Challenges of Launching a Start-Up in China: Dorm99.com SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study SWOT Analysis Solution
Case Study Description of Challenges of Launching a Start-Up in China: Dorm99.com
After graduating from Harvard Business School in June 2006, Ken Pao and Bill Li were ready to fully commit to the Internet start-up they had been working on since they first stepped foot on the business school campus. They moved to Beijing, rounded out their management team, received venture capital investment, developed joint-venture partnerships, and set key milestones to create a full-impact product launch for their social networking Web site catering to the college market. On the day of their launch, they faced a setback from China's Ministry of Education and were forced back to square one. Discusses the pluses and minuses of partnering with China's government ministries, the highs and lows of entrepreneurship, and the numerous opportunities available to entrepreneurship in China today.
Authors :: William C. Kirby, F. Warren McFarlan, Tracy Yuen Manty
Swot Analysis of "Challenges of Launching a Start-Up in China: Dorm99.com" written by William C. Kirby, F. Warren McFarlan, Tracy Yuen Manty includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Dorm99 Minuses facing as an external strategic factors. Some of the topics covered in Challenges of Launching a Start-Up in China: Dorm99.com case study are - Strategic Management Strategies, Internet, Marketing, Networking, Venture capital and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Challenges of Launching a Start-Up in China: Dorm99.com casestudy better are - – increasing energy prices, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels,
talent flight as more people leaving formal jobs, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Challenges of Launching a Start-Up in China: Dorm99.com
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Challenges of Launching a Start-Up in China: Dorm99.com case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Dorm99 Minuses, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Dorm99 Minuses 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 Challenges of Launching a Start-Up in China: Dorm99.com can be done for the following purposes –
1. Strategic planning using facts provided in Challenges of Launching a Start-Up in China: Dorm99.com case study
2. Improving business portfolio management of Dorm99 Minuses
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 Dorm99 Minuses
Strengths Challenges of Launching a Start-Up in China: Dorm99.com | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Dorm99 Minuses in Challenges of Launching a Start-Up in China: Dorm99.com Harvard Business Review case study are -
Ability to recruit top talent
– Dorm99 Minuses is one of the leading recruiters in the industry. Managers in the Challenges of Launching a Start-Up in China: Dorm99.com are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Dorm99 Minuses digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Dorm99 Minuses 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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Challenges of Launching a Start-Up in China: Dorm99.com firm has clearly differentiated products in the market place. This has enabled Dorm99 Minuses to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Dorm99 Minuses to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Dorm99 Minuses 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 Challenges of Launching a Start-Up in China: Dorm99.com HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Dorm99 Minuses is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Dorm99 Minuses in the sector have low bargaining power. Challenges of Launching a Start-Up in China: Dorm99.com has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Dorm99 Minuses to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Innovation & Entrepreneurship field
– Dorm99 Minuses 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 Dorm99 Minuses in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Dorm99 Minuses 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 Dorm99 Minuses is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Challenges of Launching a Start-Up in China: Dorm99.com Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Dorm99 Minuses
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Dorm99 Minuses does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Dorm99 Minuses has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Dorm99 Minuses to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the Challenges of Launching a Start-Up in China: Dorm99.com 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.
Cross disciplinary teams
– Horizontal connected teams at the Dorm99 Minuses 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.
Weaknesses Challenges of Launching a Start-Up in China: Dorm99.com | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Challenges of Launching a Start-Up in China: Dorm99.com are -
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Dorm99 Minuses supply chain. Even after few cautionary changes mentioned in the HBR case study - Challenges of Launching a Start-Up in China: Dorm99.com, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Dorm99 Minuses vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, Dorm99 Minuses has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Workers concerns about automation
– As automation is fast increasing in the segment, Dorm99 Minuses 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Challenges of Launching a Start-Up in China: Dorm99.com, in the dynamic environment Dorm99 Minuses has struggled to respond to the nimble upstart competition. Dorm99 Minuses has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners
– Because of the regulatory requirements, William C. Kirby, F. Warren McFarlan, Tracy Yuen Manty suggests that, Dorm99 Minuses 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.
Need for greater diversity
– Dorm99 Minuses 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.
Slow to strategic competitive environment developments
– As Challenges of Launching a Start-Up in China: Dorm99.com HBR case study mentions - Dorm99 Minuses 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.
High cash cycle compare to competitors
Dorm99 Minuses 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.
Capital Spending Reduction
– Even during the low interest decade, Dorm99 Minuses 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.
Aligning sales with marketing
– It come across in the case study Challenges of Launching a Start-Up in China: Dorm99.com 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 Challenges of Launching a Start-Up in China: Dorm99.com can leverage the sales team experience to cultivate customer relationships as Dorm99 Minuses is planning to shift buying processes online.
Lack of clear differentiation of Dorm99 Minuses products
– To increase the profitability and margins on the products, Dorm99 Minuses needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Challenges of Launching a Start-Up in China: Dorm99.com | 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 Challenges of Launching a Start-Up in China: Dorm99.com are -
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 Dorm99 Minuses in the consumer business. Now Dorm99 Minuses can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Dorm99 Minuses can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Challenges of Launching a Start-Up in China: Dorm99.com 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.
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. Dorm99 Minuses 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. Dorm99 Minuses 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Dorm99 Minuses can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Dorm99 Minuses 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, Challenges of Launching a Start-Up in China: Dorm99.com, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Dorm99 Minuses 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 Challenges of Launching a Start-Up in China: Dorm99.com - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Dorm99 Minuses to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Dorm99 Minuses has opened avenues for new revenue streams for the organization in the industry. This can help Dorm99 Minuses to build a more holistic ecosystem as suggested in the Challenges of Launching a Start-Up in China: Dorm99.com case study. Dorm99 Minuses can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Dorm99 Minuses 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.
Learning at scale
– Online learning technologies has now opened space for Dorm99 Minuses 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Dorm99 Minuses 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 Dorm99 Minuses to hire the very best people irrespective of their geographical location.
Low interest rates
– Even though inflation is raising its head in most developed economies, Dorm99 Minuses can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Dorm99 Minuses is facing challenges because of the dominance of functional experts in the organization. Challenges of Launching a Start-Up in China: Dorm99.com 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Dorm99 Minuses 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.
Threats Challenges of Launching a Start-Up in China: Dorm99.com External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Challenges of Launching a Start-Up in China: Dorm99.com are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Challenges of Launching a Start-Up in China: Dorm99.com, Dorm99 Minuses 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 .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Dorm99 Minuses 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 Challenges of Launching a Start-Up in China: Dorm99.com .
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Dorm99 Minuses with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Dorm99 Minuses in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Consumer confidence and its impact on Dorm99 Minuses demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Increasing wage structure of Dorm99 Minuses
– 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 Dorm99 Minuses.
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.
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. Dorm99 Minuses 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.
High dependence on third party suppliers
– Dorm99 Minuses 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 Dorm99 Minuses 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.
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 Dorm99 Minuses.
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 Dorm99 Minuses business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Challenges of Launching a Start-Up in China: Dorm99.com 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 Challenges of Launching a Start-Up in China: Dorm99.com 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 Challenges of Launching a Start-Up in China: Dorm99.com 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 Challenges of Launching a Start-Up in China: Dorm99.com 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 Challenges of Launching a Start-Up in China: Dorm99.com 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 Dorm99 Minuses needs to make to build a sustainable competitive advantage.