Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version
Setting up the goal to become one of the top 20 enterprises in the world dairy industry by 2010, the Inner Mongolia Yili Group had ambitious plans. As one of China's biggest national dairy companies, its main challenge was competing as a local company against joint venture rivals who benefited from perks granted to "foreign" companies. To set itself apart, Yili focused on research and development and innovative ways to improve the industry. Proving that it could shift industry standards and lead a country not accustomed to dairy consumption, to a point where demand is outpacing supply, the Yili Group is making its mark to go global. As an Official Sponsor of the 2008 Olympic Games in Beijing and the Official dairy supplier of the games, it is betting that the brand can go further beyond China. Will the day that tykes from Topeka have a bottle of Yili milk in their hands be coming soon?
Authors :: F. Warren McFarlan, Regina Abrami, William C. Kirby, Tracy Yuen Manty
Swot Analysis of "Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version" written by F. Warren McFarlan, Regina Abrami, William C. Kirby, Tracy Yuen Manty includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Yili Dairy facing as an external strategic factors. Some of the topics covered in Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version case study are - Strategic Management Strategies, Competition, Growth strategy, Marketing and Global Business.
Some of the macro environment factors that can be used to understand the Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version casestudy better are - – central banks are concerned over increasing inflation, increasing commodity prices, increasing government debt because of Covid-19 spendings, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs,
challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Yili Dairy, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Yili Dairy 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 Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version can be done for the following purposes –
1. Strategic planning using facts provided in Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version case study
2. Improving business portfolio management of Yili Dairy
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 Yili Dairy
Strengths Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Yili Dairy in Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version Harvard Business Review case study are -
Strong track record of project management
– Yili Dairy is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Yili Dairy is present in almost all the verticals within the industry. This has provided firm in Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version 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.
Training and development
– Yili Dairy has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version 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.
Analytics focus
– Yili Dairy 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 F. Warren McFarlan, Regina Abrami, William C. Kirby, Tracy Yuen Manty 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.
Superior customer experience
– The customer experience strategy of Yili Dairy in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Yili Dairy 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.
Ability to recruit top talent
– Yili Dairy is one of the leading recruiters in the industry. Managers in the Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Yili Dairy has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Yili Dairy 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 Yili Dairy 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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Yili Dairy digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Yili Dairy 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.
Organizational Resilience of Yili Dairy
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Yili Dairy does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Global Business industry
– Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version firm has clearly differentiated products in the market place. This has enabled Yili Dairy to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Yili Dairy to invest into research and development (R&D) and innovation.
Weaknesses Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version are -
Need for greater diversity
– Yili Dairy 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.
Increasing silos among functional specialists
– The organizational structure of Yili Dairy is dominated by functional specialists. It is not different from other players in the Global Business segment. Yili Dairy needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Yili Dairy to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version, in the dynamic environment Yili Dairy has struggled to respond to the nimble upstart competition. Yili Dairy has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Yili Dairy 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version, it seems that the employees of Yili Dairy 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version, is just above the industry average. Yili Dairy 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.
Lack of clear differentiation of Yili Dairy products
– To increase the profitability and margins on the products, Yili Dairy needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, F. Warren McFarlan, Regina Abrami, William C. Kirby, Tracy Yuen Manty suggests that, Yili Dairy 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 Yili Dairy 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 - Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of Yili Dairy, firm in the HBR case study Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the segment, Yili Dairy 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 Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version | 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 Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Yili Dairy can use these opportunities to build new business models that can help the communities that Yili Dairy operates in. Secondly it can use opportunities from government spending in Global Business sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Yili Dairy 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.
Loyalty marketing
– Yili Dairy 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.
Buying journey improvements
– Yili Dairy can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version 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.
Better consumer reach
– The expansion of the 5G network will help Yili Dairy to increase its market reach. Yili Dairy 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 Yili Dairy in the consumer business. Now Yili Dairy can target international markets with far fewer capital restrictions requirements than the existing system.
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. Yili Dairy can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Yili Dairy 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. Yili Dairy can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Yili Dairy is facing challenges because of the dominance of functional experts in the organization. Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Yili Dairy 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 Yili Dairy 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.
Manufacturing automation
– Yili Dairy 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.
Threats Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version are -
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 Yili Dairy 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. Yili Dairy needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Yili Dairy 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 Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version .
Regulatory challenges
– Yili Dairy 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.
Shortening product life cycle
– it is one of the major threat that Yili Dairy is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, 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. Yili Dairy 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.
High dependence on third party suppliers
– Yili Dairy 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.
Environmental challenges
– Yili Dairy 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. Yili Dairy can take advantage of this fund but it will also bring new competitors in the Global Business 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 Yili Dairy.
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. Yili Dairy 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.
Increasing wage structure of Yili Dairy
– 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 Yili Dairy.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version, Yili Dairy 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 .
Weighted SWOT Analysis of Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version 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 Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version 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 Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version 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 Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version 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 Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version 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 Yili Dairy needs to make to build a sustainable competitive advantage.
