Swot Analysis of "Microsoft in the People's Republic of China: 1998 Update" written by Tarun Khanna, Danielle Melito includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that People's Republic facing as an external strategic factors. Some of the topics covered in Microsoft in the People's Republic of China: 1998 Update case study are - Strategic Management Strategies, Government, Marketing, Mergers & acquisitions, Technology and Global Business.
Some of the macro environment factors that can be used to understand the Microsoft in the People's Republic of China: 1998 Update casestudy better are - – challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , technology disruption, cloud computing is disrupting traditional business models, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Microsoft in the People's Republic of China: 1998 Update
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Microsoft in the People's Republic of China: 1998 Update case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the People's Republic, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which People's Republic 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 Microsoft in the People's Republic of China: 1998 Update can be done for the following purposes –
1. Strategic planning using facts provided in Microsoft in the People's Republic of China: 1998 Update case study
2. Improving business portfolio management of People's Republic
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 People's Republic
Strengths Microsoft in the People's Republic of China: 1998 Update | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of People's Republic in Microsoft in the People's Republic of China: 1998 Update Harvard Business Review case study are -
High switching costs
– The high switching costs that People's Republic 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.
High brand equity
– People's Republic has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled People's Republic to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– People's Republic is one of the leading recruiters in the industry. Managers in the Microsoft in the People's Republic of China: 1998 Update are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– People's Republic is present in almost all the verticals within the industry. This has provided firm in Microsoft in the People's Republic of China: 1998 Update 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.
Organizational Resilience of People's Republic
– The covid-19 pandemic has put organizational resilience at the centre of everthing that People's Republic does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- People's Republic 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 People's Republic is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Microsoft in the People's Republic of China: 1998 Update Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of People's Republic in the sector have low bargaining power. Microsoft in the People's Republic of China: 1998 Update has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps People's Republic to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– People's Republic 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 Tarun Khanna, Danielle Melito 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.
Innovation driven organization
– People's Republic is one of the most innovative firm in sector. Manager in Microsoft in the People's Republic of China: 1998 Update Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Global Business industry
– Microsoft in the People's Republic of China: 1998 Update firm has clearly differentiated products in the market place. This has enabled People's Republic to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped People's Republic to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of People's Republic in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– People's Republic has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. People's Republic 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.
Weaknesses Microsoft in the People's Republic of China: 1998 Update | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Microsoft in the People's Republic of China: 1998 Update are -
High operating costs
– Compare to the competitors, firm in the HBR case study Microsoft in the People's Republic of China: 1998 Update 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 People's Republic 's lucrative customers.
High cash cycle compare to competitors
People's Republic 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 People's Republic has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High bargaining power of channel partners
– Because of the regulatory requirements, Tarun Khanna, Danielle Melito suggests that, People's Republic 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.
Need for greater diversity
– People's Republic 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.
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 People's Republic supply chain. Even after few cautionary changes mentioned in the HBR case study - Microsoft in the People's Republic of China: 1998 Update, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left People's Republic vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, People's Republic needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, People's Republic is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Microsoft in the People's Republic of China: 1998 Update can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, People's Republic 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Microsoft in the People's Republic of China: 1998 Update, is just above the industry average. People's Republic 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.
Interest costs
– Compare to the competition, People's Republic 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 Microsoft in the People's Republic of China: 1998 Update | 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 Microsoft in the People's Republic of China: 1998 Update are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, People's Republic 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, Microsoft in the People's Republic of China: 1998 Update, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– People's Republic 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.
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 People's Republic in the consumer business. Now People's Republic can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of People's Republic has opened avenues for new revenue streams for the organization in the industry. This can help People's Republic to build a more holistic ecosystem as suggested in the Microsoft in the People's Republic of China: 1998 Update case study. People's Republic can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– People's Republic 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 Microsoft in the People's Republic of China: 1998 Update - to build a competitive advantage using analytics. The analytics driven competitive advantage can help People's Republic to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at People's Republic 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.
Manufacturing automation
– People's Republic 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects People's Republic can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 People's Republic 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for People's Republic 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.
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. People's Republic 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. People's Republic 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.
Better consumer reach
– The expansion of the 5G network will help People's Republic to increase its market reach. People's Republic 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, People's Republic 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.
Threats Microsoft in the People's Republic of China: 1998 Update External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Microsoft in the People's Republic of China: 1998 Update are -
High dependence on third party suppliers
– People's Republic 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. People's Republic 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.
Stagnating economy with rate increase
– People's Republic 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Microsoft in the People's Republic of China: 1998 Update, People's Republic may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
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.
Technology acceleration in Forth Industrial Revolution
– People's Republic has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, People's Republic 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.
Shortening product life cycle
– it is one of the major threat that People's Republic is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. People's Republic needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Increasing wage structure of People's Republic
– 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 People's Republic.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, People's Republic 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 Microsoft in the People's Republic of China: 1998 Update .
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 People's Republic business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for People's Republic 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 Microsoft in the People's Republic of China: 1998 Update 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 Microsoft in the People's Republic of China: 1998 Update 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 Microsoft in the People's Republic of China: 1998 Update 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 Microsoft in the People's Republic of China: 1998 Update 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 Microsoft in the People's Republic of China: 1998 Update 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 People's Republic needs to make to build a sustainable competitive advantage.
