China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry
In 2010, 97% of the world's supply of rare earth elements (REE) came from mines in China. Global demand tripled from 40,000 tonnes to 120,000 tonnes between 2000 and 2010 while China steadily cut its annual exports. Fears of a crisis in Western countries increased as alternative supplies of these materials were sought. REE were used in a number of products, including in the military industry. Reports indicated that the US defence industry was "totally dependent" on imports of REE and advised defence contractors to try to limit their dependence on these materials as well as to actively seek substitutes. The United States faced the challenge of rebuilding domestic REE supplies to achieve self-sufficiency and protect the environment.
Swot Analysis of "China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry" written by Carola Ramon-Berjano, Marcus Schuetz includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ree Defence facing as an external strategic factors. Some of the topics covered in China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry case study are - Strategic Management Strategies, International business and Global Business.
Some of the macro environment factors that can be used to understand the China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry casestudy better are - – increasing household debt because of falling income levels, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic ,
wage bills are increasing, there is backlash against globalization, etc
Introduction to SWOT Analysis of China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ree Defence, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ree Defence 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 China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry can be done for the following purposes –
1. Strategic planning using facts provided in China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry case study
2. Improving business portfolio management of Ree Defence
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 Ree Defence
Strengths China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ree Defence in China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry Harvard Business Review case study are -
High brand equity
– Ree Defence has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ree Defence to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Ree Defence
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ree Defence does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Ree Defence in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Ree Defence has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry 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.
Ability to lead change in Global Business field
– Ree Defence 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 Ree Defence in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Ree Defence is one of the most innovative firm in sector. Manager in China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Ree Defence digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ree Defence 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.
Learning organization
- Ree Defence 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 Ree Defence is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Ree Defence 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.
Strong track record of project management
– Ree Defence is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Ree Defence has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ree Defence 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.
Operational resilience
– The operational resilience strategy in the China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry 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.
Weaknesses China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry, it seems that the employees of Ree Defence 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.
Aligning sales with marketing
– It come across in the case study China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry 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 China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry can leverage the sales team experience to cultivate customer relationships as Ree Defence is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Ree Defence is dominated by functional specialists. It is not different from other players in the Global Business segment. Ree Defence needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ree Defence to focus more on services rather than just following the product oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Carola Ramon-Berjano, Marcus Schuetz suggests that, Ree Defence 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.
Products dominated business model
– Even though Ree Defence 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 - China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, firm in the HBR case study China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry 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 Ree Defence 's lucrative customers.
Lack of clear differentiation of Ree Defence products
– To increase the profitability and margins on the products, Ree Defence needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Ree Defence 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.
High cash cycle compare to competitors
Ree Defence 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry 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 Ree Defence has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Ree Defence 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.
Opportunities China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry | 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 China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry are -
Better consumer reach
– The expansion of the 5G network will help Ree Defence to increase its market reach. Ree Defence 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.
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 Ree Defence in the consumer business. Now Ree Defence can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ree Defence can use these opportunities to build new business models that can help the communities that Ree Defence operates in. Secondly it can use opportunities from government spending in Global Business sector.
Manufacturing automation
– Ree Defence 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.
Using analytics as competitive advantage
– Ree Defence 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 China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ree Defence to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Ree Defence 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.
Loyalty marketing
– Ree Defence has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Building a culture of innovation
– managers at Ree Defence 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ree Defence 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 Ree Defence to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Ree Defence can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ree Defence can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Ree Defence can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ree Defence 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.
Threats China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry are -
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Ree Defence will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Environmental challenges
– Ree Defence 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. Ree Defence can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Consumer confidence and its impact on Ree Defence 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.
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.
High dependence on third party suppliers
– Ree Defence 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ree Defence 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 China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry .
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 Ree Defence.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ree Defence in the Global Business industry. The Global Business 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry, Ree Defence 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 .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ree Defence with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Ree Defence
– 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 Ree Defence.
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 Ree Defence business can come under increasing regulations regarding data privacy, data security, etc.
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. Ree Defence can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry 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 China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry 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 China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry 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 China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry 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 China Plays Heavy Metal: Rare Earth Elements and the US Defence Industry 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 Ree Defence needs to make to build a sustainable competitive advantage.
