Case Study Description of Formosa Plastics Group: Business Continuity Forever
To maximize their effectiveness, color cases should be printed in color.Wang Yung-ching, legendary Taiwanese businessman and philanthropist, passed away in 2008. He left behind an estate worth US $5.5 billion, but did not leave a will. The case discusses the potential motivation for Wang, and uses it to study succession planning for family businesses.
Authors :: Li Jin, Joseph P.H. Fan, Winnie S.C. Leung
Swot Analysis of "Formosa Plastics Group: Business Continuity Forever" written by Li Jin, Joseph P.H. Fan, Winnie S.C. Leung includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ching Color.wang facing as an external strategic factors. Some of the topics covered in Formosa Plastics Group: Business Continuity Forever case study are - Strategic Management Strategies, Social enterprise, Succession planning and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Formosa Plastics Group: Business Continuity Forever casestudy better are - – central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models,
talent flight as more people leaving formal jobs, there is backlash against globalization, etc
Introduction to SWOT Analysis of Formosa Plastics Group: Business Continuity Forever
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Formosa Plastics Group: Business Continuity Forever case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ching Color.wang, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ching Color.wang 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 Formosa Plastics Group: Business Continuity Forever can be done for the following purposes –
1. Strategic planning using facts provided in Formosa Plastics Group: Business Continuity Forever case study
2. Improving business portfolio management of Ching Color.wang
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ching Color.wang
Strengths Formosa Plastics Group: Business Continuity Forever | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ching Color.wang in Formosa Plastics Group: Business Continuity Forever Harvard Business Review case study are -
High switching costs
– The high switching costs that Ching Color.wang 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.
Superior customer experience
– The customer experience strategy of Ching Color.wang in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Ching Color.wang 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 Ching Color.wang is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Formosa Plastics Group: Business Continuity Forever Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Ching Color.wang are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Ching Color.wang digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ching Color.wang 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.
Ability to lead change in Finance & Accounting field
– Ching Color.wang 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 Ching Color.wang in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Ching Color.wang is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Ching Color.wang is one of the leading recruiters in the industry. Managers in the Formosa Plastics Group: Business Continuity Forever are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Ching Color.wang is one of the most innovative firm in sector. Manager in Formosa Plastics Group: Business Continuity Forever 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
– Ching Color.wang is present in almost all the verticals within the industry. This has provided firm in Formosa Plastics Group: Business Continuity Forever 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)
– Ching Color.wang 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 Formosa Plastics Group: Business Continuity Forever - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Finance & Accounting industry
– Formosa Plastics Group: Business Continuity Forever firm has clearly differentiated products in the market place. This has enabled Ching Color.wang to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Ching Color.wang to invest into research and development (R&D) and innovation.
Weaknesses Formosa Plastics Group: Business Continuity Forever | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Formosa Plastics Group: Business Continuity Forever are -
Slow decision making process
– As mentioned earlier in the report, Ching Color.wang 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. Ching Color.wang 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Formosa Plastics Group: Business Continuity Forever, it seems that the employees of Ching Color.wang 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 Formosa Plastics Group: Business Continuity Forever, is just above the industry average. Ching Color.wang 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 to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ching Color.wang is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Formosa Plastics Group: Business Continuity Forever can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Ching Color.wang, firm in the HBR case study Formosa Plastics Group: Business Continuity Forever needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the segment, Ching Color.wang 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.
No frontier risks strategy
– After analyzing the HBR case study Formosa Plastics Group: Business Continuity Forever, it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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.
Products dominated business model
– Even though Ching Color.wang has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Formosa Plastics Group: Business Continuity Forever should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Formosa Plastics Group: Business Continuity Forever 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 Ching Color.wang has relatively successful track record of launching new products.
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 Ching Color.wang supply chain. Even after few cautionary changes mentioned in the HBR case study - Formosa Plastics Group: Business Continuity Forever, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ching Color.wang vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Ching Color.wang 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 Formosa Plastics Group: Business Continuity Forever | 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 Formosa Plastics Group: Business Continuity Forever are -
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 Ching Color.wang 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Ching Color.wang can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Ching Color.wang 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. Ching Color.wang 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.
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 Ching Color.wang in the consumer business. Now Ching Color.wang can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Ching Color.wang can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Formosa Plastics Group: Business Continuity Forever 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ching Color.wang 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 Ching Color.wang to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ching Color.wang in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ching Color.wang 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, Formosa Plastics Group: Business Continuity Forever, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Ching Color.wang to increase its market reach. Ching Color.wang 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ching Color.wang is facing challenges because of the dominance of functional experts in the organization. Formosa Plastics Group: Business Continuity Forever 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.
Creating value in data economy
– The success of analytics program of Ching Color.wang has opened avenues for new revenue streams for the organization in the industry. This can help Ching Color.wang to build a more holistic ecosystem as suggested in the Formosa Plastics Group: Business Continuity Forever case study. Ching Color.wang can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Ching Color.wang 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.
Building a culture of innovation
– managers at Ching Color.wang 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 Finance & Accounting segment.
Threats Formosa Plastics Group: Business Continuity Forever External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Formosa Plastics Group: Business Continuity Forever are -
Environmental challenges
– Ching Color.wang 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. Ching Color.wang can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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. Ching Color.wang needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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 Ching Color.wang business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Ching Color.wang 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.
High dependence on third party suppliers
– Ching Color.wang high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Ching Color.wang can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Ching Color.wang is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ching Color.wang in the Finance & Accounting industry. The Finance & Accounting 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.
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 Ching Color.wang.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ching Color.wang with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Ching Color.wang in the Finance & Accounting sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Formosa Plastics Group: Business Continuity Forever 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 Formosa Plastics Group: Business Continuity Forever 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 Formosa Plastics Group: Business Continuity Forever 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 Formosa Plastics Group: Business Continuity Forever 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 Formosa Plastics Group: Business Continuity Forever 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 Ching Color.wang needs to make to build a sustainable competitive advantage.
