Haier in India: Building Presence in a Mass Market Beyond China SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of Haier in India: Building Presence in a Mass Market Beyond China
For Chinese corporation Haier Inc, the biggest seller of major appliances in the world, entering India as an emerging market multinational is like having a double-edged sword. Its global presence gives it credibility to offer more sophisticated products that warrant a premium price, but Indian consumers have yet to develop the willingness to embrace its China-made, high-priced products. Seven years into its India business endeavours, sales remained sluggish and market share minimal. The company then undertook a swift change in pricing strategies and overhauled its marketing infrastructure to save its market. The case provides an overview of the situation and lends a discussion of marketing and localisation strategies of emerging market multinationals in India. It also gives insights into the challenges these multinational corporations face. The case also explores issues of product offerings, brand communication, pricing strategies, market capture and late-comer disadvantages. The comparison between Haier's behaviours in India and other markets also points to the level of localisation/globalisation the company adopts across markets.
Swot Analysis of "Haier in India: Building Presence in a Mass Market Beyond China" written by Nikhil Celly, Penny Lau includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Localisation India facing as an external strategic factors. Some of the topics covered in Haier in India: Building Presence in a Mass Market Beyond China case study are - Strategic Management Strategies, Customers, Emerging markets, Global strategy, Globalization, Growth strategy, Pricing and Global Business.
Some of the macro environment factors that can be used to understand the Haier in India: Building Presence in a Mass Market Beyond China casestudy better are - – cloud computing is disrupting traditional business models, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy,
wage bills are increasing, geopolitical disruptions, etc
Introduction to SWOT Analysis of Haier in India: Building Presence in a Mass Market Beyond China
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Haier in India: Building Presence in a Mass Market Beyond China case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Localisation India, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Localisation India 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 Haier in India: Building Presence in a Mass Market Beyond China can be done for the following purposes –
1. Strategic planning using facts provided in Haier in India: Building Presence in a Mass Market Beyond China case study
2. Improving business portfolio management of Localisation India
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 Localisation India
Strengths Haier in India: Building Presence in a Mass Market Beyond China | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Localisation India in Haier in India: Building Presence in a Mass Market Beyond China Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Haier in India: Building Presence in a Mass Market Beyond China 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.
Superior customer experience
– The customer experience strategy of Localisation India in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Localisation India is one of the most innovative firm in sector. Manager in Haier in India: Building Presence in a Mass Market Beyond China Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Global Business field
– Localisation India 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 Localisation India in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Localisation India has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Localisation India 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.
Training and development
– Localisation India has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Haier in India: Building Presence in a Mass Market Beyond China 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.
Highly skilled collaborators
– Localisation India 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 Haier in India: Building Presence in a Mass Market Beyond China HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Localisation India 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 Haier in India: Building Presence in a Mass Market Beyond China - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Localisation India 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.
Sustainable margins compare to other players in Global Business industry
– Haier in India: Building Presence in a Mass Market Beyond China firm has clearly differentiated products in the market place. This has enabled Localisation India to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Localisation India to invest into research and development (R&D) and innovation.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Localisation India digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Localisation India 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.
Organizational Resilience of Localisation India
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Localisation India does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Haier in India: Building Presence in a Mass Market Beyond China | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Haier in India: Building Presence in a Mass Market Beyond China are -
High cash cycle compare to competitors
Localisation India 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Nikhil Celly, Penny Lau suggests that, Localisation India 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.
Aligning sales with marketing
– It come across in the case study Haier in India: Building Presence in a Mass Market Beyond China 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 Haier in India: Building Presence in a Mass Market Beyond China can leverage the sales team experience to cultivate customer relationships as Localisation India is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Haier in India: Building Presence in a Mass Market Beyond China, it seems that the employees of Localisation India 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Haier in India: Building Presence in a Mass Market Beyond China 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 Localisation India 's lucrative customers.
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 Localisation India supply chain. Even after few cautionary changes mentioned in the HBR case study - Haier in India: Building Presence in a Mass Market Beyond China, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Localisation India vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Haier in India: Building Presence in a Mass Market Beyond China HBR case study mentions - Localisation India 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.
Interest costs
– Compare to the competition, Localisation India 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Haier in India: Building Presence in a Mass Market Beyond China, in the dynamic environment Localisation India has struggled to respond to the nimble upstart competition. Localisation India has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Localisation India has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow decision making process
– As mentioned earlier in the report, Localisation India 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. Localisation India 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 Haier in India: Building Presence in a Mass Market Beyond China | 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 Haier in India: Building Presence in a Mass Market Beyond China are -
Building a culture of innovation
– managers at Localisation India 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. Localisation India can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Localisation India is facing challenges because of the dominance of functional experts in the organization. Haier in India: Building Presence in a Mass Market Beyond China 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.
Better consumer reach
– The expansion of the 5G network will help Localisation India to increase its market reach. Localisation India 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.
Leveraging digital technologies
– Localisation India 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.
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. Localisation India can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Localisation India can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Haier in India: Building Presence in a Mass Market Beyond China 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.
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 Localisation India in the consumer business. Now Localisation India can target international markets with far fewer capital restrictions requirements than the existing system.
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. Localisation India 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. Localisation India 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.
Loyalty marketing
– Localisation India 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.
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 Localisation India 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.
Manufacturing automation
– Localisation India 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, Localisation India can use these opportunities to build new business models that can help the communities that Localisation India operates in. Secondly it can use opportunities from government spending in Global Business sector.
Threats Haier in India: Building Presence in a Mass Market Beyond China External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Haier in India: Building Presence in a Mass Market Beyond China are -
High dependence on third party suppliers
– Localisation India 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.
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. Localisation India 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Localisation India with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Localisation India
– 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 Localisation India.
Stagnating economy with rate increase
– Localisation India 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. Localisation India needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Localisation India 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.
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. Localisation India can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Localisation India 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 Localisation India.
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.
Environmental challenges
– Localisation India 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. Localisation India can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Regulatory challenges
– Localisation India 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.
Weighted SWOT Analysis of Haier in India: Building Presence in a Mass Market Beyond China 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 Haier in India: Building Presence in a Mass Market Beyond China 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 Haier in India: Building Presence in a Mass Market Beyond China 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 Haier in India: Building Presence in a Mass Market Beyond China 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 Haier in India: Building Presence in a Mass Market Beyond China 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 Localisation India needs to make to build a sustainable competitive advantage.