Haier in India: Building Presence in a Mass Market Beyond China SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Strategy / MBA Resources
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 - – challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, increasing energy prices,
cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, 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 -
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.
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.
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.
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.
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.
High brand equity
– Localisation India has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Localisation India to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
Learning organization
- Localisation India 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 Localisation India is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Haier in India: Building Presence in a Mass Market Beyond China Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Localisation India is present in almost all the verticals within the industry. This has provided firm in Haier in India: Building Presence in a Mass Market Beyond China 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.
Ability to recruit top talent
– Localisation India is one of the leading recruiters in the industry. Managers in the Haier in India: Building Presence in a Mass Market Beyond China are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
Strong track record of project management
– Localisation India is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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 -
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Haier in India: Building Presence in a Mass Market Beyond China HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Localisation India has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Localisation India is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Haier in India: Building Presence in a Mass Market Beyond China can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
Skills based hiring
– The stress on hiring functional specialists at Localisation India 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.
Increasing silos among functional specialists
– The organizational structure of Localisation India is dominated by functional specialists. It is not different from other players in the Global Business segment. Localisation India needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Localisation India to focus more on services rather than just following the product oriented approach.
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.
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.
Products dominated business model
– Even though Localisation India 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 - Haier in India: Building Presence in a Mass Market Beyond China should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Localisation India products
– To increase the profitability and margins on the products, Localisation India needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
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 -
Using analytics as competitive advantage
– Localisation India 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 Haier in India: Building Presence in a Mass Market Beyond China - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Localisation India to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Localisation India 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.
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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Localisation India 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 Localisation India to hire the very best people irrespective of their geographical location.
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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Localisation India 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, Haier in India: Building Presence in a Mass Market Beyond China, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
Creating value in data economy
– The success of analytics program of Localisation India has opened avenues for new revenue streams for the organization in the industry. This can help Localisation India to build a more holistic ecosystem as suggested in the Haier in India: Building Presence in a Mass Market Beyond China case study. Localisation India can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 -
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.
Shortening product life cycle
– it is one of the major threat that Localisation India is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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 Localisation India in the Global Business sector and impact the bottomline of the organization.
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.
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.
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.
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.
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.
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.
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.
