China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version

On July 21, 2005 China revalued its decade-long quasi-fixed exchange rate of approximately 8.28 yuan per U.S. dollar by 2.1% to 8.11% and, at the same time, introduced a more market-based exchange rate system. Many analysts and economists were disappointed with what they considered too small a change and called for more flexibility in the U.S. dollar-yuan exchange rate. Provides a timeline of further changes relevant to the Chinese renminbi.

Authors :: Laura Alfaro, Rafael Di Tella, Ingrid Vogel, Renee Kim

Topics :: Global Business

Tags :: Corporate governance, Currency, Economics, International business, Strategy, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version" written by Laura Alfaro, Rafael Di Tella, Ingrid Vogel, Renee Kim includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Renminbi Yuan facing as an external strategic factors. Some of the topics covered in China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version case study are - Strategic Management Strategies, Corporate governance, Currency, Economics, International business, Strategy and Global Business.

Some of the macro environment factors that can be used to understand the China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version casestudy better are - – increasing energy prices, geopolitical disruptions, talent flight as more people leaving formal jobs, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, etc

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Introduction to SWOT Analysis of China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Renminbi Yuan, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Renminbi Yuan 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version can be done for the following purposes –
1. Strategic planning using facts provided in China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version case study
2. Improving business portfolio management of Renminbi Yuan
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 Renminbi Yuan

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Strengths China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Renminbi Yuan in China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version Harvard Business Review case study are -

Low bargaining power of suppliers

– Suppliers of Renminbi Yuan in the sector have low bargaining power. China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Renminbi Yuan to manage not only supply disruptions but also source products at highly competitive prices.

Ability to recruit top talent

– Renminbi Yuan is one of the leading recruiters in the industry. Managers in the China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.

Successful track record of launching new products

– Renminbi Yuan has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Renminbi Yuan 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.

Diverse revenue streams

– Renminbi Yuan is present in almost all the verticals within the industry. This has provided firm in China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version 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.

Sustainable margins compare to other players in Global Business industry

– China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version firm has clearly differentiated products in the market place. This has enabled Renminbi Yuan to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Renminbi Yuan to invest into research and development (R&D) and innovation.

Ability to lead change in Global Business field

– Renminbi Yuan 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 Renminbi Yuan in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Cross disciplinary teams

– Horizontal connected teams at the Renminbi Yuan 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.

Innovation driven organization

– Renminbi Yuan is one of the most innovative firm in sector. Manager in China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.

Learning organization

- Renminbi Yuan 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 Renminbi Yuan is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

High switching costs

– The high switching costs that Renminbi Yuan 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.

Strong track record of project management

– Renminbi Yuan is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Superior customer experience

– The customer experience strategy of Renminbi Yuan in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

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Weaknesses China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version are -

Ability to respond to the competition

– As the decision making is very deliberative, highlighted in the case study China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version, in the dynamic environment Renminbi Yuan has struggled to respond to the nimble upstart competition. Renminbi Yuan has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Low market penetration in new markets

– Outside its home market of Renminbi Yuan, firm in the HBR case study China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Products dominated business model

– Even though Renminbi Yuan 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 - China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version should strive to include more intangible value offerings along with its core products and services.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Renminbi Yuan is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.

Compensation and incentives

– The revenue per employee as mentioned in the HBR case study China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version, is just above the industry average. Renminbi Yuan 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.

Aligning sales with marketing

– It come across in the case study China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version can leverage the sales team experience to cultivate customer relationships as Renminbi Yuan is planning to shift buying processes online.

High dependence on star products

– The top 2 products and services of the firm as mentioned in the China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version 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 Renminbi Yuan has relatively successful track record of launching new products.

High bargaining power of channel partners

– Because of the regulatory requirements, Laura Alfaro, Rafael Di Tella, Ingrid Vogel, Renee Kim suggests that, Renminbi Yuan 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.

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 Renminbi Yuan supply chain. Even after few cautionary changes mentioned in the HBR case study - China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Renminbi Yuan vulnerable to further global disruptions in South East Asia.

Increasing silos among functional specialists

– The organizational structure of Renminbi Yuan is dominated by functional specialists. It is not different from other players in the Global Business segment. Renminbi Yuan needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Renminbi Yuan to focus more on services rather than just following the product oriented approach.

Workers concerns about automation

– As automation is fast increasing in the segment, Renminbi Yuan 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.

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Opportunities China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version | 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 China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version are -

Learning at scale

– Online learning technologies has now opened space for Renminbi Yuan 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Renminbi Yuan can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.

Better consumer reach

– The expansion of the 5G network will help Renminbi Yuan to increase its market reach. Renminbi Yuan 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.

Using analytics as competitive advantage

– Renminbi Yuan 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 China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Renminbi Yuan to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Manufacturing automation

– Renminbi Yuan 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Renminbi Yuan 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, China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Building a culture of innovation

– managers at Renminbi Yuan 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.

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. Renminbi Yuan can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Renminbi Yuan 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 Renminbi Yuan 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 Renminbi Yuan in the consumer business. Now Renminbi Yuan 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 Renminbi Yuan 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

– Renminbi Yuan 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Renminbi Yuan can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

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Threats China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version are -

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 Renminbi Yuan business can come under increasing regulations regarding data privacy, data security, etc.

Shortening product life cycle

– it is one of the major threat that Renminbi Yuan is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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 Renminbi Yuan in the Global Business sector and impact the bottomline of the organization.

Consumer confidence and its impact on Renminbi Yuan 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.

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 Renminbi Yuan.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Renminbi Yuan 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.

Stagnating economy with rate increase

– Renminbi Yuan 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

– Renminbi Yuan 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. Renminbi Yuan can take advantage of this fund but it will also bring new competitors in the Global Business industry.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Renminbi Yuan 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 China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version .

Regulatory challenges

– Renminbi Yuan 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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version, Renminbi Yuan 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 .

Barriers of entry lowering

– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Renminbi Yuan with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.

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. Renminbi Yuan can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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Weighted SWOT Analysis of China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version 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 China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version 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 China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version 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 China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version 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 China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version 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 Renminbi Yuan needs to make to build a sustainable competitive advantage.

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