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Transformation of China's Steel Industry SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Transformation of China's Steel Industry


Despite its status as the world's largest steel producing country, China is one of the largest net steel importers in the world. In response to World Trade Organization challenges and the Chinese government's policy measures to promote mergers and acquisitions and rationalization, the big Chinese steel producers are undergoing major modernization and product mix upgrades to compete with high-quality imports and to meet the demand for high-quality steel products as China develops itself as the "world factory" for a wide range of manufacturing industries. Examines the forces that will help or hinder the transformation of China's steel industry from a volume producer to a quality producer.

Authors :: Xiaohong Wu, Michael J. Enright, Charlie Shoa, Charlie Shao

Topics :: Global Business

Tags :: Emerging markets, Globalization, Market research, Policy, Product development, Supply chain, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Transformation of China's Steel Industry" written by Xiaohong Wu, Michael J. Enright, Charlie Shoa, Charlie Shao includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Steel Quality facing as an external strategic factors. Some of the topics covered in Transformation of China's Steel Industry case study are - Strategic Management Strategies, Emerging markets, Globalization, Market research, Policy, Product development, Supply chain and Global Business.


Some of the macro environment factors that can be used to understand the Transformation of China's Steel Industry casestudy better are - – talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, wage bills are increasing, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, digital marketing is dominated by two big players Facebook and Google, etc



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Introduction to SWOT Analysis of Transformation of China's Steel Industry


SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Transformation of China's Steel Industry case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Steel Quality, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Steel Quality 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 Transformation of China's Steel Industry can be done for the following purposes –
1. Strategic planning using facts provided in Transformation of China's Steel Industry case study
2. Improving business portfolio management of Steel Quality
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 Steel Quality




Strengths Transformation of China's Steel Industry | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Steel Quality in Transformation of China's Steel Industry Harvard Business Review case study are -

Analytics focus

– Steel Quality 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 Xiaohong Wu, Michael J. Enright, Charlie Shoa, Charlie Shao 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.

Training and development

– Steel Quality has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Transformation of China's Steel 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.

Strong track record of project management

– Steel Quality 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

- Steel Quality 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 Steel Quality is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Transformation of China's Steel Industry Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Diverse revenue streams

– Steel Quality is present in almost all the verticals within the industry. This has provided firm in Transformation of China's Steel Industry 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.

Innovation driven organization

– Steel Quality is one of the most innovative firm in sector. Manager in Transformation of China's Steel Industry Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.

Cross disciplinary teams

– Horizontal connected teams at the Steel Quality 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.

Digital Transformation in Global Business segment

- digital transformation varies from industry to industry. For Steel Quality digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Steel Quality 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.

Highly skilled collaborators

– Steel Quality 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 Transformation of China's Steel Industry HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

Operational resilience

– The operational resilience strategy in the Transformation of China's Steel 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.

High brand equity

– Steel Quality has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Steel Quality to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Successful track record of launching new products

– Steel Quality has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Steel Quality 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.






Weaknesses Transformation of China's Steel Industry | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Transformation of China's Steel Industry are -

Lack of clear differentiation of Steel Quality products

– To increase the profitability and margins on the products, Steel Quality needs to provide more differentiated products than what it is currently offering in the marketplace.

Low market penetration in new markets

– Outside its home market of Steel Quality, firm in the HBR case study Transformation of China's Steel Industry needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

High bargaining power of channel partners

– Because of the regulatory requirements, Xiaohong Wu, Michael J. Enright, Charlie Shoa, Charlie Shao suggests that, Steel Quality 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 dependence on star products

– The top 2 products and services of the firm as mentioned in the Transformation of China's Steel 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 Steel Quality has relatively successful track record of launching new products.

Slow decision making process

– As mentioned earlier in the report, Steel Quality 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. Steel Quality 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.

Capital Spending Reduction

– Even during the low interest decade, Steel Quality 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.

Increasing silos among functional specialists

– The organizational structure of Steel Quality is dominated by functional specialists. It is not different from other players in the Global Business segment. Steel Quality needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Steel Quality to focus more on services rather than just following the product oriented approach.

Products dominated business model

– Even though Steel Quality 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 - Transformation of China's Steel Industry should strive to include more intangible value offerings along with its core products and services.

High cash cycle compare to competitors

Steel Quality 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.

Workers concerns about automation

– As automation is fast increasing in the segment, Steel Quality 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.

Ability to respond to the competition

– As the decision making is very deliberative, highlighted in the case study Transformation of China's Steel Industry, in the dynamic environment Steel Quality has struggled to respond to the nimble upstart competition. Steel Quality has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.




Opportunities Transformation of China's Steel 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 Transformation of China's Steel Industry are -

Manufacturing automation

– Steel Quality 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Steel Quality 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.

Building a culture of innovation

– managers at Steel Quality 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.

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 Steel Quality in the consumer business. Now Steel Quality can target international markets with far fewer capital restrictions requirements than the existing system.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Steel Quality 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 Steel Quality to hire the very best people irrespective of their geographical location.

Buying journey improvements

– Steel Quality can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Transformation of China's Steel 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Steel Quality 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Steel Quality can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Creating value in data economy

– The success of analytics program of Steel Quality has opened avenues for new revenue streams for the organization in the industry. This can help Steel Quality to build a more holistic ecosystem as suggested in the Transformation of China's Steel Industry case study. Steel Quality can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.

Changes in consumer behavior post Covid-19

– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Steel Quality can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Steel Quality can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.

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. Steel Quality can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Steel Quality 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, Transformation of China's Steel Industry, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Using analytics as competitive advantage

– Steel Quality 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 Transformation of China's Steel Industry - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Steel Quality to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.




Threats Transformation of China's Steel Industry External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The threats mentioned in the HBR case study Transformation of China's Steel Industry are -

Consumer confidence and its impact on Steel Quality 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.

Regulatory challenges

– Steel Quality 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.

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 Steel Quality business can come under increasing regulations regarding data privacy, data security, etc.

Environmental challenges

– Steel Quality 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. Steel Quality can take advantage of this fund but it will also bring new competitors in the Global Business industry.

Increasing wage structure of Steel Quality

– 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 Steel Quality.

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 Steel Quality.

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. Steel Quality 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, Steel Quality 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 Transformation of China's Steel Industry .

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.

Technology acceleration in Forth Industrial Revolution

– Steel Quality has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Steel Quality 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.

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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Transformation of China's Steel Industry, Steel Quality 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 .

Stagnating economy with rate increase

– Steel Quality can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.




Weighted SWOT Analysis of Transformation of China's Steel 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 Transformation of China's Steel 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 Transformation of China's Steel 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 Transformation of China's Steel 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 Transformation of China's Steel 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 Steel Quality needs to make to build a sustainable competitive advantage.



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