Kunshan, Incorporated: The Making of China's Richest Town SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Kunshan, Incorporated: The Making of China's Richest Town
In 1980, the city of Kunshan was mere countryside, registering neither on the Chinese government's nor the international business community's radar. By 2010, Kunshan had become the richest city per capita in China and a global technology powerhouse, home to companies such as Foxconn, Compal Electronics, and Wistron. Kunshan's entrepreneurial, self-starting development combined with strategic location and high levels of local government support had been responsible for Kunshan's tremendous growth and success. How could it continue to grow at a rate to maintain its leadership among Chinese entrepreneurial cities? And would the founding of an international, joint-venture campus with Duke and Wuhan University keep the city of Kunshan innovative and ahead of the curve?
Authors :: William C. Kirby, Nora Bynum, Tracy Yuen Manty, Erica M Zendell
Swot Analysis of "Kunshan, Incorporated: The Making of China's Richest Town" written by William C. Kirby, Nora Bynum, Tracy Yuen Manty, Erica M Zendell includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Kunshan Kunshan's facing as an external strategic factors. Some of the topics covered in Kunshan, Incorporated: The Making of China's Richest Town case study are - Strategic Management Strategies, Cross-cultural management, Emerging markets, Entrepreneurship, Financial management, Global strategy, Government, Innovation, Leadership, Technology and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Kunshan, Incorporated: The Making of China's Richest Town casestudy better are - – increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs,
digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Kunshan, Incorporated: The Making of China's Richest Town
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Kunshan, Incorporated: The Making of China's Richest Town case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kunshan Kunshan's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kunshan Kunshan's 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 Kunshan, Incorporated: The Making of China's Richest Town can be done for the following purposes –
1. Strategic planning using facts provided in Kunshan, Incorporated: The Making of China's Richest Town case study
2. Improving business portfolio management of Kunshan Kunshan's
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 Kunshan Kunshan's
Strengths Kunshan, Incorporated: The Making of China's Richest Town | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kunshan Kunshan's in Kunshan, Incorporated: The Making of China's Richest Town Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Kunshan Kunshan's 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.
Learning organization
- Kunshan Kunshan's 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 Kunshan Kunshan's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Kunshan, Incorporated: The Making of China's Richest Town Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Kunshan Kunshan's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Kunshan Kunshan's 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 Kunshan Kunshan's 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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Kunshan, Incorporated: The Making of China's Richest Town firm has clearly differentiated products in the market place. This has enabled Kunshan Kunshan's to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Kunshan Kunshan's to invest into research and development (R&D) and innovation.
Analytics focus
– Kunshan Kunshan's 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 William C. Kirby, Nora Bynum, Tracy Yuen Manty, Erica M Zendell 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 lead change in Innovation & Entrepreneurship field
– Kunshan Kunshan's 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 Kunshan Kunshan's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Kunshan Kunshan's is present in almost all the verticals within the industry. This has provided firm in Kunshan, Incorporated: The Making of China's Richest Town 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.
Low bargaining power of suppliers
– Suppliers of Kunshan Kunshan's in the sector have low bargaining power. Kunshan, Incorporated: The Making of China's Richest Town has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Kunshan Kunshan's to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the Kunshan, Incorporated: The Making of China's Richest Town Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Ability to recruit top talent
– Kunshan Kunshan's is one of the leading recruiters in the industry. Managers in the Kunshan, Incorporated: The Making of China's Richest Town are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Kunshan Kunshan's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Kunshan Kunshan's 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.
Weaknesses Kunshan, Incorporated: The Making of China's Richest Town | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kunshan, Incorporated: The Making of China's Richest Town are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Kunshan, Incorporated: The Making of China's Richest Town, is just above the industry average. Kunshan Kunshan's 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Kunshan, Incorporated: The Making of China's Richest Town 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 Kunshan Kunshan's 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Kunshan Kunshan's 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Kunshan Kunshan's 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.
No frontier risks strategy
– After analyzing the HBR case study Kunshan, Incorporated: The Making of China's Richest Town, 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.
Aligning sales with marketing
– It come across in the case study Kunshan, Incorporated: The Making of China's Richest Town 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 Kunshan, Incorporated: The Making of China's Richest Town can leverage the sales team experience to cultivate customer relationships as Kunshan Kunshan's is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Kunshan Kunshan's, firm in the HBR case study Kunshan, Incorporated: The Making of China's Richest Town needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As Kunshan, Incorporated: The Making of China's Richest Town HBR case study mentions - Kunshan Kunshan's takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Lack of clear differentiation of Kunshan Kunshan's products
– To increase the profitability and margins on the products, Kunshan Kunshan's needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Kunshan, Incorporated: The Making of China's Richest Town 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 Kunshan Kunshan's has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, William C. Kirby, Nora Bynum, Tracy Yuen Manty, Erica M Zendell suggests that, Kunshan Kunshan's 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 Kunshan, Incorporated: The Making of China's Richest Town | 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 Kunshan, Incorporated: The Making of China's Richest Town are -
Leveraging digital technologies
– Kunshan Kunshan's 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Kunshan Kunshan's is facing challenges because of the dominance of functional experts in the organization. Kunshan, Incorporated: The Making of China's Richest Town 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Kunshan Kunshan's 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, Kunshan, Incorporated: The Making of China's Richest Town, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Kunshan Kunshan's can use these opportunities to build new business models that can help the communities that Kunshan Kunshan's operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Better consumer reach
– The expansion of the 5G network will help Kunshan Kunshan's to increase its market reach. Kunshan Kunshan's 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Kunshan Kunshan's 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.
Building a culture of innovation
– managers at Kunshan Kunshan's 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.
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. Kunshan Kunshan's 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. Kunshan Kunshan's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Kunshan Kunshan's 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Kunshan Kunshan's 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 Kunshan Kunshan's to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Kunshan Kunshan's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Kunshan Kunshan's in the consumer business. Now Kunshan Kunshan's can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Kunshan, Incorporated: The Making of China's Richest Town External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Kunshan, Incorporated: The Making of China's Richest Town are -
High dependence on third party suppliers
– Kunshan Kunshan's 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Kunshan Kunshan's 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.
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 Kunshan Kunshan's in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Kunshan Kunshan's is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Kunshan Kunshan's
– 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 Kunshan Kunshan's.
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. Kunshan Kunshan's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Kunshan, Incorporated: The Making of China's Richest Town, Kunshan Kunshan's 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 .
Consumer confidence and its impact on Kunshan Kunshan's 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.
Regulatory challenges
– Kunshan Kunshan's 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.
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. Kunshan Kunshan's 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kunshan Kunshan's 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 Kunshan, Incorporated: The Making of China's Richest Town .
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 Kunshan Kunshan's.
Technology acceleration in Forth Industrial Revolution
– Kunshan Kunshan's has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Kunshan Kunshan's 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.
Weighted SWOT Analysis of Kunshan, Incorporated: The Making of China's Richest Town 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 Kunshan, Incorporated: The Making of China's Richest Town 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 Kunshan, Incorporated: The Making of China's Richest Town 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 Kunshan, Incorporated: The Making of China's Richest Town 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 Kunshan, Incorporated: The Making of China's Richest Town 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 Kunshan Kunshan's needs to make to build a sustainable competitive advantage.
