Tethia Lungmeng: Making Stone from Paper SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Tethia Lungmeng: Making Stone from Paper
On 18 Feb 2011, paper made from stone rolled off from a factory in the city of Huaibei, makingTethia Lungmeng Environmental Friendly Products Co. Ltd. (TLMa??e??e??c?Y) the first company to produce commercial stone paper in China. TLM's founder and chairman, Kong Ling Fa, (a??a??a??) gave his visitors his stone paper business card and put one business card into a glass of water. Half an hour into the conversation, he pulled out the card, shook off the water and passed it around. The stone paper business card felt the same as ordinary paper and yet was completely waterproof. Stone paper is paper made from limestone, which is an abundant raw material. Kong felt that he was breaking new ground with this new material, and that it had commercial potential. He believed that stone paper's potential goes beyond replacing traditional paper. How readily would consumers accept it? How should TLM promote the value and potential of stone paper? Which markets should he target? Should TLM focus on China or reach out to more developed countries in the West? What would be the appropriate business model? TLM licensed the technology from Taiwan and had exclusive rights only in Anhui province. Although TLM was the first to produce stone paper commercially, three other companies were in the process of starting up production. How should TLM exploit its first-mover advantage? How should TLM develop the resources and strategic capabilities to ensure success? How could it leverage on the reputation and experience that Kong and TLM had accumulated over the years? Was it sustainable?
Swot Analysis of "Tethia Lungmeng: Making Stone from Paper" written by Boon Siong Neo, Soon Ang, Gillian Yeo, Cheryl Lim includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tlm Stone facing as an external strategic factors. Some of the topics covered in Tethia Lungmeng: Making Stone from Paper case study are - Strategic Management Strategies, Growth strategy and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Tethia Lungmeng: Making Stone from Paper casestudy better are - – increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, supply chains are disrupted by pandemic , increasing household debt because of falling income levels, there is backlash against globalization, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%,
increasing energy prices, technology disruption, etc
Introduction to SWOT Analysis of Tethia Lungmeng: Making Stone from Paper
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Tethia Lungmeng: Making Stone from Paper case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tlm Stone, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tlm Stone 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 Tethia Lungmeng: Making Stone from Paper can be done for the following purposes –
1. Strategic planning using facts provided in Tethia Lungmeng: Making Stone from Paper case study
2. Improving business portfolio management of Tlm Stone
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 Tlm Stone
Strengths Tethia Lungmeng: Making Stone from Paper | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tlm Stone in Tethia Lungmeng: Making Stone from Paper Harvard Business Review case study are -
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Tethia Lungmeng: Making Stone from Paper firm has clearly differentiated products in the market place. This has enabled Tlm Stone to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Tlm Stone to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Tlm Stone in the sector have low bargaining power. Tethia Lungmeng: Making Stone from Paper has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tlm Stone to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Tlm Stone 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 Tethia Lungmeng: Making Stone from Paper - 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
- Tlm Stone 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 Tlm Stone is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Tethia Lungmeng: Making Stone from Paper Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Tlm Stone is one of the most innovative firm in sector. Manager in Tethia Lungmeng: Making Stone from Paper Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Tlm Stone in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Tlm Stone has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Tlm Stone to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Tlm Stone has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Tethia Lungmeng: Making Stone from Paper 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.
Organizational Resilience of Tlm Stone
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Tlm Stone does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the Tethia Lungmeng: Making Stone from Paper 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.
Successful track record of launching new products
– Tlm Stone has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Tlm Stone 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.
Diverse revenue streams
– Tlm Stone is present in almost all the verticals within the industry. This has provided firm in Tethia Lungmeng: Making Stone from Paper 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.
Weaknesses Tethia Lungmeng: Making Stone from Paper | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Tethia Lungmeng: Making Stone from Paper are -
High cash cycle compare to competitors
Tlm Stone 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.
Need for greater diversity
– Tlm Stone 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.
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 Tlm Stone supply chain. Even after few cautionary changes mentioned in the HBR case study - Tethia Lungmeng: Making Stone from Paper, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Tlm Stone 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 Tethia Lungmeng: Making Stone from Paper 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 Tlm Stone has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Tlm Stone has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Capital Spending Reduction
– Even during the low interest decade, Tlm Stone 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.
Slow to strategic competitive environment developments
– As Tethia Lungmeng: Making Stone from Paper HBR case study mentions - Tlm Stone takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Low market penetration in new markets
– Outside its home market of Tlm Stone, firm in the HBR case study Tethia Lungmeng: Making Stone from Paper needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Tlm Stone is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Tethia Lungmeng: Making Stone from Paper can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– It come across in the case study Tethia Lungmeng: Making Stone from Paper 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 Tethia Lungmeng: Making Stone from Paper can leverage the sales team experience to cultivate customer relationships as Tlm Stone is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Tlm Stone 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. Tlm Stone 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.
Opportunities Tethia Lungmeng: Making Stone from Paper | 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 Tethia Lungmeng: Making Stone from Paper are -
Learning at scale
– Online learning technologies has now opened space for Tlm Stone 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.
Using analytics as competitive advantage
– Tlm Stone 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 Tethia Lungmeng: Making Stone from Paper - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Tlm Stone to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Tlm Stone 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, Tlm Stone is facing challenges because of the dominance of functional experts in the organization. Tethia Lungmeng: Making Stone from Paper 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.
Buying journey improvements
– Tlm Stone can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Tethia Lungmeng: Making Stone from Paper 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Tlm Stone can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Tlm Stone 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.
Better consumer reach
– The expansion of the 5G network will help Tlm Stone to increase its market reach. Tlm Stone 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.
Manufacturing automation
– Tlm Stone 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.
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 Tlm Stone in the consumer business. Now Tlm Stone can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Tlm Stone 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, Tethia Lungmeng: Making Stone from Paper, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Tlm Stone can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Tlm Stone can use these opportunities to build new business models that can help the communities that Tlm Stone operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Threats Tethia Lungmeng: Making Stone from Paper External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Tethia Lungmeng: Making Stone from Paper are -
Environmental challenges
– Tlm Stone 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. Tlm Stone can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Tlm Stone 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Tlm Stone 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 Tethia Lungmeng: Making Stone from Paper .
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. Tlm Stone 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.
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 Tlm Stone.
High dependence on third party suppliers
– Tlm Stone 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.
Technology acceleration in Forth Industrial Revolution
– Tlm Stone has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Tlm Stone 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.
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.
Shortening product life cycle
– it is one of the major threat that Tlm Stone is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Tlm Stone with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Tethia Lungmeng: Making Stone from Paper, Tlm Stone 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 .
Regulatory challenges
– Tlm Stone 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. Tlm Stone needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Tethia Lungmeng: Making Stone from Paper 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 Tethia Lungmeng: Making Stone from Paper 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 Tethia Lungmeng: Making Stone from Paper 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 Tethia Lungmeng: Making Stone from Paper 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 Tethia Lungmeng: Making Stone from Paper 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 Tlm Stone needs to make to build a sustainable competitive advantage.
