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, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, increasing energy prices, increasing transportation and logistics costs, increasing commodity prices, wage bills are increasing,
increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, 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 -
Successful track record of launching new products
– Yushan Bicycles has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Yushan Bicycles 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.
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.
Training and development
– Yushan Bicycles has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Yushan Bicycles: Learning to Ride Abroad 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.
Organizational Resilience of Yushan Bicycles
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Yushan Bicycles does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
Cross disciplinary teams
– Horizontal connected teams at the Yushan Bicycles 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.
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.
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.
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.
Strong track record of project management
– Yushan Bicycles is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
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 -
Low market penetration in new markets
– Outside its home market of Yushan Bicycles, firm in the HBR case study Yushan Bicycles: Learning to Ride Abroad needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
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.
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.
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.
Skills based hiring
– The stress on hiring functional specialists at Yushan Bicycles 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 Yushan Bicycles: Learning to Ride Abroad, it seems that the employees of Yushan Bicycles 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 to strategic competitive environment developments
– As Yushan Bicycles: Learning to Ride Abroad HBR case study mentions - Yushan Bicycles 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.
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.
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.
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 -
Developing new processes and practices
– Yushan Bicycles 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. Yushan Bicycles can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
Better consumer reach
– The expansion of the 5G network will help Yushan Bicycles to increase its market reach. Yushan Bicycles 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.
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.
Leveraging digital technologies
– Yushan Bicycles 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.
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.
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.
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Yushan Bicycles is facing challenges because of the dominance of functional experts in the organization. Yushan Bicycles: Learning to Ride Abroad 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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Yushan Bicycles can use these opportunities to build new business models that can help the communities that Yushan Bicycles operates in. Secondly it can use opportunities from government spending in Global Business sector.
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 -
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.
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.
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.
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.
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 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Yushan Bicycles 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. Yushan Bicycles 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.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Yushan Bicycles needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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.
Shortening product life cycle
– it is one of the major threat that Yushan Bicycles is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
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.
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.