The case describes Shanghai's decision to abandon growth of Gross Domestic Product (GDP) as its primary metric of measuring success. Within this context, the case presents the historical roots of GDP and how the measure is calculated. Moreover, the case discusses the prominence of GDP as a measure of economic success. After a discussion of China's and Shanghai's use of GDP growth targets, the case discusses Shanghai's past successes and failures. Specifically, the case describes the enormous economic growth that Shanghai has experienced alongside significant economic, social, and environmental failures such as the inefficient use of resources, pollution, and growing inequality. The case concludes with the decision to abandon GDP growth as a measure of success and opens questions about what this means for Shanghai and China. Moreover, the case raises the question of what alternative metrics measuring success might look like.
Authors :: George Serafeim, Rebecca Henderson, Shannon Gombos
Swot Analysis of "Shanghai: GDP Apostasy" written by George Serafeim, Rebecca Henderson, Shannon Gombos includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Gdp Shanghai's facing as an external strategic factors. Some of the topics covered in Shanghai: GDP Apostasy case study are - Strategic Management Strategies, Corporate governance, Economic development, Economics, Organizational culture, Performance measurement, Sustainability and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Shanghai: GDP Apostasy casestudy better are - – increasing commodity prices, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, geopolitical disruptions,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Shanghai: GDP Apostasy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Shanghai: GDP Apostasy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Gdp Shanghai's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Gdp Shanghai's 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 Shanghai: GDP Apostasy can be done for the following purposes –
1. Strategic planning using facts provided in Shanghai: GDP Apostasy case study
2. Improving business portfolio management of Gdp Shanghai's
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 Gdp Shanghai's
Strengths Shanghai: GDP Apostasy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Gdp Shanghai's in Shanghai: GDP Apostasy Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Gdp Shanghai's in the sector have low bargaining power. Shanghai: GDP Apostasy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Gdp Shanghai's to manage not only supply disruptions but also source products at highly competitive prices.
Successful track record of launching new products
– Gdp Shanghai's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Gdp Shanghai's 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.
High switching costs
– The high switching costs that Gdp Shanghai's 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
– Gdp Shanghai's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Shanghai: GDP Apostasy 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.
Learning organization
- Gdp Shanghai's 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 Gdp Shanghai's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Shanghai: GDP Apostasy Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Gdp Shanghai's 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 Shanghai: GDP Apostasy - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Finance & Accounting field
– Gdp Shanghai's 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 Gdp Shanghai's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Gdp Shanghai's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Gdp Shanghai's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Gdp Shanghai's 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.
Analytics focus
– Gdp Shanghai's 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 George Serafeim, Rebecca Henderson, Shannon Gombos 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.
Operational resilience
– The operational resilience strategy in the Shanghai: GDP Apostasy Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Sustainable margins compare to other players in Finance & Accounting industry
– Shanghai: GDP Apostasy firm has clearly differentiated products in the market place. This has enabled Gdp Shanghai's to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Gdp Shanghai's to invest into research and development (R&D) and innovation.
Weaknesses Shanghai: GDP Apostasy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shanghai: GDP Apostasy are -
High operating costs
– Compare to the competitors, firm in the HBR case study Shanghai: GDP Apostasy 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 Gdp Shanghai's 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study Shanghai: GDP Apostasy, 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Gdp Shanghai's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Shanghai: GDP Apostasy can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Need for greater diversity
– Gdp Shanghai's has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Shanghai: GDP Apostasy 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 Gdp Shanghai's has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Shanghai: GDP Apostasy, it seems that the employees of Gdp Shanghai's 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.
High cash cycle compare to competitors
Gdp Shanghai's 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.
Products dominated business model
– Even though Gdp Shanghai's 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 - Shanghai: GDP Apostasy should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study Shanghai: GDP Apostasy 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 Shanghai: GDP Apostasy can leverage the sales team experience to cultivate customer relationships as Gdp Shanghai's is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Gdp Shanghai's 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.
Skills based hiring
– The stress on hiring functional specialists at Gdp Shanghai's 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.
Opportunities Shanghai: GDP Apostasy | 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 Shanghai: GDP Apostasy are -
Leveraging digital technologies
– Gdp Shanghai's 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.
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. Gdp Shanghai's 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. Gdp Shanghai's 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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Gdp Shanghai's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Developing new processes and practices
– Gdp Shanghai's 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.
Creating value in data economy
– The success of analytics program of Gdp Shanghai's has opened avenues for new revenue streams for the organization in the industry. This can help Gdp Shanghai's to build a more holistic ecosystem as suggested in the Shanghai: GDP Apostasy case study. Gdp Shanghai's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Gdp Shanghai's 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.
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. Gdp Shanghai's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Gdp Shanghai's 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 Shanghai: GDP Apostasy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Gdp Shanghai's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Gdp Shanghai's 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.
Better consumer reach
– The expansion of the 5G network will help Gdp Shanghai's to increase its market reach. Gdp Shanghai's 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Gdp Shanghai's 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 Gdp Shanghai's to hire the very best people irrespective of their geographical location.
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 Gdp Shanghai's 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Gdp Shanghai's is facing challenges because of the dominance of functional experts in the organization. Shanghai: GDP Apostasy 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.
Threats Shanghai: GDP Apostasy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Shanghai: GDP Apostasy are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Gdp Shanghai's 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 Shanghai: GDP Apostasy .
Stagnating economy with rate increase
– Gdp Shanghai's 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Gdp Shanghai's 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.
High dependence on third party suppliers
– Gdp Shanghai's 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.
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 Gdp Shanghai's.
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. Gdp Shanghai's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Gdp Shanghai's 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.
Environmental challenges
– Gdp Shanghai's 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. Gdp Shanghai's can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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.
Consumer confidence and its impact on Gdp Shanghai's 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.
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 Gdp Shanghai's business can come under increasing regulations regarding data privacy, data security, etc.
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. Gdp Shanghai's needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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 Gdp Shanghai's in the Finance & Accounting sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Shanghai: GDP Apostasy 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 Shanghai: GDP Apostasy 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 Shanghai: GDP Apostasy 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 Shanghai: GDP Apostasy 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 Shanghai: GDP Apostasy 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 Gdp Shanghai's needs to make to build a sustainable competitive advantage.
