China's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of China's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing
Since the opening up of its economy in 1979, China has followed an export-led growth policy and transformed the country into a 'Factory of the World' with its labour-intensive manufacturing. Since then, many factories were set up and concentrated mostly in the south-eastern coastal provinces. Although this policy resulted in consistently high annual growth and creation rates, negative side effects such as environmental, economic and social problems became increasingly evident. To address these challenges, in 2012, China's policymakers changed the policy direction to focus more on domestic consumption-led growth. One strategy to achieve the goal was to expand its manufacturing base into the hinterland. To attract investors to move to the inner regions, the government developed gigantic industrial parks and basic infrastructure to accommodate the new policy. This case depicts Xi Yong Micro-electronics Industrial Park in Chongqing, the largest municipality in Western China. It discusses the implementation of the government's development strategy at Xi Yong and presents an opportunity to examine whether Xi Yong and other similar industrial parks would provide the solution that the government is looking for.
Authors :: Siriwan Chutikamoltham, Feng Wang, Xiaoxiao Liu
Swot Analysis of "China's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing" written by Siriwan Chutikamoltham, Feng Wang, Xiaoxiao Liu includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Xi Yong facing as an external strategic factors. Some of the topics covered in China's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing case study are - Strategic Management Strategies, Government, Labor, Risk management and Global Business.
Some of the macro environment factors that can be used to understand the China's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing casestudy better are - – increasing household debt because of falling income levels, geopolitical disruptions, increasing government debt because of Covid-19 spendings, there is backlash against globalization, increasing commodity prices, central banks are concerned over increasing inflation, increasing transportation and logistics costs,
technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of China's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in China's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Xi Yong, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Xi Yong 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's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing can be done for the following purposes –
1. Strategic planning using facts provided in China's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing case study
2. Improving business portfolio management of Xi Yong
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 Xi Yong
Strengths China's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Xi Yong in China's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the China's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing 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.
Effective Research and Development (R&D)
– Xi Yong 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 China's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High switching costs
– The high switching costs that Xi Yong 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.
Superior customer experience
– The customer experience strategy of Xi Yong 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 Xi Yong in the sector have low bargaining power. China's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Xi Yong to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Xi Yong 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 Xi Yong is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in China's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Xi Yong 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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Xi Yong digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Xi Yong 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.
Innovation driven organization
– Xi Yong is one of the most innovative firm in sector. Manager in China's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing 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
– Xi Yong has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in China's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing 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.
Analytics focus
– Xi Yong is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Siriwan Chutikamoltham, Feng Wang, Xiaoxiao Liu can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Ability to recruit top talent
– Xi Yong is one of the leading recruiters in the industry. Managers in the China's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses China's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of China's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing are -
Increasing silos among functional specialists
– The organizational structure of Xi Yong is dominated by functional specialists. It is not different from other players in the Global Business segment. Xi Yong needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Xi Yong to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study China's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing, is just above the industry average. Xi Yong 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.
No frontier risks strategy
– After analyzing the HBR case study China's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing, 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Xi Yong is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study China's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, Xi Yong 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. Xi Yong 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Siriwan Chutikamoltham, Feng Wang, Xiaoxiao Liu suggests that, Xi Yong 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 operating costs
– Compare to the competitors, firm in the HBR case study China's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Xi Yong 's lucrative customers.
High cash cycle compare to competitors
Xi Yong 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.
Interest costs
– Compare to the competition, Xi Yong 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.
Products dominated business model
– Even though Xi Yong 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's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing should strive to include more intangible value offerings along with its core products and services.
Skills based hiring
– The stress on hiring functional specialists at Xi Yong 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.
Opportunities China's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing | 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's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing are -
Using analytics as competitive advantage
– Xi Yong 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's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Xi Yong to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Xi Yong 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.
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 Xi Yong in the consumer business. Now Xi Yong can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Xi Yong 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Xi Yong 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's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Xi Yong 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Xi Yong 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
– Xi Yong 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.
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. Xi Yong can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Xi Yong 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Xi Yong can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Xi Yong has opened avenues for new revenue streams for the organization in the industry. This can help Xi Yong to build a more holistic ecosystem as suggested in the China's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing case study. Xi Yong can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Xi Yong can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Xi Yong can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Threats China's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study China's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing are -
High dependence on third party suppliers
– Xi Yong 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.
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 Xi Yong business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Xi Yong 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.
Stagnating economy with rate increase
– Xi Yong 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.
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. Xi Yong can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Xi Yong 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.
Environmental challenges
– Xi Yong 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. Xi Yong 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, Xi Yong 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's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing .
Shortening product life cycle
– it is one of the major threat that Xi Yong is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Xi Yong 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 wage structure of Xi Yong
– 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 Xi Yong.
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 Xi Yong in the Global Business sector and impact the bottomline of the organization.
Weighted SWOT Analysis of China's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing 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's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing 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's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing 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's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing 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's Journey to the West: Xi Yong Micro-electronics Industrial Park, Chongqing 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 Xi Yong needs to make to build a sustainable competitive advantage.
