Value Partners and the Evergrande Situation SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Value Partners and the Evergrande Situation
In June 2012, Cheah Cheng-Hye and his colleagues at Value Partners, a Hong-Kong-based investment firm, received a copy of a short-seller report alleging that Evergrande, one of China's largest property developers, was using fraudulent accounting and paying bribes to secure business. Evergrande's stock plummeted, and Value Partners, which had a sizable holding of Evergrande stock, had to determine how to respond to the allegations. The case provides an opportunity to review Value Partners' research approach to investing in Chinese companies and to assess the merits of the Evergrande allegations.
Swot Analysis of "Value Partners and the Evergrande Situation" written by Paul M. Healy, Keith Chi-ho Wong includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Evergrande Partners facing as an external strategic factors. Some of the topics covered in Value Partners and the Evergrande Situation case study are - Strategic Management Strategies, Business law, Collaboration, Entrepreneurial finance, Ethics, Financial analysis, Financial management, Marketing and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Value Partners and the Evergrande Situation casestudy better are - – supply chains are disrupted by pandemic , technology disruption, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion,
geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Value Partners and the Evergrande Situation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Value Partners and the Evergrande Situation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Evergrande Partners, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Evergrande Partners 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 Value Partners and the Evergrande Situation can be done for the following purposes –
1. Strategic planning using facts provided in Value Partners and the Evergrande Situation case study
2. Improving business portfolio management of Evergrande Partners
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 Evergrande Partners
Strengths Value Partners and the Evergrande Situation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Evergrande Partners in Value Partners and the Evergrande Situation Harvard Business Review case study are -
Successful track record of launching new products
– Evergrande Partners has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Evergrande Partners 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.
Analytics focus
– Evergrande Partners 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 Paul M. Healy, Keith Chi-ho Wong 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.
High switching costs
– The high switching costs that Evergrande Partners 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.
Innovation driven organization
– Evergrande Partners is one of the most innovative firm in sector. Manager in Value Partners and the Evergrande Situation 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
– Evergrande Partners is present in almost all the verticals within the industry. This has provided firm in Value Partners and the Evergrande Situation 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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Evergrande Partners digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Evergrande Partners 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Value Partners and the Evergrande Situation firm has clearly differentiated products in the market place. This has enabled Evergrande Partners to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Evergrande Partners to invest into research and development (R&D) and innovation.
Strong track record of project management
– Evergrande Partners 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 lead change in Finance & Accounting field
– Evergrande Partners 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 Evergrande Partners in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Evergrande Partners 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 Evergrande Partners is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Value Partners and the Evergrande Situation Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Evergrande Partners is one of the leading recruiters in the industry. Managers in the Value Partners and the Evergrande Situation are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Evergrande Partners in the sector have low bargaining power. Value Partners and the Evergrande Situation has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Evergrande Partners to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Value Partners and the Evergrande Situation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Value Partners and the Evergrande Situation are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Evergrande Partners is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Value Partners and the Evergrande Situation can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Evergrande Partners 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 - Value Partners and the Evergrande Situation should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Value Partners and the Evergrande Situation, is just above the industry average. Evergrande Partners 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 bargaining power of channel partners
– Because of the regulatory requirements, Paul M. Healy, Keith Chi-ho Wong suggests that, Evergrande Partners 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Value Partners and the Evergrande Situation, in the dynamic environment Evergrande Partners has struggled to respond to the nimble upstart competition. Evergrande Partners has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the segment, Evergrande Partners 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.
Low market penetration in new markets
– Outside its home market of Evergrande Partners, firm in the HBR case study Value Partners and the Evergrande Situation needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study Value Partners and the Evergrande Situation, 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.
Increasing silos among functional specialists
– The organizational structure of Evergrande Partners is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Evergrande Partners needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Evergrande Partners to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Value Partners and the Evergrande Situation 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 Value Partners and the Evergrande Situation can leverage the sales team experience to cultivate customer relationships as Evergrande Partners is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Value Partners and the Evergrande Situation, it seems that the employees of Evergrande Partners 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.
Opportunities Value Partners and the Evergrande Situation | 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 Value Partners and the Evergrande Situation are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Evergrande Partners 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, Value Partners and the Evergrande Situation, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Evergrande Partners 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.
Developing new processes and practices
– Evergrande Partners can develop new processes and procedures in Finance & Accounting 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 Finance & Accounting industry, but it has also influenced the consumer preferences. Evergrande Partners can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Evergrande Partners can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
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. Evergrande Partners 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. Evergrande Partners 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Evergrande Partners is facing challenges because of the dominance of functional experts in the organization. Value Partners and the Evergrande Situation 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Evergrande Partners can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Evergrande Partners 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 Evergrande Partners to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Evergrande Partners 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Evergrande Partners can use these opportunities to build new business models that can help the communities that Evergrande Partners operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Better consumer reach
– The expansion of the 5G network will help Evergrande Partners to increase its market reach. Evergrande Partners will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Leveraging digital technologies
– Evergrande Partners 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.
Threats Value Partners and the Evergrande Situation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Value Partners and the Evergrande Situation are -
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. Evergrande Partners can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Evergrande Partners 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 Evergrande Partners.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Evergrande Partners with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Value Partners and the Evergrande Situation, Evergrande Partners may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
High dependence on third party suppliers
– Evergrande Partners 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.
Regulatory challenges
– Evergrande Partners 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 Finance & Accounting industry regulations.
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 Evergrande Partners in the Finance & Accounting sector and impact the bottomline of the organization.
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 Evergrande Partners business can come under increasing regulations regarding data privacy, data security, etc.
Consumer confidence and its impact on Evergrande Partners 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.
Stagnating economy with rate increase
– Evergrande Partners 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Evergrande Partners 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 Value Partners and the Evergrande Situation .
Weighted SWOT Analysis of Value Partners and the Evergrande Situation 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 Value Partners and the Evergrande Situation 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 Value Partners and the Evergrande Situation 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 Value Partners and the Evergrande Situation 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 Value Partners and the Evergrande Situation 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 Evergrande Partners needs to make to build a sustainable competitive advantage.
