Shui On: Branding Properties for Sustainable Growth in China SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Shui On: Branding Properties for Sustainable Growth in China
Shui On Group, a Hong Kong based real estate company with extensive investments in China, leveraged its established relationship with the Shanghai government to obtain the rights to participate in a very large urban redevelopment project in the Shanghai metropolitan area, Taipingqiao, and built the now world-famous Xintiandi retail and entertainment centre. The combination of historic preservation and creative modern design, coupled with fastidious attention to detail in execution, turned Xintiandi into one of Shanghai's hottest dining and entertainment spots. Regardless of the success of its signature development in Shanghai, there is still uncertainty whether Shui On can repeat its success in other Chinese cities and exploit the brand value of Xintiandi which was created to drive growth for the company in the future.
Swot Analysis of "Shui On: Branding Properties for Sustainable Growth in China" written by Emily Ho, Frederik Pretorius includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Shui Xintiandi facing as an external strategic factors. Some of the topics covered in Shui On: Branding Properties for Sustainable Growth in China case study are - Strategic Management Strategies, Competitive strategy, Leadership, Policy and Global Business.
Some of the macro environment factors that can be used to understand the Shui On: Branding Properties for Sustainable Growth in China casestudy better are - – digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, there is backlash against globalization, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Shui On: Branding Properties for Sustainable Growth in China
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Shui On: Branding Properties for Sustainable Growth in China case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shui Xintiandi, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shui Xintiandi 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 Shui On: Branding Properties for Sustainable Growth in China can be done for the following purposes –
1. Strategic planning using facts provided in Shui On: Branding Properties for Sustainable Growth in China case study
2. Improving business portfolio management of Shui Xintiandi
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 Shui Xintiandi
Strengths Shui On: Branding Properties for Sustainable Growth in China | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shui Xintiandi in Shui On: Branding Properties for Sustainable Growth in China Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Shui Xintiandi in the sector have low bargaining power. Shui On: Branding Properties for Sustainable Growth in China has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shui Xintiandi to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Shui Xintiandi 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 Shui On: Branding Properties for Sustainable Growth in China HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Shui Xintiandi 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.
Successful track record of launching new products
– Shui Xintiandi has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Shui Xintiandi 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 Shui Xintiandi 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.
Superior customer experience
– The customer experience strategy of Shui Xintiandi in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Shui Xintiandi 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 Shui On: Branding Properties for Sustainable Growth in China - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Shui Xintiandi has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Shui On: Branding Properties for Sustainable Growth in China 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
– Shui On: Branding Properties for Sustainable Growth in China firm has clearly differentiated products in the market place. This has enabled Shui Xintiandi to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Shui Xintiandi to invest into research and development (R&D) and innovation.
Analytics focus
– Shui Xintiandi 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 Emily Ho, Frederik Pretorius 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.
Learning organization
- Shui Xintiandi 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 Shui Xintiandi is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Shui On: Branding Properties for Sustainable Growth in China Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Shui Xintiandi
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Shui Xintiandi does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Shui On: Branding Properties for Sustainable Growth in China | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shui On: Branding Properties for Sustainable Growth in China are -
Low market penetration in new markets
– Outside its home market of Shui Xintiandi, firm in the HBR case study Shui On: Branding Properties for Sustainable Growth in China needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Shui On: Branding Properties for Sustainable Growth in China 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 Shui On: Branding Properties for Sustainable Growth in China can leverage the sales team experience to cultivate customer relationships as Shui Xintiandi is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Shui On: Branding Properties for Sustainable Growth in China 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 Shui Xintiandi 's lucrative customers.
Products dominated business model
– Even though Shui Xintiandi 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 - Shui On: Branding Properties for Sustainable Growth in China should strive to include more intangible value offerings along with its core products and services.
Skills based hiring
– The stress on hiring functional specialists at Shui Xintiandi has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Shui On: Branding Properties for Sustainable Growth in China, it seems that the employees of Shui Xintiandi 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.
Slow decision making process
– As mentioned earlier in the report, Shui Xintiandi 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. Shui Xintiandi 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.
High cash cycle compare to competitors
Shui Xintiandi 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.
Need for greater diversity
– Shui Xintiandi 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.
Lack of clear differentiation of Shui Xintiandi products
– To increase the profitability and margins on the products, Shui Xintiandi needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Shui Xintiandi 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.
Opportunities Shui On: Branding Properties for Sustainable Growth in China | 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 Shui On: Branding Properties for Sustainable Growth in China are -
Creating value in data economy
– The success of analytics program of Shui Xintiandi has opened avenues for new revenue streams for the organization in the industry. This can help Shui Xintiandi to build a more holistic ecosystem as suggested in the Shui On: Branding Properties for Sustainable Growth in China case study. Shui Xintiandi 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 Shui Xintiandi 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.
Developing new processes and practices
– Shui Xintiandi 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.
Learning at scale
– Online learning technologies has now opened space for Shui Xintiandi 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Shui Xintiandi is facing challenges because of the dominance of functional experts in the organization. Shui On: Branding Properties for Sustainable Growth in China 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.
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 Shui Xintiandi in the consumer business. Now Shui Xintiandi can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Shui Xintiandi can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Shui Xintiandi 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Shui Xintiandi 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 Shui Xintiandi 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.
Better consumer reach
– The expansion of the 5G network will help Shui Xintiandi to increase its market reach. Shui Xintiandi 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.
Leveraging digital technologies
– Shui Xintiandi 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.
Using analytics as competitive advantage
– Shui Xintiandi 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 Shui On: Branding Properties for Sustainable Growth in China - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shui Xintiandi to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Shui On: Branding Properties for Sustainable Growth in China External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Shui On: Branding Properties for Sustainable Growth in China are -
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. Shui Xintiandi can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Shui Xintiandi 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 Shui On: Branding Properties for Sustainable Growth in China .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Shui Xintiandi in the Global Business industry. The Global Business industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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. Shui Xintiandi 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Shui Xintiandi with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Shui Xintiandi has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Shui Xintiandi 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.
Stagnating economy with rate increase
– Shui Xintiandi 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.
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 Shui Xintiandi business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Shui Xintiandi
– 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 Shui Xintiandi.
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.
Consumer confidence and its impact on Shui Xintiandi 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.
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 Shui Xintiandi in the Global Business sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Shui On: Branding Properties for Sustainable Growth in China 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 Shui On: Branding Properties for Sustainable Growth in China 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 Shui On: Branding Properties for Sustainable Growth in China 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 Shui On: Branding Properties for Sustainable Growth in China 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 Shui On: Branding Properties for Sustainable Growth in China 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 Shui Xintiandi needs to make to build a sustainable competitive advantage.
