China Construction America (A): The Road Ahead SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of China Construction America (A): The Road Ahead
To maximize their effectiveness, color cases should be printed in color.How did a Chinese state-owned construction company strike one deal after another in South Carolina despite political backlash and in New York where well-established competitors dominate? The case examines the U.S. market entry strategy of the CSCEC, China's leading state-owned construction company. It does so by way of the CEO of its U.S. subsidiary and his challenge to sustain the company's exceptional growth in the face of an unprecedented slowdown in the U.S. construction industry. The case also offers a window into the processes and related issues associated with the accelerated overseas expansion of Chinese state-owned businesses.
Swot Analysis of "China Construction America (A): The Road Ahead" written by Regina Abrami, Weiqi Zhang includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Construction Owned facing as an external strategic factors. Some of the topics covered in China Construction America (A): The Road Ahead case study are - Strategic Management Strategies, Strategy execution and Global Business.
Some of the macro environment factors that can be used to understand the China Construction America (A): The Road Ahead casestudy better are - – digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, increasing government debt because of Covid-19 spendings, increasing commodity prices, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, technology disruption,
geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of China Construction America (A): The Road Ahead
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in China Construction America (A): The Road Ahead case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Construction Owned, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Construction Owned 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 Construction America (A): The Road Ahead can be done for the following purposes –
1. Strategic planning using facts provided in China Construction America (A): The Road Ahead case study
2. Improving business portfolio management of Construction Owned
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 Construction Owned
Strengths China Construction America (A): The Road Ahead | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Construction Owned in China Construction America (A): The Road Ahead Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Construction Owned 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.
Low bargaining power of suppliers
– Suppliers of Construction Owned in the sector have low bargaining power. China Construction America (A): The Road Ahead has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Construction Owned to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Construction Owned 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 China Construction America (A): The Road Ahead HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Construction Owned
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Construction Owned does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Construction Owned 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 China Construction America (A): The Road Ahead - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Construction Owned in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Construction Owned 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
– Construction Owned is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the China Construction America (A): The Road Ahead 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.
Learning organization
- Construction Owned 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 Construction Owned is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in China Construction America (A): The Road Ahead Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Construction Owned digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Construction Owned 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
– China Construction America (A): The Road Ahead firm has clearly differentiated products in the market place. This has enabled Construction Owned to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Construction Owned to invest into research and development (R&D) and innovation.
Weaknesses China Construction America (A): The Road Ahead | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of China Construction America (A): The Road Ahead are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Construction Owned is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study China Construction America (A): The Road Ahead can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study China Construction America (A): The Road Ahead 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 Construction Owned 's lucrative customers.
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 Construction Owned supply chain. Even after few cautionary changes mentioned in the HBR case study - China Construction America (A): The Road Ahead, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Construction Owned vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Construction Owned is dominated by functional specialists. It is not different from other players in the Global Business segment. Construction Owned needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Construction Owned to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As China Construction America (A): The Road Ahead HBR case study mentions - Construction Owned takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Products dominated business model
– Even though Construction Owned 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 Construction America (A): The Road Ahead should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners
– Because of the regulatory requirements, Regina Abrami, Weiqi Zhang suggests that, Construction Owned 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.
High cash cycle compare to competitors
Construction Owned 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.
Slow decision making process
– As mentioned earlier in the report, Construction Owned has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Construction Owned even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Interest costs
– Compare to the competition, Construction Owned has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study China Construction America (A): The Road Ahead, is just above the industry average. Construction Owned 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.
Opportunities China Construction America (A): The Road Ahead | 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 Construction America (A): The Road Ahead are -
Loyalty marketing
– Construction Owned 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Construction Owned is facing challenges because of the dominance of functional experts in the organization. China Construction America (A): The Road Ahead 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.
Developing new processes and practices
– Construction Owned 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.
Creating value in data economy
– The success of analytics program of Construction Owned has opened avenues for new revenue streams for the organization in the industry. This can help Construction Owned to build a more holistic ecosystem as suggested in the China Construction America (A): The Road Ahead case study. Construction Owned 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 Construction Owned in the consumer business. Now Construction Owned can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Construction Owned to increase its market reach. Construction Owned 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 Construction Owned 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 Construction Owned to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Construction Owned can use these opportunities to build new business models that can help the communities that Construction Owned operates in. Secondly it can use opportunities from government spending in Global Business sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Construction Owned in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
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 Construction Owned 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Construction Owned can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Construction Owned 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.
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. Construction Owned can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats China Construction America (A): The Road Ahead External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study China Construction America (A): The Road Ahead are -
Environmental challenges
– Construction Owned 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. Construction Owned 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 Construction Owned business can come under increasing regulations regarding data privacy, data security, etc.
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. Construction Owned 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.
Increasing wage structure of Construction Owned
– 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 Construction Owned.
Technology acceleration in Forth Industrial Revolution
– Construction Owned has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Construction Owned needs to keep up with the evolution of technology in the Global Business sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Consumer confidence and its impact on Construction Owned 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Construction Owned with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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 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. Construction Owned needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Regulatory challenges
– Construction Owned 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 Global Business industry regulations.
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 Construction America (A): The Road Ahead, Construction Owned 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Construction Owned 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 Construction America (A): The Road Ahead .
Weighted SWOT Analysis of China Construction America (A): The Road Ahead 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 Construction America (A): The Road Ahead 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 Construction America (A): The Road Ahead 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 Construction America (A): The Road Ahead 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 Construction America (A): The Road Ahead 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 Construction Owned needs to make to build a sustainable competitive advantage.
