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
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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
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 - – technology disruption, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, increasing commodity prices, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google,
geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
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.
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
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 -
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.
Highly skilled collaborators
– Renminbi Yuan 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 China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Renminbi Yuan has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Renminbi Yuan to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Renminbi Yuan digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Renminbi Yuan 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.
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.
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.
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.
Operational resilience
– The operational resilience strategy in the China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version 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.
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.
Training and development
– Renminbi Yuan has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version 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.
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.
Slow to strategic competitive environment developments
– As China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version HBR case study mentions - Renminbi Yuan 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.
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.
Lack of clear differentiation of Renminbi Yuan products
– To increase the profitability and margins on the products, Renminbi Yuan needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
No frontier risks strategy
– After analyzing the HBR case study China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version, 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.
Skills based hiring
– The stress on hiring functional specialists at Renminbi Yuan 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.
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.
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 cash cycle compare to competitors
Renminbi Yuan 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 decision making process
– As mentioned earlier in the report, Renminbi Yuan 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. Renminbi Yuan 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.
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 -
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.
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 Renminbi Yuan 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.
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.
Leveraging digital technologies
– Renminbi Yuan 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.
Creating value in data economy
– The success of analytics program of Renminbi Yuan has opened avenues for new revenue streams for the organization in the industry. This can help Renminbi Yuan to build a more holistic ecosystem as suggested in the China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version case study. Renminbi Yuan can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
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. Renminbi Yuan can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Renminbi Yuan can use these opportunities to build new business models that can help the communities that Renminbi Yuan operates in. Secondly it can use opportunities from government spending in Global Business sector.
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.
Buying journey improvements
– Renminbi Yuan can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. China: To Float or Not to Float? (B): Timeline of Changes Relevant to the Chinese Renminbi, Spanish Version 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.
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 -
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.
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.
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 .
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.
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. Renminbi Yuan needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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.
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.
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.
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.
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.
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.
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.
High dependence on third party suppliers
– Renminbi Yuan 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.
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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