In 2012, China attained a historic development milestone with more Chinese citizens living in cities than in the countryside. China's rapid urbanization, and the accompanying conversion of agricultural land to non-agricultural uses, raised a number of economic, social, and political concerns. Could China maintain its food security in view of the sharply rising demand for land for urban development? How could it ensure the sustainability of local government finances? Was the growing number of land protests the harbinger of major changes in China's political institutions? How would the challenges of urbanization affect the business environment for private firms? The success and viability of China's overall growth strategy depended crucially on managing a successful urban transition.
Swot Analysis of "Urbanizing China" written by Lakshmi Iyer, G.A. Donovan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Urbanization Land facing as an external strategic factors. Some of the topics covered in Urbanizing China case study are - Strategic Management Strategies, Financial management, Globalization, Growth strategy, Organizational culture, Policy, Social responsibility and Global Business.
Some of the macro environment factors that can be used to understand the Urbanizing China casestudy better are - – talent flight as more people leaving formal jobs, technology disruption, geopolitical disruptions, wage bills are increasing, increasing energy prices, increasing transportation and logistics costs, increasing household debt because of falling income levels,
competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Urbanizing China case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Urbanization Land, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Urbanization Land 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 Urbanizing China can be done for the following purposes –
1. Strategic planning using facts provided in Urbanizing China case study
2. Improving business portfolio management of Urbanization Land
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 Urbanization Land
Strengths Urbanizing China | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Urbanization Land in Urbanizing China Harvard Business Review case study are -
Ability to lead change in Global Business field
– Urbanization Land 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 Urbanization Land in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Urbanization Land is one of the most innovative firm in sector. Manager in Urbanizing 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 recruit top talent
– Urbanization Land is one of the leading recruiters in the industry. Managers in the Urbanizing 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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Urbanization Land digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Urbanization Land 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.
High switching costs
– The high switching costs that Urbanization Land 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.
Successful track record of launching new products
– Urbanization Land has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Urbanization Land 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.
Cross disciplinary teams
– Horizontal connected teams at the Urbanization Land 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.
Superior customer experience
– The customer experience strategy of Urbanization Land in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Urbanization Land
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Urbanization Land does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Urbanization Land has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Urbanization Land to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Global Business industry
– Urbanizing China firm has clearly differentiated products in the market place. This has enabled Urbanization Land to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Urbanization Land to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Urbanization Land in the sector have low bargaining power. Urbanizing China has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Urbanization Land to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Urbanizing China | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Urbanizing China are -
Interest costs
– Compare to the competition, Urbanization Land 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Urbanizing China, it seems that the employees of Urbanization Land don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High bargaining power of channel partners
– Because of the regulatory requirements, Lakshmi Iyer, G.A. Donovan suggests that, Urbanization Land 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 Urbanizing 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 Urbanizing China can leverage the sales team experience to cultivate customer relationships as Urbanization Land is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Urbanizing China, is just above the industry average. Urbanization Land 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.
Slow decision making process
– As mentioned earlier in the report, Urbanization Land 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. Urbanization Land 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
– Urbanization Land 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.
Increasing silos among functional specialists
– The organizational structure of Urbanization Land is dominated by functional specialists. It is not different from other players in the Global Business segment. Urbanization Land needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Urbanization Land to focus more on services rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Urbanization Land is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Urbanizing 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.
No frontier risks strategy
– After analyzing the HBR case study Urbanizing China, 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 operating costs
– Compare to the competitors, firm in the HBR case study Urbanizing 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 Urbanization Land 's lucrative customers.
Opportunities Urbanizing 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 Urbanizing China are -
Building a culture of innovation
– managers at Urbanization Land 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Urbanization Land can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Urbanization Land 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, Urbanizing 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.
Better consumer reach
– The expansion of the 5G network will help Urbanization Land to increase its market reach. Urbanization Land will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Leveraging digital technologies
– Urbanization Land 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.
Loyalty marketing
– Urbanization Land 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 Urbanization Land 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 Urbanization Land to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Urbanization Land can use these opportunities to build new business models that can help the communities that Urbanization Land operates in. Secondly it can use opportunities from government spending in Global Business sector.
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. Urbanization Land can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Urbanization Land 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.
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. Urbanization Land 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. Urbanization Land 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.
Using analytics as competitive advantage
– Urbanization Land 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 Urbanizing China - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Urbanization Land to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Urbanization Land is facing challenges because of the dominance of functional experts in the organization. Urbanizing 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.
Threats Urbanizing China External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Urbanizing China are -
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 Urbanization Land.
Shortening product life cycle
– it is one of the major threat that Urbanization Land is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Urbanization Land
– 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 Urbanization Land.
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 Urbanization Land in the Global Business sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Urbanization Land 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.
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.
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. Urbanization Land 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 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, Urbanization Land 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 Urbanizing China .
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. Urbanization Land can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Urbanization Land needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Urbanization Land has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Urbanization Land 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Urbanization Land 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 Urbanizing 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 Urbanizing 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 Urbanizing 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 Urbanizing 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 Urbanizing 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 Urbanization Land needs to make to build a sustainable competitive advantage.