Case Study Description of Supply Chain Strategy at TCL Multimedia
The chief executive officer of TCL Multimedia, a global TV manufacturer based in China, looked at the company's first-half financial results with some concern. The results did not meet his expectations, and the company had lost market shares, both in China and internationally. Although he was confident that the new, recently adopted corporate strategy would enable a better future positioning of the company, he knew that without the appropriate supply chain design, the effectiveness of the new corporate strategy could suffer.
Swot Analysis of "Supply Chain Strategy at TCL Multimedia" written by Yinan Qi, Stephan Vachon includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tcl Multimedia facing as an external strategic factors. Some of the topics covered in Supply Chain Strategy at TCL Multimedia case study are - Strategic Management Strategies, and Global Business.
Some of the macro environment factors that can be used to understand the Supply Chain Strategy at TCL Multimedia casestudy better are - – wage bills are increasing, central banks are concerned over increasing inflation, geopolitical disruptions, increasing household debt because of falling income levels, there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs,
increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Supply Chain Strategy at TCL Multimedia
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Supply Chain Strategy at TCL Multimedia case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tcl Multimedia, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tcl Multimedia 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 Supply Chain Strategy at TCL Multimedia can be done for the following purposes –
1. Strategic planning using facts provided in Supply Chain Strategy at TCL Multimedia case study
2. Improving business portfolio management of Tcl Multimedia
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 Tcl Multimedia
Strengths Supply Chain Strategy at TCL Multimedia | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tcl Multimedia in Supply Chain Strategy at TCL Multimedia Harvard Business Review case study are -
Ability to recruit top talent
– Tcl Multimedia is one of the leading recruiters in the industry. Managers in the Supply Chain Strategy at TCL Multimedia are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Global Business field
– Tcl Multimedia 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 Tcl Multimedia in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Global Business industry
– Supply Chain Strategy at TCL Multimedia firm has clearly differentiated products in the market place. This has enabled Tcl Multimedia to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Tcl Multimedia to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Tcl Multimedia 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.
Training and development
– Tcl Multimedia has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Supply Chain Strategy at TCL Multimedia 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.
Effective Research and Development (R&D)
– Tcl Multimedia 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 Supply Chain Strategy at TCL Multimedia - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Tcl Multimedia has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Tcl Multimedia to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Tcl Multimedia in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Tcl Multimedia is one of the most innovative firm in sector. Manager in Supply Chain Strategy at TCL Multimedia Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Tcl Multimedia digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Tcl Multimedia 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.
Strong track record of project management
– Tcl Multimedia 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 Tcl Multimedia in the sector have low bargaining power. Supply Chain Strategy at TCL Multimedia has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tcl Multimedia to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Supply Chain Strategy at TCL Multimedia | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Supply Chain Strategy at TCL Multimedia are -
Interest costs
– Compare to the competition, Tcl Multimedia 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Supply Chain Strategy at TCL Multimedia, in the dynamic environment Tcl Multimedia has struggled to respond to the nimble upstart competition. Tcl Multimedia has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the segment, Tcl Multimedia 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.
Skills based hiring
– The stress on hiring functional specialists at Tcl Multimedia 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Supply Chain Strategy at TCL Multimedia, is just above the industry average. Tcl Multimedia 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.
Slow decision making process
– As mentioned earlier in the report, Tcl Multimedia 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. Tcl Multimedia 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 operating costs
– Compare to the competitors, firm in the HBR case study Supply Chain Strategy at TCL Multimedia 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 Tcl Multimedia 's lucrative customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Supply Chain Strategy at TCL Multimedia, it seems that the employees of Tcl Multimedia 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.
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 Tcl Multimedia supply chain. Even after few cautionary changes mentioned in the HBR case study - Supply Chain Strategy at TCL Multimedia, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Tcl Multimedia vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Tcl Multimedia 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.
Slow to strategic competitive environment developments
– As Supply Chain Strategy at TCL Multimedia HBR case study mentions - Tcl Multimedia 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 Supply Chain Strategy at TCL Multimedia | 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 Supply Chain Strategy at TCL Multimedia are -
Building a culture of innovation
– managers at Tcl Multimedia 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Tcl Multimedia can use these opportunities to build new business models that can help the communities that Tcl Multimedia operates in. Secondly it can use opportunities from government spending in Global Business sector.
Using analytics as competitive advantage
– Tcl Multimedia 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 Supply Chain Strategy at TCL Multimedia - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Tcl Multimedia to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Tcl Multimedia 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.
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. Tcl Multimedia 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. Tcl Multimedia 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.
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 Tcl Multimedia in the consumer business. Now Tcl Multimedia 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 Tcl Multimedia 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 Tcl Multimedia to hire the very best people irrespective of their geographical location.
Buying journey improvements
– Tcl Multimedia can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Supply Chain Strategy at TCL Multimedia 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.
Leveraging digital technologies
– Tcl Multimedia 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.
Loyalty marketing
– Tcl Multimedia 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.
Manufacturing automation
– Tcl Multimedia 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.
Developing new processes and practices
– Tcl Multimedia 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Tcl Multimedia can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Supply Chain Strategy at TCL Multimedia External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Supply Chain Strategy at TCL Multimedia are -
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, Tcl Multimedia 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 Supply Chain Strategy at TCL Multimedia .
Increasing wage structure of Tcl Multimedia
– 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 Tcl Multimedia.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Tcl Multimedia 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.
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 Tcl Multimedia in the Global Business sector and impact the bottomline of the organization.
Regulatory challenges
– Tcl Multimedia 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Tcl Multimedia with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Tcl Multimedia business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Tcl Multimedia is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Tcl Multimedia 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.
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
– Tcl Multimedia 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. Tcl Multimedia can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Stagnating economy with rate increase
– Tcl Multimedia 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 Supply Chain Strategy at TCL Multimedia 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 Supply Chain Strategy at TCL Multimedia 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 Supply Chain Strategy at TCL Multimedia 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 Supply Chain Strategy at TCL Multimedia 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 Supply Chain Strategy at TCL Multimedia 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 Tcl Multimedia needs to make to build a sustainable competitive advantage.