A Tale of Two "Orientals": Lessons from Short Selling Attacks SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of A Tale of Two "Orientals": Lessons from Short Selling Attacks
The case focuses on the main issues faced by two US-listed Chinese companies - Orient Paper (NYSE MKT: ONP) and New Oriental Education and Technology Group (NYSE: EDU) - when they were attacked by Muddy Waters, LLC. Interestingly, the seemingly similar responses of the two "Orientals" resulted in widely disparate outcomes, offering lessons to emerging market firms eager to embrace the global capital markets. The case aims to help students understand the mechanism of short selling in the context of "bear" attacks, and expose the problems that attract short sellers' attention, as well as the actions companies can take to deal with them. It also explains the normative role that short selling plays in the market: to discipline corporate behaviour and improve market efficiency.
Swot Analysis of "A Tale of Two "Orientals": Lessons from Short Selling Attacks" written by Hong Zhang, Anne Yang, Xiaojia Guo includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Orientals Short facing as an external strategic factors. Some of the topics covered in A Tale of Two "Orientals": Lessons from Short Selling Attacks case study are - Strategic Management Strategies, Financial management, International business, IPO, Transparency and Global Business.
Some of the macro environment factors that can be used to understand the A Tale of Two "Orientals": Lessons from Short Selling Attacks casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, increasing government debt because of Covid-19 spendings, geopolitical disruptions, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy,
technology disruption, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of A Tale of Two "Orientals": Lessons from Short Selling Attacks
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in A Tale of Two "Orientals": Lessons from Short Selling Attacks case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Orientals Short, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Orientals Short 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 A Tale of Two "Orientals": Lessons from Short Selling Attacks can be done for the following purposes –
1. Strategic planning using facts provided in A Tale of Two "Orientals": Lessons from Short Selling Attacks case study
2. Improving business portfolio management of Orientals Short
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 Orientals Short
Strengths A Tale of Two "Orientals": Lessons from Short Selling Attacks | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Orientals Short in A Tale of Two "Orientals": Lessons from Short Selling Attacks Harvard Business Review case study are -
Strong track record of project management
– Orientals Short is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Orientals Short in the sector have low bargaining power. A Tale of Two "Orientals": Lessons from Short Selling Attacks has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Orientals Short to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Orientals Short is one of the leading recruiters in the industry. Managers in the A Tale of Two "Orientals": Lessons from Short Selling Attacks are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Orientals Short 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 A Tale of Two "Orientals": Lessons from Short Selling Attacks HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Orientals Short in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the A Tale of Two "Orientals": Lessons from Short Selling Attacks 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.
Training and development
– Orientals Short has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in A Tale of Two "Orientals": Lessons from Short Selling Attacks 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.
High switching costs
– The high switching costs that Orientals Short 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.
Analytics focus
– Orientals Short 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 Hong Zhang, Anne Yang, Xiaojia Guo 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
- Orientals Short 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 Orientals Short is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in A Tale of Two "Orientals": Lessons from Short Selling Attacks Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Orientals Short
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Orientals Short does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Orientals Short 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.
Weaknesses A Tale of Two "Orientals": Lessons from Short Selling Attacks | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of A Tale of Two "Orientals": Lessons from Short Selling Attacks are -
No frontier risks strategy
– After analyzing the HBR case study A Tale of Two "Orientals": Lessons from Short Selling Attacks, it seems that company is thinking about the frontier risks that can impact Global Business strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Need for greater diversity
– Orientals Short 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 Orientals Short is dominated by functional specialists. It is not different from other players in the Global Business segment. Orientals Short needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Orientals Short to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study A Tale of Two "Orientals": Lessons from Short Selling Attacks, is just above the industry average. Orientals Short 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the A Tale of Two "Orientals": Lessons from Short Selling Attacks 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 Orientals Short has relatively successful track record of launching new products.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Orientals Short supply chain. Even after few cautionary changes mentioned in the HBR case study - A Tale of Two "Orientals": Lessons from Short Selling Attacks, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Orientals Short vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Orientals Short is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study A Tale of Two "Orientals": Lessons from Short Selling Attacks can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study A Tale of Two "Orientals": Lessons from Short Selling Attacks, it seems that the employees of Orientals Short 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.
Skills based hiring
– The stress on hiring functional specialists at Orientals Short 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study A Tale of Two "Orientals": Lessons from Short Selling Attacks, in the dynamic environment Orientals Short has struggled to respond to the nimble upstart competition. Orientals Short has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Orientals Short 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 - A Tale of Two "Orientals": Lessons from Short Selling Attacks should strive to include more intangible value offerings along with its core products and services.
Opportunities A Tale of Two "Orientals": Lessons from Short Selling Attacks | 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 A Tale of Two "Orientals": Lessons from Short Selling Attacks are -
Developing new processes and practices
– Orientals Short 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.
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. Orientals Short can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Orientals Short 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 Orientals Short 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 Orientals Short in the consumer business. Now Orientals Short can target international markets with far fewer capital restrictions requirements than the existing system.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Orientals Short 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Orientals Short 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, A Tale of Two "Orientals": Lessons from Short Selling Attacks, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Orientals Short can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. A Tale of Two "Orientals": Lessons from Short Selling Attacks 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.
Manufacturing automation
– Orientals Short 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Orientals Short can use these opportunities to build new business models that can help the communities that Orientals Short operates in. Secondly it can use opportunities from government spending in Global Business sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Orientals Short is facing challenges because of the dominance of functional experts in the organization. A Tale of Two "Orientals": Lessons from Short Selling Attacks 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.
Using analytics as competitive advantage
– Orientals Short 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 A Tale of Two "Orientals": Lessons from Short Selling Attacks - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Orientals Short to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Orientals Short 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.
Leveraging digital technologies
– Orientals Short 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.
Threats A Tale of Two "Orientals": Lessons from Short Selling Attacks External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study A Tale of Two "Orientals": Lessons from Short Selling Attacks are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Orientals Short 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.
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 Orientals Short business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Orientals Short has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Orientals Short 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study A Tale of Two "Orientals": Lessons from Short Selling Attacks, Orientals Short may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Orientals Short 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 A Tale of Two "Orientals": Lessons from Short Selling Attacks .
Stagnating economy with rate increase
– Orientals Short 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.
Increasing wage structure of Orientals Short
– 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 Orientals Short.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Orientals Short with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Orientals Short is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Orientals Short 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.
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. Orientals Short can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Orientals Short 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
– Orientals Short 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. Orientals Short can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Weighted SWOT Analysis of A Tale of Two "Orientals": Lessons from Short Selling Attacks 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 A Tale of Two "Orientals": Lessons from Short Selling Attacks 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 A Tale of Two "Orientals": Lessons from Short Selling Attacks 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 A Tale of Two "Orientals": Lessons from Short Selling Attacks 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 A Tale of Two "Orientals": Lessons from Short Selling Attacks 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 Orientals Short needs to make to build a sustainable competitive advantage.