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 - – geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, talent flight as more people leaving formal jobs, increasing transportation and logistics costs,
there is backlash against globalization, increasing government debt because of Covid-19 spendings, 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 -
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.
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.
Learning organization
- Yili Dairy 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 Yili Dairy is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
Effective Research and Development (R&D)
– Yili Dairy 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 Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in Global Business field
– Yili Dairy 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 Yili Dairy in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
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.
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.
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.
Innovation driven organization
– Yili Dairy is one of the most innovative firm in sector. Manager in Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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 -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Yili Dairy is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version 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 Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version 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 Yili Dairy 's lucrative customers.
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.
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.
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.
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.
Aligning sales with marketing
– It come across in the case study Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version 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 Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version can leverage the sales team experience to cultivate customer relationships as Yili Dairy is planning to shift buying processes online.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version 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 Yili Dairy has relatively successful track record of launching new products.
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.
Interest costs
– Compare to the competition, Yili Dairy 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.
Slow to strategic competitive environment developments
– As Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version HBR case study mentions - Yili Dairy 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.
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 -
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.
Building a culture of innovation
– managers at Yili Dairy 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 Yili Dairy has opened avenues for new revenue streams for the organization in the industry. This can help Yili Dairy to build a more holistic ecosystem as suggested in the Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version case study. Yili Dairy can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Yili Dairy 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 Yili Dairy to hire the very best people irrespective of their geographical location.
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.
Leveraging digital technologies
– Yili Dairy 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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Yili Dairy can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Inner Mongolia Yili Group: China's Pioneering Dairy Brand, Chinese Version, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Yili Dairy can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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 -
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 .
Technology acceleration in Forth Industrial Revolution
– Yili Dairy has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Yili Dairy 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.
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.
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.
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.
Consumer confidence and its impact on Yili Dairy 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.
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 .
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 Yili Dairy in the Global Business sector and impact the bottomline of the organization.
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.
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.
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.
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.
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.