East of Africa (and West of China): Chinese Business in Africa SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of East of Africa (and West of China): Chinese Business in Africa
Trade between China and Africa was estimated to have quadrupled between 2000 and 2008, with China becoming Africa's third-largest trading partner and second-largest export destination. Trade relationships between China and Africa were mainly concentrated in three areas: primary resources from Africa to China; cheap manufactured goods and FDI from China to Africa, including new investment opportunities such as land acquisition; and outsourcing of farm production, particularly of staples and biofuels. It was estimated that by 2009, 1 million Chinese farmers were working in Africa. Africa had large extensions of fertile land available, although the lack of infrastructure (not only for farming activities themselves but also for transport) and political factors such as land ownership, corruption and governance were serious issues. This case discusses China's growing businesses with Africa and the risks that these can entail, particularly for Chinese state-owned enterprises.
Swot Analysis of "East of Africa (and West of China): Chinese Business in Africa" written by Marcus Schuetz, Carola Ramon-Berjano includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Africa China facing as an external strategic factors. Some of the topics covered in East of Africa (and West of China): Chinese Business in Africa case study are - Strategic Management Strategies, National competitiveness, Operations management and Global Business.
Some of the macro environment factors that can be used to understand the East of Africa (and West of China): Chinese Business in Africa casestudy better are - – geopolitical disruptions, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization,
wage bills are increasing, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of East of Africa (and West of China): Chinese Business in Africa
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in East of Africa (and West of China): Chinese Business in Africa case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Africa China, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Africa China 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 East of Africa (and West of China): Chinese Business in Africa can be done for the following purposes –
1. Strategic planning using facts provided in East of Africa (and West of China): Chinese Business in Africa case study
2. Improving business portfolio management of Africa China
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Africa China
Strengths East of Africa (and West of China): Chinese Business in Africa | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Africa China in East of Africa (and West of China): Chinese Business in Africa Harvard Business Review case study are -
Organizational Resilience of Africa China
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Africa China does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Africa China digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Africa China 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 Global Business industry
– East of Africa (and West of China): Chinese Business in Africa firm has clearly differentiated products in the market place. This has enabled Africa China to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Africa China to invest into research and development (R&D) and innovation.
Learning organization
- Africa China 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 Africa China is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in East of Africa (and West of China): Chinese Business in Africa Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Africa China 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 Marcus Schuetz, Carola Ramon-Berjano 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.
Low bargaining power of suppliers
– Suppliers of Africa China in the sector have low bargaining power. East of Africa (and West of China): Chinese Business in Africa has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Africa China to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Africa China is one of the most innovative firm in sector. Manager in East of Africa (and West of China): Chinese Business in Africa Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Africa China has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in East of Africa (and West of China): Chinese Business in Africa HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Africa China 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 Global Business field
– Africa China 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 Africa China in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Africa China 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.
Diverse revenue streams
– Africa China is present in almost all the verticals within the industry. This has provided firm in East of Africa (and West of China): Chinese Business in Africa 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.
Weaknesses East of Africa (and West of China): Chinese Business in Africa | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of East of Africa (and West of China): Chinese Business in Africa are -
Products dominated business model
– Even though Africa China 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 - East of Africa (and West of China): Chinese Business in Africa should strive to include more intangible value offerings along with its core products and services.
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 Africa China supply chain. Even after few cautionary changes mentioned in the HBR case study - East of Africa (and West of China): Chinese Business in Africa, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Africa China vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Marcus Schuetz, Carola Ramon-Berjano suggests that, Africa China 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.
Low market penetration in new markets
– Outside its home market of Africa China, firm in the HBR case study East of Africa (and West of China): Chinese Business in Africa needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Africa China 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.
Skills based hiring
– The stress on hiring functional specialists at Africa China 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.
Increasing silos among functional specialists
– The organizational structure of Africa China is dominated by functional specialists. It is not different from other players in the Global Business segment. Africa China needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Africa China to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the East of Africa (and West of China): Chinese Business in Africa 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 Africa China has relatively successful track record of launching new products.
No frontier risks strategy
– After analyzing the HBR case study East of Africa (and West of China): Chinese Business in Africa, it seems that company is thinking about the frontier risks that can impact Global Business strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High operating costs
– Compare to the competitors, firm in the HBR case study East of Africa (and West of China): Chinese Business in Africa 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 Africa China 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Africa China 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 East of Africa (and West of China): Chinese Business in Africa | 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 East of Africa (and West of China): Chinese Business in Africa are -
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. Africa China can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Africa China 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 Global Business segment.
Creating value in data economy
– The success of analytics program of Africa China has opened avenues for new revenue streams for the organization in the industry. This can help Africa China to build a more holistic ecosystem as suggested in the East of Africa (and West of China): Chinese Business in Africa case study. Africa China can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Africa China in the consumer business. Now Africa China can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Africa China 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 Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Africa China 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. Africa China 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Africa China 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 Africa China to hire the very best people irrespective of their geographical location.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Africa China 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
– Africa China can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. East of Africa (and West of China): Chinese Business in Africa 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.
Manufacturing automation
– Africa China can use the latest technology developments to improve its manufacturing and designing process in Global Business 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.
Learning at scale
– Online learning technologies has now opened space for Africa China 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.
Using analytics as competitive advantage
– Africa China 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 East of Africa (and West of China): Chinese Business in Africa - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Africa China to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Africa China can develop new processes and procedures in Global Business 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.
Threats East of Africa (and West of China): Chinese Business in Africa External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study East of Africa (and West of China): Chinese Business in Africa are -
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Africa China needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Africa China can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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 Africa China in the Global Business sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Africa China 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study East of Africa (and West of China): Chinese Business in Africa, Africa China may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
Increasing wage structure of Africa China
– 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 Africa China.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Africa China 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 East of Africa (and West of China): Chinese Business in Africa .
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 Africa China.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Africa China with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Africa China 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. Africa China can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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 Africa China business can come under increasing regulations regarding data privacy, data security, etc.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Weighted SWOT Analysis of East of Africa (and West of China): Chinese Business in Africa 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 East of Africa (and West of China): Chinese Business in Africa 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 East of Africa (and West of China): Chinese Business in Africa 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 East of Africa (and West of China): Chinese Business in Africa 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 East of Africa (and West of China): Chinese Business in Africa 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 Africa China needs to make to build a sustainable competitive advantage.
