Juner New Materials: On the Road to IPO SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Juner New Materials: On the Road to IPO
Juner New Materials (Juner) is a private China - based company that develops, produces, and distributes modified plastic compounds. Founded in 1995 by female serial entrepreneur Xiaomin Chen, Juner has exhibited strong performance and growth potential in the past fifteen years. The company currently has a workforce of more than 300 employees and is an icon of high-technology ventures in Zhejiang province. As Juner strives to become the leader in China's modified plastics industry, the company presently faces scalability challenges primarily limited by financing constraints. Recently, with two major competitors having raised additional capital through their respective public offerings, Juner has reacted to these market changes. Since competition was aggressively dedicating new resources toward production and service capacity expansion, by June 2010 it was apparent that external funding was imperative for extending and sustaining Juner's competitive edge. Upon several discussions, Chen and the board of Juner concluded that it was opportune to take Juner public. The decision to go public has led to the discussion of several issues: (1) the choice of stock exchange, (2) the "justified" valuation based upon Juner's fundamentals and respective comparables, and (3) the methods Juner would adopt to maintain its growth rate and exceed investor expectations before and after the IPO.
Authors :: F. Warren McFarlan, Donglin Xia, Ning Jia, Ziqian Zhao
Swot Analysis of "Juner New Materials: On the Road to IPO" written by F. Warren McFarlan, Donglin Xia, Ning Jia, Ziqian Zhao includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Juner Juner's facing as an external strategic factors. Some of the topics covered in Juner New Materials: On the Road to IPO case study are - Strategic Management Strategies, Financial analysis, Financial management, IPO and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Juner New Materials: On the Road to IPO casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, increasing household debt because of falling income levels, there is backlash against globalization,
digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Juner New Materials: On the Road to IPO
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Juner New Materials: On the Road to IPO case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Juner Juner's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Juner Juner's operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Juner New Materials: On the Road to IPO can be done for the following purposes –
1. Strategic planning using facts provided in Juner New Materials: On the Road to IPO case study
2. Improving business portfolio management of Juner Juner's
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Juner Juner's
Strengths Juner New Materials: On the Road to IPO | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Juner Juner's in Juner New Materials: On the Road to IPO Harvard Business Review case study are -
Diverse revenue streams
– Juner Juner's is present in almost all the verticals within the industry. This has provided firm in Juner New Materials: On the Road to IPO 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.
Cross disciplinary teams
– Horizontal connected teams at the Juner Juner's are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Operational resilience
– The operational resilience strategy in the Juner New Materials: On the Road to IPO 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.
Analytics focus
– Juner Juner's is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by F. Warren McFarlan, Donglin Xia, Ning Jia, Ziqian Zhao 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.
Successful track record of launching new products
– Juner Juner's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Juner Juner's 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.
Innovation driven organization
– Juner Juner's is one of the most innovative firm in sector. Manager in Juner New Materials: On the Road to IPO Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Juner Juner's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Juner Juner's has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Organizational Resilience of Juner Juner's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Juner Juner's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Juner Juner's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Juner Juner's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Juner New Materials: On the Road to IPO firm has clearly differentiated products in the market place. This has enabled Juner Juner's to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Juner Juner's to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Juner Juner's in the sector have low bargaining power. Juner New Materials: On the Road to IPO has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Juner Juner's to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Juner Juner's has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Juner New Materials: On the Road to IPO - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Juner New Materials: On the Road to IPO | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Juner New Materials: On the Road to IPO are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Juner New Materials: On the Road to IPO, it seems that the employees of Juner Juner's 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.
Increasing silos among functional specialists
– The organizational structure of Juner Juner's is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Juner Juner's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Juner Juner's to focus more on services rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, Juner Juner's has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Juner Juner's even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High bargaining power of channel partners
– Because of the regulatory requirements, F. Warren McFarlan, Donglin Xia, Ning Jia, Ziqian Zhao suggests that, Juner Juner's is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Juner New Materials: On the Road to IPO, is just above the industry average. Juner Juner's needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High operating costs
– Compare to the competitors, firm in the HBR case study Juner New Materials: On the Road to IPO 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 Juner Juner's 's lucrative customers.
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 Juner Juner's supply chain. Even after few cautionary changes mentioned in the HBR case study - Juner New Materials: On the Road to IPO, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Juner Juner's vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Juner Juner's has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
No frontier risks strategy
– After analyzing the HBR case study Juner New Materials: On the Road to IPO, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Juner Juner's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Juner New Materials: On the Road to IPO can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Juner New Materials: On the Road to IPO, in the dynamic environment Juner Juner's has struggled to respond to the nimble upstart competition. Juner Juner's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Juner New Materials: On the Road to IPO | 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 Juner New Materials: On the Road to IPO are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Juner Juner's to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Juner Juner's to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Juner Juner's 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.
Loyalty marketing
– Juner Juner's has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Juner Juner's is facing challenges because of the dominance of functional experts in the organization. Juner New Materials: On the Road to IPO 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.
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. Juner Juner's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Juner Juner's in the consumer business. Now Juner Juner's can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Juner Juner's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Juner New Materials: On the Road to IPO 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.
Learning at scale
– Online learning technologies has now opened space for Juner Juner's to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Juner Juner's can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Juner New Materials: On the Road to IPO, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Juner Juner's 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 Juner Juner's to increase its market reach. Juner Juner's 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Juner Juner's 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.
Leveraging digital technologies
– Juner Juner's can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Threats Juner New Materials: On the Road to IPO External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Juner New Materials: On the Road to IPO are -
Consumer confidence and its impact on Juner Juner's demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
High dependence on third party suppliers
– Juner Juner's high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Shortening product life cycle
– it is one of the major threat that Juner Juner's is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Juner Juner's in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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.
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 Juner Juner's business can come under increasing regulations regarding data privacy, data security, etc.
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. Juner Juner's needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Juner Juner's can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Juner New Materials: On the Road to IPO .
Increasing wage structure of Juner Juner's
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Juner Juner's.
Technology acceleration in Forth Industrial Revolution
– Juner Juner's has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Juner Juner's needs to keep up with the evolution of technology in the Innovation & Entrepreneurship sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Regulatory challenges
– Juner Juner's 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 Juner New Materials: On the Road to IPO, Juner Juner's 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 .
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 Juner Juner's.
Weighted SWOT Analysis of Juner New Materials: On the Road to IPO 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 Juner New Materials: On the Road to IPO 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 Juner New Materials: On the Road to IPO 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 Juner New Materials: On the Road to IPO 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 Juner New Materials: On the Road to IPO 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 Juner Juner's needs to make to build a sustainable competitive advantage.
