study
2. Improving business portfolio management of Wenzhou Kangning
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Wenzhou Kangning
Strengths Wenzhou Kangning Hospital: Changing Mental Healthcare in China | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Wenzhou Kangning in Wenzhou Kangning Hospital: Changing Mental Healthcare in China Harvard Business Review case study are -
Sustainable margins compare to other players in Leadership & Managing People industry
– Wenzhou Kangning Hospital: Changing Mental Healthcare in China firm has clearly differentiated products in the market place. This has enabled Wenzhou Kangning to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Wenzhou Kangning to invest into research and development (R&D) and innovation.
Organizational Resilience of Wenzhou Kangning
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Wenzhou Kangning does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Wenzhou Kangning 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.
Training and development
– Wenzhou Kangning has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Wenzhou Kangning Hospital: Changing Mental Healthcare in China 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.
Diverse revenue streams
– Wenzhou Kangning is present in almost all the verticals within the industry. This has provided firm in Wenzhou Kangning Hospital: Changing Mental Healthcare in China 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.
Effective Research and Development (R&D)
– Wenzhou Kangning 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 Wenzhou Kangning Hospital: Changing Mental Healthcare in China - 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
– Wenzhou Kangning has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Wenzhou Kangning 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.
Ability to lead change in Leadership & Managing People field
– Wenzhou Kangning 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 Wenzhou Kangning in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Wenzhou Kangning 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 Wenzhou Kangning is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Wenzhou Kangning Hospital: Changing Mental Healthcare in China Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Wenzhou Kangning digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Wenzhou Kangning 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.
Low bargaining power of suppliers
– Suppliers of Wenzhou Kangning in the sector have low bargaining power. Wenzhou Kangning Hospital: Changing Mental Healthcare in China has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Wenzhou Kangning to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Wenzhou Kangning is one of the most innovative firm in sector. Manager in Wenzhou Kangning Hospital: Changing Mental Healthcare in China Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Wenzhou Kangning Hospital: Changing Mental Healthcare in China | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Wenzhou Kangning Hospital: Changing Mental Healthcare in China are -
Aligning sales with marketing
– It come across in the case study Wenzhou Kangning Hospital: Changing Mental Healthcare in China 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 Wenzhou Kangning Hospital: Changing Mental Healthcare in China can leverage the sales team experience to cultivate customer relationships as Wenzhou Kangning is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Wenzhou Kangning has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Wenzhou Kangning Hospital: Changing Mental Healthcare in China 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 Wenzhou Kangning has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Wenzhou Kangning Hospital: Changing Mental Healthcare in China, it seems that the employees of Wenzhou Kangning 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Wenzhou Kangning Hospital: Changing Mental Healthcare in China, in the dynamic environment Wenzhou Kangning has struggled to respond to the nimble upstart competition. Wenzhou Kangning 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
– Wenzhou Kangning 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 operating costs
– Compare to the competitors, firm in the HBR case study Wenzhou Kangning Hospital: Changing Mental Healthcare in China 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 Wenzhou Kangning 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Wenzhou Kangning Hospital: Changing Mental Healthcare in China, is just above the industry average. Wenzhou Kangning 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.
Slow decision making process
– As mentioned earlier in the report, Wenzhou Kangning 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. Wenzhou Kangning 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Wenzhou Kangning is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Wenzhou Kangning Hospital: Changing Mental Healthcare in China can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, Wenzhou Kangning 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 Wenzhou Kangning Hospital: Changing Mental Healthcare in China | 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 Wenzhou Kangning Hospital: Changing Mental Healthcare in China are -
Learning at scale
– Online learning technologies has now opened space for Wenzhou Kangning 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 Wenzhou Kangning to increase its market reach. Wenzhou Kangning 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.
Using analytics as competitive advantage
– Wenzhou Kangning 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 Wenzhou Kangning Hospital: Changing Mental Healthcare in China - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Wenzhou Kangning to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Wenzhou Kangning in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Manufacturing automation
– Wenzhou Kangning can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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, Wenzhou Kangning 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, Wenzhou Kangning Hospital: Changing Mental Healthcare in China, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Wenzhou Kangning can use these opportunities to build new business models that can help the communities that Wenzhou Kangning operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Wenzhou Kangning is facing challenges because of the dominance of functional experts in the organization. Wenzhou Kangning Hospital: Changing Mental Healthcare in China 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.
Loyalty marketing
– Wenzhou Kangning 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 Wenzhou Kangning 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 Wenzhou Kangning to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Wenzhou Kangning 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 Leadership & Managing People segment.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Wenzhou Kangning can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Buying journey improvements
– Wenzhou Kangning can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Wenzhou Kangning Hospital: Changing Mental Healthcare in China 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.
Threats Wenzhou Kangning Hospital: Changing Mental Healthcare in China External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Wenzhou Kangning Hospital: Changing Mental Healthcare in China are -
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 Wenzhou Kangning business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Wenzhou Kangning 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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Wenzhou Kangning with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Wenzhou Kangning 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. Wenzhou Kangning can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People 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. Wenzhou Kangning 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.
Technology acceleration in Forth Industrial Revolution
– Wenzhou Kangning has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Wenzhou Kangning needs to keep up with the evolution of technology in the Leadership & Managing People 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 Wenzhou Kangning
– 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 Wenzhou Kangning.
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 Wenzhou Kangning in the Leadership & Managing People sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Wenzhou Kangning 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 Wenzhou Kangning Hospital: Changing Mental Healthcare in China .
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. Wenzhou Kangning needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Regulatory challenges
– Wenzhou Kangning 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 Leadership & Managing People industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Wenzhou Kangning in the Leadership & Managing People industry. The Leadership & Managing People 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.
Weighted SWOT Analysis of Wenzhou Kangning Hospital: Changing Mental Healthcare in China 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 Wenzhou Kangning Hospital: Changing Mental Healthcare in China 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 Wenzhou Kangning Hospital: Changing Mental Healthcare in China 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 Wenzhou Kangning Hospital: Changing Mental Healthcare in China 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 Wenzhou Kangning Hospital: Changing Mental Healthcare in China 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 Wenzhou Kangning needs to make to build a sustainable competitive advantage.
