Coca-Cola and Huiyuan (B): Antitrust Barriers to Buying Top Chinese Brands SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Coca-Cola and Huiyuan (B): Antitrust Barriers to Buying Top Chinese Brands
The Coca-Cola Company ("Coca-Cola") announced a plan in September 2008 to acquire China's biggest domestic juice manufacturer, China Huiyuan Juice Group Limited ("Huiyuan"). This acquisition will boost the market share of Coca-Cola from 12.7% to 20.2% in the country's juice market that year. Because Huiyuan-branded fruit juice is one of China's home-grown prominent brands, this news has triggered a public outcry rooted in patriotic nationalism against Coca-Cola's acquisition. Local juice manufacturers have also protested, claiming that Coca-Cola's enhanced market position would drive them out of business. China's antitrust officials plan to conduct a public hearing in late December 2008. Coca-Cola's senior executives are mulling over the best strategies to convince the authorities that this acquisition benefits the consumers and the society at large. Factors of considerations may include the rationale of regulatory control of M&A, synergies of the merging companies, and the potential effects of merging on competition, consumer interests and industry development. (Note: Case B covers the ruling by China's antitrust authorities on Coca-Cola's case and its implications for foreign companies trying to expand business in the country through acquisition of top domestic brands.)
Swot Analysis of "Coca-Cola and Huiyuan (B): Antitrust Barriers to Buying Top Chinese Brands" written by Ping Lin, Wen Zhou, Penelope Chan includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Coca Huiyuan facing as an external strategic factors. Some of the topics covered in Coca-Cola and Huiyuan (B): Antitrust Barriers to Buying Top Chinese Brands case study are - Strategic Management Strategies, Growth strategy, Mergers & acquisitions, Policy and Global Business.
Some of the macro environment factors that can be used to understand the Coca-Cola and Huiyuan (B): Antitrust Barriers to Buying Top Chinese Brands casestudy better are - – geopolitical disruptions, talent flight as more people leaving formal jobs, wage bills are increasing, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy,
digital marketing is dominated by two big players Facebook and Google, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Coca-Cola and Huiyuan (B): Antitrust Barriers to Buying Top Chinese Brands
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Coca-Cola and Huiyuan (B): Antitrust Barriers to Buying Top Chinese Brands case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Coca Huiyuan, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Coca Huiyuan 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 Coca-Cola and Huiyuan (B): Antitrust Barriers to Buying Top Chinese Brands can be done for the following purposes –
1. Strategic planning using facts provided in Coca-Cola and Huiyuan (B): Antitrust Barriers to Buying Top Chinese Brands case study
2. Improving business portfolio management of Coca Huiyuan
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 Coca Huiyuan
Strengths Coca-Cola and Huiyuan (B): Antitrust Barriers to Buying Top Chinese Brands | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Coca Huiyuan in Coca-Cola and Huiyuan (B): Antitrust Barriers to Buying Top Chinese Brands Harvard Business Review case study are -
Sustainable margins compare to other players in Global Business industry
– Coca-Cola and Huiyuan (B): Antitrust Barriers to Buying Top Chinese Brands firm has clearly differentiated products in the market place. This has enabled Coca Huiyuan to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Coca Huiyuan to invest into research and development (R&D) and innovation.
Ability to lead change in Global Business field
– Coca Huiyuan 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 Coca Huiyuan in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Coca Huiyuan is present in almost all the verticals within the industry. This has provided firm in Coca-Cola and Huiyuan (B): Antitrust Barriers to Buying Top Chinese Brands 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.
Learning organization
- Coca Huiyuan 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 Coca Huiyuan is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Coca-Cola and Huiyuan (B): Antitrust Barriers to Buying Top Chinese Brands Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Coca Huiyuan
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Coca Huiyuan does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Coca Huiyuan is one of the most innovative firm in sector. Manager in Coca-Cola and Huiyuan (B): Antitrust Barriers to Buying Top Chinese Brands 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 Coca Huiyuan in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Coca Huiyuan 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 Coca Huiyuan digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Coca Huiyuan 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.
Successful track record of launching new products
– Coca Huiyuan has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Coca Huiyuan 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.
Analytics focus
– Coca Huiyuan 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 Ping Lin, Wen Zhou, Penelope Chan 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.
Ability to recruit top talent
– Coca Huiyuan is one of the leading recruiters in the industry. Managers in the Coca-Cola and Huiyuan (B): Antitrust Barriers to Buying Top Chinese Brands are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Coca-Cola and Huiyuan (B): Antitrust Barriers to Buying Top Chinese Brands | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Coca-Cola and Huiyuan (B): Antitrust Barriers to Buying Top Chinese Brands are -
No frontier risks strategy
– After analyzing the HBR case study Coca-Cola and Huiyuan (B): Antitrust Barriers to Buying Top Chinese Brands, 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.
Increasing silos among functional specialists
– The organizational structure of Coca Huiyuan is dominated by functional specialists. It is not different from other players in the Global Business segment. Coca Huiyuan needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Coca Huiyuan to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Coca Huiyuan 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. Coca Huiyuan 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.
High cash cycle compare to competitors
Coca Huiyuan 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.
Products dominated business model
– Even though Coca Huiyuan 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 - Coca-Cola and Huiyuan (B): Antitrust Barriers to Buying Top Chinese Brands should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Coca-Cola and Huiyuan (B): Antitrust Barriers to Buying Top Chinese Brands 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 Coca Huiyuan has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Coca Huiyuan 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.
Capital Spending Reduction
– Even during the low interest decade, Coca Huiyuan 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 Coca-Cola and Huiyuan (B): Antitrust Barriers to Buying Top Chinese Brands, is just above the industry average. Coca Huiyuan 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.
Skills based hiring
– The stress on hiring functional specialists at Coca Huiyuan 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.
Interest costs
– Compare to the competition, Coca Huiyuan 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 Coca-Cola and Huiyuan (B): Antitrust Barriers to Buying Top Chinese Brands | 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 Coca-Cola and Huiyuan (B): Antitrust Barriers to Buying Top Chinese Brands are -
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. Coca Huiyuan can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Coca Huiyuan 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 Coca-Cola and Huiyuan (B): Antitrust Barriers to Buying Top Chinese Brands - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Coca Huiyuan to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Coca Huiyuan in the consumer business. Now Coca Huiyuan can target international markets with far fewer capital restrictions requirements than the existing system.
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. Coca Huiyuan can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Coca Huiyuan 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.
Better consumer reach
– The expansion of the 5G network will help Coca Huiyuan to increase its market reach. Coca Huiyuan 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.
Developing new processes and practices
– Coca Huiyuan 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.
Loyalty marketing
– Coca Huiyuan 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.
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 Coca Huiyuan 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.
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. Coca Huiyuan 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. Coca Huiyuan 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Coca Huiyuan 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, Coca Huiyuan is facing challenges because of the dominance of functional experts in the organization. Coca-Cola and Huiyuan (B): Antitrust Barriers to Buying Top Chinese Brands 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.
Leveraging digital technologies
– Coca Huiyuan 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.
Threats Coca-Cola and Huiyuan (B): Antitrust Barriers to Buying Top Chinese Brands External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Coca-Cola and Huiyuan (B): Antitrust Barriers to Buying Top Chinese Brands are -
Regulatory challenges
– Coca Huiyuan 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 Coca Huiyuan.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Coca Huiyuan 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.
Stagnating economy with rate increase
– Coca Huiyuan 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.
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. Coca Huiyuan 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Coca Huiyuan with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Coca Huiyuan 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 Coca-Cola and Huiyuan (B): Antitrust Barriers to Buying Top Chinese Brands .
High dependence on third party suppliers
– Coca Huiyuan 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.
Increasing wage structure of Coca Huiyuan
– 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 Coca Huiyuan.
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 Coca Huiyuan in the Global Business sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Coca Huiyuan is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Coca Huiyuan business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Coca Huiyuan has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Coca Huiyuan 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.
Weighted SWOT Analysis of Coca-Cola and Huiyuan (B): Antitrust Barriers to Buying Top Chinese Brands 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 Coca-Cola and Huiyuan (B): Antitrust Barriers to Buying Top Chinese Brands 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 Coca-Cola and Huiyuan (B): Antitrust Barriers to Buying Top Chinese Brands 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 Coca-Cola and Huiyuan (B): Antitrust Barriers to Buying Top Chinese Brands 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 Coca-Cola and Huiyuan (B): Antitrust Barriers to Buying Top Chinese Brands 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 Coca Huiyuan needs to make to build a sustainable competitive advantage.