Case Study Description of Yushan Bicycles: Learning to Ride Abroad
Yushan Bicycles, one of Taiwan's leading bicycle manufacturers, is pursuing an international expansion strategy by increasing demand for its range of traditional and electric bicycles and by shifting its product mix toward higher-margin models sold through specialty bicycle retail shops. However, the manager of its new Australian subsidiary has taken a different approach that focuses on selling lower-priced models through large sporting-goods retailers. The manager's strategy has yielded disappointing financial results so far, and he and company executives disagree on the cause and next steps. The Yushan case was specifically developed for international management and international business courses, but it can also be used in competitive strategy, corporate strategy, and general management programs. It is especially useful for analyzing situations in which issues of strategy, organization, and management converge.
Swot Analysis of "Yushan Bicycles: Learning to Ride Abroad" written by Christopher A. Bartlett, Paul S. Myers includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Yushan Bicycles facing as an external strategic factors. Some of the topics covered in Yushan Bicycles: Learning to Ride Abroad case study are - Strategic Management Strategies, Marketing, Pricing and Global Business.
Some of the macro environment factors that can be used to understand the Yushan Bicycles: Learning to Ride Abroad casestudy better are - – digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, increasing energy prices, increasing transportation and logistics costs, technology disruption, competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices,
there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Yushan Bicycles: Learning to Ride Abroad
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Yushan Bicycles: Learning to Ride Abroad case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Yushan Bicycles, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Yushan Bicycles 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 Yushan Bicycles: Learning to Ride Abroad can be done for the following purposes –
1. Strategic planning using facts provided in Yushan Bicycles: Learning to Ride Abroad case study
2. Improving business portfolio management of Yushan Bicycles
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 Yushan Bicycles
Strengths Yushan Bicycles: Learning to Ride Abroad | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Yushan Bicycles in Yushan Bicycles: Learning to Ride Abroad Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Yushan Bicycles in the sector have low bargaining power. Yushan Bicycles: Learning to Ride Abroad has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Yushan Bicycles to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the Yushan Bicycles: Learning to Ride Abroad 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.
Ability to lead change in Global Business field
– Yushan Bicycles 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 Yushan Bicycles in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Yushan Bicycles has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Yushan Bicycles to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Yushan Bicycles in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Yushan Bicycles 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 Yushan Bicycles is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Yushan Bicycles: Learning to Ride Abroad Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Yushan Bicycles 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 Yushan Bicycles: Learning to Ride Abroad HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Yushan Bicycles is present in almost all the verticals within the industry. This has provided firm in Yushan Bicycles: Learning to Ride Abroad 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.
High switching costs
– The high switching costs that Yushan Bicycles 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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Yushan Bicycles digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Yushan Bicycles 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.
Sustainable margins compare to other players in Global Business industry
– Yushan Bicycles: Learning to Ride Abroad firm has clearly differentiated products in the market place. This has enabled Yushan Bicycles to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Yushan Bicycles to invest into research and development (R&D) and innovation.
Innovation driven organization
– Yushan Bicycles is one of the most innovative firm in sector. Manager in Yushan Bicycles: Learning to Ride Abroad Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Yushan Bicycles: Learning to Ride Abroad | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Yushan Bicycles: Learning to Ride Abroad are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Yushan Bicycles: Learning to Ride Abroad, is just above the industry average. Yushan Bicycles 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 cash cycle compare to competitors
Yushan Bicycles 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.
No frontier risks strategy
– After analyzing the HBR case study Yushan Bicycles: Learning to Ride Abroad, 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Christopher A. Bartlett, Paul S. Myers suggests that, Yushan Bicycles 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.
Need for greater diversity
– Yushan Bicycles 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 Yushan Bicycles products
– To increase the profitability and margins on the products, Yushan Bicycles needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Yushan Bicycles: Learning to Ride Abroad 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 Yushan Bicycles has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Yushan Bicycles 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. Yushan Bicycles 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Yushan Bicycles is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Yushan Bicycles: Learning to Ride Abroad can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Interest costs
– Compare to the competition, Yushan Bicycles 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Yushan Bicycles: Learning to Ride Abroad 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 Yushan Bicycles 's lucrative customers.
Opportunities Yushan Bicycles: Learning to Ride Abroad | 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 Yushan Bicycles: Learning to Ride Abroad are -
Buying journey improvements
– Yushan Bicycles can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Yushan Bicycles: Learning to Ride Abroad 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.
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 Yushan Bicycles in the consumer business. Now Yushan Bicycles can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Yushan Bicycles 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Yushan Bicycles 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 Yushan Bicycles to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Yushan Bicycles has opened avenues for new revenue streams for the organization in the industry. This can help Yushan Bicycles to build a more holistic ecosystem as suggested in the Yushan Bicycles: Learning to Ride Abroad case study. Yushan Bicycles can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Yushan Bicycles 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.
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. Yushan Bicycles can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Yushan Bicycles 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.
Loyalty marketing
– Yushan Bicycles 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
– Yushan Bicycles 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.
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. Yushan Bicycles can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Yushan Bicycles 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.
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. Yushan Bicycles 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. Yushan Bicycles 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.
Threats Yushan Bicycles: Learning to Ride Abroad External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Yushan Bicycles: Learning to Ride Abroad are -
Stagnating economy with rate increase
– Yushan Bicycles 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.
Environmental challenges
– Yushan Bicycles 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. Yushan Bicycles can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Regulatory challenges
– Yushan Bicycles 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 Yushan Bicycles business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Yushan Bicycles: Learning to Ride Abroad, Yushan Bicycles may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Yushan Bicycles in the Global Business sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Yushan Bicycles with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Yushan Bicycles.
Technology acceleration in Forth Industrial Revolution
– Yushan Bicycles has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Yushan Bicycles 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.
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. Yushan Bicycles 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
– Yushan Bicycles 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.
Consumer confidence and its impact on Yushan Bicycles 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.
Weighted SWOT Analysis of Yushan Bicycles: Learning to Ride Abroad 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 Yushan Bicycles: Learning to Ride Abroad 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 Yushan Bicycles: Learning to Ride Abroad 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 Yushan Bicycles: Learning to Ride Abroad 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 Yushan Bicycles: Learning to Ride Abroad 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 Yushan Bicycles needs to make to build a sustainable competitive advantage.
