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 - – cloud computing is disrupting traditional business models, increasing energy prices, wage bills are increasing, central banks are concerned over increasing inflation, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices,
challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, 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 -
Highly skilled collaborators
– Juner Juner's 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 Juner New Materials: On the Road to IPO HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Juner Juner's 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 Juner Juner's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Juner New Materials: On the Road to IPO Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Juner Juner's is one of the leading recruiters in the industry. Managers in the Juner New Materials: On the Road to IPO are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
Strong track record of project management
– Juner Juner's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
Training and development
– Juner Juner's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Juner New Materials: On the Road to IPO 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.
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.
High switching costs
– The high switching costs that Juner Juner's 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 lead change in Innovation & Entrepreneurship field
– Juner Juner's 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 Juner Juner's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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 -
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.
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.
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.
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.
Lack of clear differentiation of Juner Juner's products
– To increase the profitability and margins on the products, Juner Juner's needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Juner Juner's 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 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.
Low market penetration in new markets
– Outside its home market of Juner Juner's, firm in the HBR case study Juner New Materials: On the Road to IPO needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Aligning sales with marketing
– It come across in the case study Juner New Materials: On the Road to IPO 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 Juner New Materials: On the Road to IPO can leverage the sales team experience to cultivate customer relationships as Juner Juner's is planning to shift buying processes online.
Products dominated business model
– Even though Juner Juner's has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Juner New Materials: On the Road to IPO should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Juner New Materials: On the Road to IPO 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 Juner Juner's has relatively successful track record of launching new products.
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 -
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.
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.
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.
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.
Manufacturing automation
– Juner Juner's 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.
Using analytics as competitive advantage
– Juner Juner's 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 Juner New Materials: On the Road to IPO - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Juner Juner's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Juner Juner's 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.
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.
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.
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.
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.
Creating value in data economy
– The success of analytics program of Juner Juner's has opened avenues for new revenue streams for the organization in the industry. This can help Juner Juner's to build a more holistic ecosystem as suggested in the Juner New Materials: On the Road to IPO case study. Juner Juner's 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. Juner Juner's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 -
Stagnating economy with rate increase
– Juner Juner's 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.
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.
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.
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.
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 .
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. Juner Juner's 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Juner Juner's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Juner Juner's needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Juner Juner's can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
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.
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.
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.
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.