QI-TECH: A Chinese Technology Company for Sale SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of QI-TECH: A Chinese Technology Company for Sale
QI-TECH, is a Chinese manufacturer of precision coordinate measurement machines. A foreign investor who holds 50% of QI-TECH must negotiate a sale with its Chinese partner and a potential buyer (a large Western measurement machine company). For this purpose the foreign investor must value the joint venture and develop a viable deal structure and negotiation strategy.
Swot Analysis of "QI-TECH: A Chinese Technology Company for Sale" written by Walter Kuemmerle, Chad Ellis includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Qi Tech facing as an external strategic factors. Some of the topics covered in QI-TECH: A Chinese Technology Company for Sale case study are - Strategic Management Strategies, Financial analysis, Joint ventures, Mergers & acquisitions, Negotiations, Operations management, Reorganization and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the QI-TECH: A Chinese Technology Company for Sale casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, geopolitical disruptions, increasing household debt because of falling income levels,
talent flight as more people leaving formal jobs, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of QI-TECH: A Chinese Technology Company for Sale
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in QI-TECH: A Chinese Technology Company for Sale case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Qi Tech, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Qi Tech 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 QI-TECH: A Chinese Technology Company for Sale can be done for the following purposes –
1. Strategic planning using facts provided in QI-TECH: A Chinese Technology Company for Sale case study
2. Improving business portfolio management of Qi Tech
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 Qi Tech
Strengths QI-TECH: A Chinese Technology Company for Sale | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Qi Tech in QI-TECH: A Chinese Technology Company for Sale Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Qi Tech in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Qi Tech 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 QI-TECH: A Chinese Technology Company for Sale - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Qi Tech 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 Qi Tech is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in QI-TECH: A Chinese Technology Company for Sale Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Organizational Resilience of Qi Tech
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Qi Tech does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Qi Tech is present in almost all the verticals within the industry. This has provided firm in QI-TECH: A Chinese Technology Company for Sale case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Low bargaining power of suppliers
– Suppliers of Qi Tech in the sector have low bargaining power. QI-TECH: A Chinese Technology Company for Sale has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Qi Tech to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Qi Tech has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Qi Tech to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Qi Tech 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.
Ability to recruit top talent
– Qi Tech is one of the leading recruiters in the industry. Managers in the QI-TECH: A Chinese Technology Company for Sale are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Qi Tech 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.
Training and development
– Qi Tech has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in QI-TECH: A Chinese Technology Company for Sale 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.
Innovation driven organization
– Qi Tech is one of the most innovative firm in sector. Manager in QI-TECH: A Chinese Technology Company for Sale Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses QI-TECH: A Chinese Technology Company for Sale | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of QI-TECH: A Chinese Technology Company for Sale are -
High bargaining power of channel partners
– Because of the regulatory requirements, Walter Kuemmerle, Chad Ellis suggests that, Qi Tech 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 Qi Tech is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Qi Tech needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Qi Tech to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study QI-TECH: A Chinese Technology Company for Sale, in the dynamic environment Qi Tech has struggled to respond to the nimble upstart competition. Qi Tech has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– It come across in the case study QI-TECH: A Chinese Technology Company for Sale 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 QI-TECH: A Chinese Technology Company for Sale can leverage the sales team experience to cultivate customer relationships as Qi Tech is planning to shift buying processes online.
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 Qi Tech supply chain. Even after few cautionary changes mentioned in the HBR case study - QI-TECH: A Chinese Technology Company for Sale, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Qi Tech vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the QI-TECH: A Chinese Technology Company for Sale 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 Qi Tech has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Qi Tech 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.
High cash cycle compare to competitors
Qi Tech 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.
High operating costs
– Compare to the competitors, firm in the HBR case study QI-TECH: A Chinese Technology Company for Sale 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 Qi Tech 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Qi Tech, firm in the HBR case study QI-TECH: A Chinese Technology Company for Sale needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Qi Tech 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.
Opportunities QI-TECH: A Chinese Technology Company for Sale | 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 QI-TECH: A Chinese Technology Company for Sale are -
Leveraging digital technologies
– Qi Tech 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.
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. Qi Tech 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. Qi Tech 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.
Using analytics as competitive advantage
– Qi Tech 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 QI-TECH: A Chinese Technology Company for Sale - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Qi Tech to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Qi Tech 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, QI-TECH: A Chinese Technology Company for Sale, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Qi Tech is facing challenges because of the dominance of functional experts in the organization. QI-TECH: A Chinese Technology Company for Sale 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Qi Tech can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Qi Tech 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Qi Tech 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 Qi Tech to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Qi Tech 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.
Creating value in data economy
– The success of analytics program of Qi Tech has opened avenues for new revenue streams for the organization in the industry. This can help Qi Tech to build a more holistic ecosystem as suggested in the QI-TECH: A Chinese Technology Company for Sale case study. Qi Tech can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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, Qi Tech can use these opportunities to build new business models that can help the communities that Qi Tech operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Buying journey improvements
– Qi Tech can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. QI-TECH: A Chinese Technology Company for Sale 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Qi Tech can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats QI-TECH: A Chinese Technology Company for Sale External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study QI-TECH: A Chinese Technology Company for Sale are -
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Qi Tech 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 QI-TECH: A Chinese Technology Company for Sale .
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.
Stagnating economy with rate increase
– Qi Tech can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
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 Qi Tech business can come under increasing regulations regarding data privacy, data security, etc.
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. Qi Tech 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.
Technology acceleration in Forth Industrial Revolution
– Qi Tech has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Qi Tech 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.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Qi Tech can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Qi Tech needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Increasing wage structure of Qi Tech
– 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 Qi Tech.
Regulatory challenges
– Qi Tech 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study QI-TECH: A Chinese Technology Company for Sale, Qi Tech 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 .
Shortening product life cycle
– it is one of the major threat that Qi Tech 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 QI-TECH: A Chinese Technology Company for Sale 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 QI-TECH: A Chinese Technology Company for Sale 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 QI-TECH: A Chinese Technology Company for Sale 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 QI-TECH: A Chinese Technology Company for Sale 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 QI-TECH: A Chinese Technology Company for Sale 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 Qi Tech needs to make to build a sustainable competitive advantage.