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 government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs,
geopolitical disruptions, supply chains are disrupted by pandemic , 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 -
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.
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.
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.
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.
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.
High switching costs
– The high switching costs that Localisation India 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.
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.
Analytics focus
– Localisation India 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 Nikhil Celly, Penny Lau 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.
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.
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.
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.
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 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.
Low market penetration in new markets
– Outside its home market of Localisation India, firm in the HBR case study Haier in India: Building Presence in a Mass Market Beyond China needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
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.
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.
Need for greater diversity
– Localisation India 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.
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.
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.
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.
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 -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Localisation India can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Localisation India 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.
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.
Developing new processes and practices
– Localisation India 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.
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 -
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.
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.
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.
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.
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.
Technology acceleration in Forth Industrial Revolution
– Localisation India has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Localisation India 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.
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.
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Haier in India: Building Presence in a Mass Market Beyond China, Localisation India 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 .
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.
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.
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.