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 - – talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, wage bills are increasing, there is increasing trade war between United States & China, supply chains are disrupted by pandemic ,
increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, 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 -
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.
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.
Effective Research and Development (R&D)
– Kunshan Kunshan's 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 Kunshan, Incorporated: The Making of China's Richest Town - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
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.
Innovation driven organization
– Kunshan Kunshan's is one of the most innovative firm in sector. Manager in Kunshan, Incorporated: The Making of China's Richest Town Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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.
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.
Training and development
– Kunshan Kunshan's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Kunshan, Incorporated: The Making of China's Richest Town 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.
Highly skilled collaborators
– Kunshan Kunshan's 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 Kunshan, Incorporated: The Making of China's Richest Town HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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 -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Kunshan, Incorporated: The Making of China's Richest Town, in the dynamic environment Kunshan Kunshan's has struggled to respond to the nimble upstart competition. Kunshan Kunshan's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Kunshan Kunshan's 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.
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.
Need for greater diversity
– Kunshan Kunshan's 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.
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 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.
Increasing silos among functional specialists
– The organizational structure of Kunshan Kunshan's is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Kunshan Kunshan's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Kunshan Kunshan's to focus more on services rather than just following the product oriented approach.
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.
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.
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.
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 -
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.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Kunshan Kunshan's 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.
Loyalty marketing
– Kunshan Kunshan's 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.
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. Kunshan Kunshan's 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. Kunshan Kunshan's 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.
Manufacturing automation
– Kunshan Kunshan's 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.
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.
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.
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.
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.
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.
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 -
Environmental challenges
– Kunshan Kunshan's needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Kunshan Kunshan's can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
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.
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.
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.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Kunshan Kunshan's needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
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.
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.
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.
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 Kunshan Kunshan's business can come under increasing regulations regarding data privacy, data security, 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.
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.
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.
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.