Wyoff and China-LuQuan: Negotiating a Joint Venture (B) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Wyoff and China-LuQuan: Negotiating a Joint Venture (B)
Through stalled joint venture talks between Pennsylvania-based Wyoff Corp. and Jinan-based China-LuQuan, strategic and cross-cultural negotiation challenges are explored both from American and Chinese perspectives. Wyoff, a leading US chemical company, has been seeking ways to secure the company's foothold in China's emerging market since the late 90s. When approached by China-LuQuan in 2000, a major Chinese state-owned chemical producer, for a joint-venture opportunity to make a popular chemical catalyst in China, Wyoff, leveraging its superior technology, demanded one-sided terms and played hardball, ruining both the deal and the relationship with China-LuQuan. Seven years later in 2007, Wyoff faced market pressure to again seek a joint venture with China-LuQuan on two other types of products. Both parties had to overcome past distrust to work things out on a series of strategic issues: investment, product slate, marketing, technology, management organization, staffing, etc. In the negotiations, cross-cultural themes (e.g., trust, relationships, communication, time, face, etc.) and different negotiation styles created challenges along with the business and strategic issues. The (A) case sets up the negotiations, highlights issue impasses, explores cross-cultural frictions, and poses tactical challenges. The (B) case describes the strategies, tactics, and results of these negotiations.
Swot Analysis of "Wyoff and China-LuQuan: Negotiating a Joint Venture (B)" written by James K. Sebenius, Cheng (Jason) Qian includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Luquan Wyoff facing as an external strategic factors. Some of the topics covered in Wyoff and China-LuQuan: Negotiating a Joint Venture (B) case study are - Strategic Management Strategies, Decision making, Joint ventures, Negotiations and Global Business.
Some of the macro environment factors that can be used to understand the Wyoff and China-LuQuan: Negotiating a Joint Venture (B) casestudy better are - – increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy,
technology disruption, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Wyoff and China-LuQuan: Negotiating a Joint Venture (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Wyoff and China-LuQuan: Negotiating a Joint Venture (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Luquan Wyoff, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Luquan Wyoff 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 Wyoff and China-LuQuan: Negotiating a Joint Venture (B) can be done for the following purposes –
1. Strategic planning using facts provided in Wyoff and China-LuQuan: Negotiating a Joint Venture (B) case study
2. Improving business portfolio management of Luquan Wyoff
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 Luquan Wyoff
Strengths Wyoff and China-LuQuan: Negotiating a Joint Venture (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Luquan Wyoff in Wyoff and China-LuQuan: Negotiating a Joint Venture (B) Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Luquan Wyoff in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Luquan Wyoff has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Wyoff and China-LuQuan: Negotiating a Joint Venture (B) 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.
Low bargaining power of suppliers
– Suppliers of Luquan Wyoff in the sector have low bargaining power. Wyoff and China-LuQuan: Negotiating a Joint Venture (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Luquan Wyoff to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Luquan Wyoff has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Luquan Wyoff to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Luquan Wyoff is present in almost all the verticals within the industry. This has provided firm in Wyoff and China-LuQuan: Negotiating a Joint Venture (B) 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.
Effective Research and Development (R&D)
– Luquan Wyoff 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 Wyoff and China-LuQuan: Negotiating a Joint Venture (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Luquan Wyoff
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Luquan Wyoff does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Luquan Wyoff 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 Wyoff and China-LuQuan: Negotiating a Joint Venture (B) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Global Business field
– Luquan Wyoff 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 Luquan Wyoff 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 Wyoff and China-LuQuan: Negotiating a Joint Venture (B) 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.
Learning organization
- Luquan Wyoff 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 Luquan Wyoff is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Wyoff and China-LuQuan: Negotiating a Joint Venture (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Global Business industry
– Wyoff and China-LuQuan: Negotiating a Joint Venture (B) firm has clearly differentiated products in the market place. This has enabled Luquan Wyoff to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Luquan Wyoff to invest into research and development (R&D) and innovation.
Weaknesses Wyoff and China-LuQuan: Negotiating a Joint Venture (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Wyoff and China-LuQuan: Negotiating a Joint Venture (B) are -
Lack of clear differentiation of Luquan Wyoff products
– To increase the profitability and margins on the products, Luquan Wyoff needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study Wyoff and China-LuQuan: Negotiating a Joint Venture (B) 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 Luquan Wyoff 's lucrative customers.
Need for greater diversity
– Luquan Wyoff has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Wyoff and China-LuQuan: Negotiating a Joint Venture (B), is just above the industry average. Luquan Wyoff 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Wyoff and China-LuQuan: Negotiating a Joint Venture (B), in the dynamic environment Luquan Wyoff has struggled to respond to the nimble upstart competition. Luquan Wyoff has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Luquan Wyoff is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Wyoff and China-LuQuan: Negotiating a Joint Venture (B) 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 Wyoff and China-LuQuan: Negotiating a Joint Venture (B), 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.
High cash cycle compare to competitors
Luquan Wyoff 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.
Skills based hiring
– The stress on hiring functional specialists at Luquan Wyoff 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.
Products dominated business model
– Even though Luquan Wyoff 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 - Wyoff and China-LuQuan: Negotiating a Joint Venture (B) should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Luquan Wyoff 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.
Opportunities Wyoff and China-LuQuan: Negotiating a Joint Venture (B) | 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 Wyoff and China-LuQuan: Negotiating a Joint Venture (B) are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Luquan Wyoff 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 Luquan Wyoff to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Luquan Wyoff 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 Wyoff and China-LuQuan: Negotiating a Joint Venture (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Luquan Wyoff to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Luquan Wyoff 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.
Manufacturing automation
– Luquan Wyoff 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.
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. Luquan Wyoff can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Luquan Wyoff in the consumer business. Now Luquan Wyoff can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Luquan Wyoff can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Luquan Wyoff can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Better consumer reach
– The expansion of the 5G network will help Luquan Wyoff to increase its market reach. Luquan Wyoff 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.
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. Luquan Wyoff can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Luquan Wyoff 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
– Luquan Wyoff 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.
Learning at scale
– Online learning technologies has now opened space for Luquan Wyoff 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.
Threats Wyoff and China-LuQuan: Negotiating a Joint Venture (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Wyoff and China-LuQuan: Negotiating a Joint Venture (B) are -
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.
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 Luquan Wyoff in the Global Business sector and impact the bottomline of the organization.
Regulatory challenges
– Luquan Wyoff 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.
High dependence on third party suppliers
– Luquan Wyoff 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.
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 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. Luquan Wyoff needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Luquan Wyoff with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Luquan Wyoff 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Luquan Wyoff 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 Wyoff and China-LuQuan: Negotiating a Joint Venture (B) .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Luquan Wyoff 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.
Environmental challenges
– Luquan Wyoff 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. Luquan Wyoff can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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. Luquan Wyoff can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Luquan Wyoff is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Wyoff and China-LuQuan: Negotiating a Joint Venture (B) 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 Wyoff and China-LuQuan: Negotiating a Joint Venture (B) 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 Wyoff and China-LuQuan: Negotiating a Joint Venture (B) 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 Wyoff and China-LuQuan: Negotiating a Joint Venture (B) 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 Wyoff and China-LuQuan: Negotiating a Joint Venture (B) 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 Luquan Wyoff needs to make to build a sustainable competitive advantage.
