Factory 539: China Star Technology Electronics Ltd (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Communication
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Factory 539: China Star Technology Electronics Ltd (A)
With a cross-disciplinary perspective, this field-based case series uses the purchase of a manufacturing company based in China to set the stage for an analysis of cost accounting, operational effectiveness, and cross-cultural communication. It offers a discussion about the strategy to purchase a Chinese firm to enter a promising business line for the Chinese market and provides an opportunity to introduce basic accounting, management communication, and operational terms that can be explored in following classes. The material includes an overview of a partnership between a Westerner and two Chinese executives, the issues they discovered through due diligence, plans to break into a new market, and their efforts to communicate lean manufacturing principles in another language and culture. If possible, inviting colleagues from accounting, communications, or operations to jointly teach the class enriches the discussion and provides an integrated learning experience. The A case opens with an overview of the capacitor factory in the province of Henan, China that Peer Nielsen, Baocheng Yang, and Zhihong Li are thinking about purchasing. They discovered several issues: workers' wages had gone unpaid for months, payroll taxes were years in arrears, one of the company's most profitable production lines had been "rented out." Not only were local competitors using its technology, some were producing the same capacitors under the China Star brand. Then there were the production lines that lacked raw materials and the huge unexplained power bill. But the political brass in the region was eager to see new owners purchase the factory with intent to manufacture and would provide the necessary permits and support to get started. Should the group buy it?
Authors :: Gerry Yemen, Elliott N. Weiss, Paul J Simko, Marc W. Modica
Swot Analysis of "Factory 539: China Star Technology Electronics Ltd (A)" written by Gerry Yemen, Elliott N. Weiss, Paul J Simko, Marc W. Modica includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Factory China facing as an external strategic factors. Some of the topics covered in Factory 539: China Star Technology Electronics Ltd (A) case study are - Strategic Management Strategies, Financial markets, Manufacturing, Mergers & acquisitions, Supply chain and Communication.
Some of the macro environment factors that can be used to understand the Factory 539: China Star Technology Electronics Ltd (A) casestudy better are - – technology disruption, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing energy prices, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Factory 539: China Star Technology Electronics Ltd (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Factory 539: China Star Technology Electronics Ltd (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Factory China, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Factory China 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 Factory 539: China Star Technology Electronics Ltd (A) can be done for the following purposes –
1. Strategic planning using facts provided in Factory 539: China Star Technology Electronics Ltd (A) case study
2. Improving business portfolio management of Factory China
3. Assessing feasibility of the new initiative in Communication field.
4. Making a Communication topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Factory China
Strengths Factory 539: China Star Technology Electronics Ltd (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Factory China in Factory 539: China Star Technology Electronics Ltd (A) Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Factory China are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Digital Transformation in Communication segment
- digital transformation varies from industry to industry. For Factory China digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Factory China 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
– Factory China has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Factory 539: China Star Technology Electronics Ltd (A) 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
– Factory China 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 Factory 539: China Star Technology Electronics Ltd (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Factory China is one of the leading recruiters in the industry. Managers in the Factory 539: China Star Technology Electronics Ltd (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Communication field
– Factory China 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 Factory China in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Factory China 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 Gerry Yemen, Elliott N. Weiss, Paul J Simko, Marc W. Modica 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.
Superior customer experience
– The customer experience strategy of Factory China in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Factory China is one of the most innovative firm in sector. Manager in Factory 539: China Star Technology Electronics Ltd (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Factory China
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Factory China does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Factory China 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 Factory China is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Factory 539: China Star Technology Electronics Ltd (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Factory China has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Factory China 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 Factory 539: China Star Technology Electronics Ltd (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Factory 539: China Star Technology Electronics Ltd (A) are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Factory 539: China Star Technology Electronics Ltd (A), is just above the industry average. Factory China 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.
Lack of clear differentiation of Factory China products
– To increase the profitability and margins on the products, Factory China needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring
– The stress on hiring functional specialists at Factory China 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Factory 539: China Star Technology Electronics Ltd (A), in the dynamic environment Factory China has struggled to respond to the nimble upstart competition. Factory China has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Factory China 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Gerry Yemen, Elliott N. Weiss, Paul J Simko, Marc W. Modica suggests that, Factory China 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Factory 539: China Star Technology Electronics Ltd (A) 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 Factory China has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Factory China 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Factory China is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Factory 539: China Star Technology Electronics Ltd (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Factory 539: China Star Technology Electronics Ltd (A), it seems that the employees of Factory China 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.
No frontier risks strategy
– After analyzing the HBR case study Factory 539: China Star Technology Electronics Ltd (A), it seems that company is thinking about the frontier risks that can impact Communication 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 Factory 539: China Star Technology Electronics Ltd (A) | 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 Factory 539: China Star Technology Electronics Ltd (A) are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Factory China 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 Factory China to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Factory China 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, Factory 539: China Star Technology Electronics Ltd (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Factory China in the consumer business. Now Factory China 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, Factory China can use these opportunities to build new business models that can help the communities that Factory China operates in. Secondly it can use opportunities from government spending in Communication sector.
Manufacturing automation
– Factory China can use the latest technology developments to improve its manufacturing and designing process in Communication 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.
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. Factory China can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Factory China has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Factory 539: China Star Technology Electronics Ltd (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Factory China to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Factory China to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Better consumer reach
– The expansion of the 5G network will help Factory China to increase its market reach. Factory China 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Communication industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Factory China 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. Factory China 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.
Leveraging digital technologies
– Factory China 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.
Learning at scale
– Online learning technologies has now opened space for Factory China 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 Factory China has opened avenues for new revenue streams for the organization in the industry. This can help Factory China to build a more holistic ecosystem as suggested in the Factory 539: China Star Technology Electronics Ltd (A) case study. Factory China can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Factory 539: China Star Technology Electronics Ltd (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Factory 539: China Star Technology Electronics Ltd (A) are -
High dependence on third party suppliers
– Factory China 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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Factory China with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Technology acceleration in Forth Industrial Revolution
– Factory China has witnessed rapid integration of technology during Covid-19 in the Communication industry. As one of the leading players in the industry, Factory China needs to keep up with the evolution of technology in the Communication 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 Factory China in the Communication industry. The Communication 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.
Environmental challenges
– Factory China 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. Factory China can take advantage of this fund but it will also bring new competitors in the Communication industry.
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 Factory China.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Factory 539: China Star Technology Electronics Ltd (A), Factory China may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Communication .
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 Factory China business can come under increasing regulations regarding data privacy, data security, etc.
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 Factory China in the Communication sector and impact the bottomline of the organization.
Increasing wage structure of Factory China
– 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 Factory China.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Factory China 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 Factory 539: China Star Technology Electronics Ltd (A) .
Easy access to finance
– Easy access to finance in Communication field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Factory China can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Factory 539: China Star Technology Electronics Ltd (A) 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 Factory 539: China Star Technology Electronics Ltd (A) 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 Factory 539: China Star Technology Electronics Ltd (A) 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 Factory 539: China Star Technology Electronics Ltd (A) 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 Factory 539: China Star Technology Electronics Ltd (A) 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 Factory China needs to make to build a sustainable competitive advantage.
