Bundy Asia Pacific: China Strategy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Bundy Asia Pacific: China Strategy
In early 1996, Phil Stephenson, the director of China for Bundy Asia Pacific (BAP), leaned back in front of his office window in Adelaide, Australia. He had been preoccupied with Bundy's business in China since his meeting that morning with BAP's CEO, Tony Martin. Martin had shown Phil the fax from Robin Thompson, the new marketing and product development director of Bundy International, BAP's U.K.-based parent company. Thompson had asked BAP about its strategy for the refrigeration business in China. Despite 10 years of experience in China, Bundy had not met its market goals. Whatever strategy was developed, it would be an important part of Bundy's proposed global refrigeration strategy. This is a rich case, with detailed discussion possible around issues including: 1) business (re)development strategy, 2) joint ventures versus wholly owned subsidiaries, 3) organizational structure, and 4) expatriate and local staffing.
Authors :: Paul W. Beamish, Jack Li, Nancy Wang, Steven Zuo
Swot Analysis of "Bundy Asia Pacific: China Strategy" written by Paul W. Beamish, Jack Li, Nancy Wang, Steven Zuo includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Bundy Bap facing as an external strategic factors. Some of the topics covered in Bundy Asia Pacific: China Strategy case study are - Strategic Management Strategies, International business, Joint ventures, Operations management, Organizational structure and Global Business.
Some of the macro environment factors that can be used to understand the Bundy Asia Pacific: China Strategy casestudy better are - – there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, geopolitical disruptions, cloud computing is disrupting traditional business models,
customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, etc
Introduction to SWOT Analysis of Bundy Asia Pacific: China Strategy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Bundy Asia Pacific: China Strategy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Bundy Bap, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Bundy Bap 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 Bundy Asia Pacific: China Strategy can be done for the following purposes –
1. Strategic planning using facts provided in Bundy Asia Pacific: China Strategy case study
2. Improving business portfolio management of Bundy Bap
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 Bundy Bap
Strengths Bundy Asia Pacific: China Strategy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Bundy Bap in Bundy Asia Pacific: China Strategy Harvard Business Review case study are -
Learning organization
- Bundy Bap 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 Bundy Bap is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Bundy Asia Pacific: China Strategy Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Bundy Bap has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Bundy Asia Pacific: China Strategy 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.
Ability to lead change in Global Business field
– Bundy Bap 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 Bundy Bap in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Bundy Bap has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Bundy Bap to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Bundy Bap has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Bundy Bap 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.
High switching costs
– The high switching costs that Bundy Bap 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.
Effective Research and Development (R&D)
– Bundy Bap has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Bundy Asia Pacific: China Strategy - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Bundy Bap is present in almost all the verticals within the industry. This has provided firm in Bundy Asia Pacific: China Strategy 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.
Superior customer experience
– The customer experience strategy of Bundy Bap in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Bundy Bap in the sector have low bargaining power. Bundy Asia Pacific: China Strategy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Bundy Bap to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Bundy Bap digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Bundy Bap 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
– Bundy Asia Pacific: China Strategy firm has clearly differentiated products in the market place. This has enabled Bundy Bap to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Bundy Bap to invest into research and development (R&D) and innovation.
Weaknesses Bundy Asia Pacific: China Strategy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Bundy Asia Pacific: China Strategy are -
Products dominated business model
– Even though Bundy Bap 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 - Bundy Asia Pacific: China Strategy should strive to include more intangible value offerings along with its core products and services.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Bundy Asia Pacific: China Strategy, in the dynamic environment Bundy Bap has struggled to respond to the nimble upstart competition. Bundy Bap has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Bundy Bap 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 bargaining power of channel partners
– Because of the regulatory requirements, Paul W. Beamish, Jack Li, Nancy Wang, Steven Zuo suggests that, Bundy Bap 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 Bundy Bap supply chain. Even after few cautionary changes mentioned in the HBR case study - Bundy Asia Pacific: China Strategy, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Bundy Bap vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Bundy Bap is dominated by functional specialists. It is not different from other players in the Global Business segment. Bundy Bap needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Bundy Bap to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Bundy Asia Pacific: China Strategy 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 Bundy Asia Pacific: China Strategy can leverage the sales team experience to cultivate customer relationships as Bundy Bap is planning to shift buying processes online.
Lack of clear differentiation of Bundy Bap products
– To increase the profitability and margins on the products, Bundy Bap needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As Bundy Asia Pacific: China Strategy HBR case study mentions - Bundy Bap 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Bundy Asia Pacific: China Strategy, it seems that the employees of Bundy Bap 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.
Low market penetration in new markets
– Outside its home market of Bundy Bap, firm in the HBR case study Bundy Asia Pacific: China Strategy needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Bundy Asia Pacific: China Strategy | 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 Bundy Asia Pacific: China Strategy are -
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. Bundy Bap can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Bundy Bap has opened avenues for new revenue streams for the organization in the industry. This can help Bundy Bap to build a more holistic ecosystem as suggested in the Bundy Asia Pacific: China Strategy case study. Bundy Bap can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Bundy Bap 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Bundy Bap 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, Bundy Asia Pacific: China Strategy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Bundy Bap 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 Bundy Asia Pacific: China Strategy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Bundy Bap to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Bundy Bap can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Bundy Bap can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Bundy Bap 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 Bundy Bap to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Bundy Bap 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.
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 Bundy Bap in the consumer business. Now Bundy Bap can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Bundy Bap 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Bundy Bap is facing challenges because of the dominance of functional experts in the organization. Bundy Asia Pacific: China Strategy 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.
Loyalty marketing
– Bundy Bap 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.
Threats Bundy Asia Pacific: China Strategy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Bundy Asia Pacific: China Strategy 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 Bundy Bap business can come under increasing regulations regarding data privacy, data security, 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. Bundy Bap can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Bundy Bap
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Bundy Bap.
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 Bundy Bap.
Environmental challenges
– Bundy Bap 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. Bundy Bap 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.
Technology acceleration in Forth Industrial Revolution
– Bundy Bap has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Bundy Bap 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Bundy Bap with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Bundy Bap 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.
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. Bundy Bap needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Regulatory challenges
– Bundy Bap 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.
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. Bundy Bap 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Bundy Bap 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.
Weighted SWOT Analysis of Bundy Asia Pacific: China Strategy 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 Bundy Asia Pacific: China Strategy 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 Bundy Asia Pacific: China Strategy 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 Bundy Asia Pacific: China Strategy 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 Bundy Asia Pacific: China Strategy 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 Bundy Bap needs to make to build a sustainable competitive advantage.