Case Study Description of Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture
Meizhou Dongpo is a large catering group in China. On June 6, 1996, the first Meizhou Dongpo Restaurant was opened in Beijing. The enterprise entered the stage of rapid development in 2000, and set up Beijing Meizhou Restaurant Management Co., Ltd. In June 2003 the business mainly covers restaurant management, catering services, food processing and sales, with its headquarters in Beijing including logistics center and central kitchen. By the end of 2013, Meizhou Dongpo Group covered six business types. Meizhou Dongpo Group has annual operating revenue of over RMB 1.8 billion, accumulative consumers of over 20 million persons-times and more than 8,000 employees. This case focuses on the starting-up process of Meizhou Dongpo Group by Wang Gang. Meizhou Dongpo has grown from a small restaurant into one of top 100 catering companies in China. This simple and arduous entrepreneurship story has been happening over the past decade in the highly competitive traditional catering industry. High technology, well-educated talent, employed manager, brand-new business model and financial support from bank or venture capital institutions cannot be found in the entrepreneurship history of Meizhou Dongpo. The case is a good attempt to analyze how did Wang Gang create and rule a catering empire by his unique leadership?
Swot Analysis of "Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture" written by F. Warren McFarlan, Weiku Wu, Jia Guo includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Meizhou Dongpo facing as an external strategic factors. Some of the topics covered in Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture case study are - Strategic Management Strategies, Leadership and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, geopolitical disruptions, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation,
banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, etc
Introduction to SWOT Analysis of Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Meizhou Dongpo, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Meizhou Dongpo 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 Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture can be done for the following purposes –
1. Strategic planning using facts provided in Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture case study
2. Improving business portfolio management of Meizhou Dongpo
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Meizhou Dongpo
Strengths Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Meizhou Dongpo in Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Meizhou Dongpo 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.
Low bargaining power of suppliers
– Suppliers of Meizhou Dongpo in the sector have low bargaining power. Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Meizhou Dongpo to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Meizhou Dongpo is one of the most innovative firm in sector. Manager in Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Meizhou Dongpo 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 F. Warren McFarlan, Weiku Wu, Jia Guo 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.
Strong track record of project management
– Meizhou Dongpo is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Meizhou Dongpo is one of the leading recruiters in the industry. Managers in the Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Effective Research and Development (R&D)
– Meizhou Dongpo 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 Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Superior customer experience
– The customer experience strategy of Meizhou Dongpo in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Innovation & Entrepreneurship field
– Meizhou Dongpo 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 Meizhou Dongpo in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Meizhou Dongpo 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.
Training and development
– Meizhou Dongpo has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture 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.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Meizhou Dongpo digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Meizhou Dongpo 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 Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture are -
Lack of clear differentiation of Meizhou Dongpo products
– To increase the profitability and margins on the products, Meizhou Dongpo needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Meizhou Dongpo 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.
Low market penetration in new markets
– Outside its home market of Meizhou Dongpo, firm in the HBR case study Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture 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 Meizhou Dongpo has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Meizhou Dongpo 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.
No frontier risks strategy
– After analyzing the HBR case study Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Meizhou Dongpo is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow decision making process
– As mentioned earlier in the report, Meizhou Dongpo 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. Meizhou Dongpo 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 operating costs
– Compare to the competitors, firm in the HBR case study Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture 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 Meizhou Dongpo 's lucrative customers.
Need for greater diversity
– Meizhou Dongpo has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High bargaining power of channel partners
– Because of the regulatory requirements, F. Warren McFarlan, Weiku Wu, Jia Guo suggests that, Meizhou Dongpo 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.
Opportunities Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture | 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 Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture are -
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. Meizhou Dongpo can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Meizhou Dongpo can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Meizhou Dongpo in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Meizhou Dongpo to increase its market reach. Meizhou Dongpo will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Low interest rates
– Even though inflation is raising its head in most developed economies, Meizhou Dongpo 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 Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Meizhou Dongpo 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. Meizhou Dongpo 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Meizhou Dongpo can use these opportunities to build new business models that can help the communities that Meizhou Dongpo operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Meizhou Dongpo can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Meizhou Dongpo is facing challenges because of the dominance of functional experts in the organization. Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture 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
– Meizhou Dongpo can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship 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.
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 Meizhou Dongpo in the consumer business. Now Meizhou Dongpo can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Meizhou Dongpo has opened avenues for new revenue streams for the organization in the industry. This can help Meizhou Dongpo to build a more holistic ecosystem as suggested in the Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture case study. Meizhou Dongpo can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Meizhou Dongpo 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, Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Meizhou Dongpo 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 Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture .
Technology acceleration in Forth Industrial Revolution
– Meizhou Dongpo has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Meizhou Dongpo needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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.
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.
High dependence on third party suppliers
– Meizhou Dongpo 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.
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 Meizhou Dongpo in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Consumer confidence and its impact on Meizhou Dongpo 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.
Increasing wage structure of Meizhou Dongpo
– 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 Meizhou Dongpo.
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. Meizhou Dongpo 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 Meizhou Dongpo with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Shortening product life cycle
– it is one of the major threat that Meizhou Dongpo is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture, Meizhou Dongpo may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Meizhou Dongpo in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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 Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture 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 Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture 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 Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture 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 Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture 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 Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture 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 Meizhou Dongpo needs to make to build a sustainable competitive advantage.