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 - – digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels,
central banks are concerned over increasing inflation, increasing energy prices, 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 -
High brand equity
– Meizhou Dongpo has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Meizhou Dongpo to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
Learning organization
- Meizhou Dongpo 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 Meizhou Dongpo is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture firm has clearly differentiated products in the market place. This has enabled Meizhou Dongpo to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Meizhou Dongpo to invest into research and development (R&D) and innovation.
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.
Diverse revenue streams
– Meizhou Dongpo is present in almost all the verticals within the industry. This has provided firm in Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture 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.
Highly skilled collaborators
– Meizhou Dongpo has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
Organizational Resilience of Meizhou Dongpo
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Meizhou Dongpo does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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 -
Skills based hiring
– The stress on hiring functional specialists at Meizhou Dongpo 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, Meizhou Dongpo 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 Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture, is just above the industry average. Meizhou Dongpo 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.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture, it seems that the employees of Meizhou Dongpo 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 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.
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.
Aligning sales with marketing
– It come across in the case study Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture 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 Meizhou Dongpo Restaurant: Entrepreneurship, Leadership and Culture can leverage the sales team experience to cultivate customer relationships as Meizhou Dongpo is planning to shift buying processes online.
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.
Increasing silos among functional specialists
– The organizational structure of Meizhou Dongpo is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Meizhou Dongpo needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Meizhou Dongpo to focus more on services rather than just following the product oriented approach.
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.
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 -
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.
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.
Developing new processes and practices
– Meizhou Dongpo can develop new processes and procedures in Innovation & Entrepreneurship 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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Meizhou Dongpo 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 Meizhou Dongpo to hire the very best people irrespective of their geographical location.
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.
Loyalty marketing
– Meizhou Dongpo 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.
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.
Learning at scale
– Online learning technologies has now opened space for Meizhou Dongpo 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.
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.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Meizhou Dongpo can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Meizhou Dongpo 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 Innovation & Entrepreneurship segment.
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 -
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.
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.
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 Meizhou Dongpo.
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.
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.
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.
Regulatory challenges
– Meizhou Dongpo 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 Innovation & Entrepreneurship industry regulations.
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.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Meizhou Dongpo can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Meizhou Dongpo 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.
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.
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 .
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.
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.
