Icebreaker: The China Entry Decision SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Icebreaker: The China Entry Decision
To maximize their effectiveness, color cases should be printed in color.Jeremy Moon, CEO of Icebreaker, maker of merino-fiber activewear, thinks about the strengths and weaknesses of staying focused on his rapidly expanding U.S. and European markets vs. broadening his attack to include China. If he enters China, should he continue his current strategy of pushing the technical merits of the merino fabric, or should he go the inherently subjective fashion route, given that the technical apparel market in China is virtually nonexistent. A revised version of an earlier case. Includes color exhibits.
Swot Analysis of "Icebreaker: The China Entry Decision" written by Dan Heath, Joseph B. Lassiter includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Icebreaker Merino facing as an external strategic factors. Some of the topics covered in Icebreaker: The China Entry Decision case study are - Strategic Management Strategies, Entrepreneurial finance, Product development and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Icebreaker: The China Entry Decision casestudy better are - – increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, increasing transportation and logistics costs, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation,
geopolitical disruptions, wage bills are increasing, etc
Introduction to SWOT Analysis of Icebreaker: The China Entry Decision
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Icebreaker: The China Entry Decision case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Icebreaker Merino, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Icebreaker Merino 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 Icebreaker: The China Entry Decision can be done for the following purposes –
1. Strategic planning using facts provided in Icebreaker: The China Entry Decision case study
2. Improving business portfolio management of Icebreaker Merino
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 Icebreaker Merino
Strengths Icebreaker: The China Entry Decision | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Icebreaker Merino in Icebreaker: The China Entry Decision Harvard Business Review case study are -
Learning organization
- Icebreaker Merino 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 Icebreaker Merino is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Icebreaker: The China Entry Decision Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Innovation & Entrepreneurship field
– Icebreaker Merino 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 Icebreaker Merino in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Icebreaker Merino 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.
Effective Research and Development (R&D)
– Icebreaker Merino 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 Icebreaker: The China Entry Decision - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Icebreaker Merino is present in almost all the verticals within the industry. This has provided firm in Icebreaker: The China Entry Decision 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.
Strong track record of project management
– Icebreaker Merino is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Icebreaker Merino has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Icebreaker: The China Entry Decision 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
– Icebreaker Merino 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 Icebreaker: The China Entry Decision HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Icebreaker Merino has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Icebreaker Merino to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Icebreaker Merino has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Icebreaker Merino 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.
Analytics focus
– Icebreaker Merino 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 Dan Heath, Joseph B. Lassiter 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.
Organizational Resilience of Icebreaker Merino
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Icebreaker Merino does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses Icebreaker: The China Entry Decision | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Icebreaker: The China Entry Decision are -
Capital Spending Reduction
– Even during the low interest decade, Icebreaker Merino 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, Dan Heath, Joseph B. Lassiter suggests that, Icebreaker Merino 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Icebreaker: The China Entry Decision, it seems that the employees of Icebreaker Merino 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Icebreaker Merino 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.
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 Icebreaker Merino supply chain. Even after few cautionary changes mentioned in the HBR case study - Icebreaker: The China Entry Decision, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Icebreaker Merino vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Icebreaker: The China Entry Decision, in the dynamic environment Icebreaker Merino has struggled to respond to the nimble upstart competition. Icebreaker Merino has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Icebreaker Merino is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Icebreaker: The China Entry Decision can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Icebreaker: The China Entry Decision, is just above the industry average. Icebreaker Merino 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.
Aligning sales with marketing
– It come across in the case study Icebreaker: The China Entry Decision 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 Icebreaker: The China Entry Decision can leverage the sales team experience to cultivate customer relationships as Icebreaker Merino is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Icebreaker: The China Entry Decision 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 Icebreaker Merino 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Icebreaker: The China Entry Decision 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 Icebreaker Merino has relatively successful track record of launching new products.
Opportunities Icebreaker: The China Entry Decision | 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 Icebreaker: The China Entry Decision are -
Better consumer reach
– The expansion of the 5G network will help Icebreaker Merino to increase its market reach. Icebreaker Merino 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.
Creating value in data economy
– The success of analytics program of Icebreaker Merino has opened avenues for new revenue streams for the organization in the industry. This can help Icebreaker Merino to build a more holistic ecosystem as suggested in the Icebreaker: The China Entry Decision case study. Icebreaker Merino can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Icebreaker Merino can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Icebreaker Merino 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, Icebreaker: The China Entry Decision, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Icebreaker Merino 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Icebreaker Merino 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.
Loyalty marketing
– Icebreaker Merino 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.
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 Icebreaker Merino 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.
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 Icebreaker Merino in the consumer business. Now Icebreaker Merino can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Icebreaker Merino 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Icebreaker Merino can use these opportunities to build new business models that can help the communities that Icebreaker Merino operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Using analytics as competitive advantage
– Icebreaker Merino 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 Icebreaker: The China Entry Decision - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Icebreaker Merino to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Icebreaker Merino can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Icebreaker: The China Entry Decision 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.
Threats Icebreaker: The China Entry Decision External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Icebreaker: The China Entry Decision are -
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 Icebreaker Merino 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Icebreaker Merino 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 Icebreaker Merino.
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 Icebreaker Merino business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Icebreaker Merino has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Icebreaker Merino 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.
Regulatory challenges
– Icebreaker Merino 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.
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. Icebreaker Merino needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Increasing wage structure of Icebreaker Merino
– 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 Icebreaker Merino.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Icebreaker: The China Entry Decision, Icebreaker Merino 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 .
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. Icebreaker Merino 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, Icebreaker Merino 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 Icebreaker: The China Entry Decision .
Shortening product life cycle
– it is one of the major threat that Icebreaker Merino is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Icebreaker: The China Entry Decision 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 Icebreaker: The China Entry Decision 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 Icebreaker: The China Entry Decision 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 Icebreaker: The China Entry Decision 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 Icebreaker: The China Entry Decision 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 Icebreaker Merino needs to make to build a sustainable competitive advantage.
