Kunshan, Incorporated: The Making of China's Richest Town SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Kunshan, Incorporated: The Making of China's Richest Town
In 1980, the city of Kunshan was mere countryside, registering neither on the Chinese government's nor the international business community's radar. By 2010, Kunshan had become the richest city per capita in China and a global technology powerhouse, home to companies such as Foxconn, Compal Electronics, and Wistron. Kunshan's entrepreneurial, self-starting development combined with strategic location and high levels of local government support had been responsible for Kunshan's tremendous growth and success. How could it continue to grow at a rate to maintain its leadership among Chinese entrepreneurial cities? And would the founding of an international, joint-venture campus with Duke and Wuhan University keep the city of Kunshan innovative and ahead of the curve?
Authors :: William C. Kirby, Nora Bynum, Tracy Yuen Manty, Erica M Zendell
Swot Analysis of "Kunshan, Incorporated: The Making of China's Richest Town" written by William C. Kirby, Nora Bynum, Tracy Yuen Manty, Erica M Zendell includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Kunshan Kunshan's facing as an external strategic factors. Some of the topics covered in Kunshan, Incorporated: The Making of China's Richest Town case study are - Strategic Management Strategies, Cross-cultural management, Emerging markets, Entrepreneurship, Financial management, Global strategy, Government, Innovation, Leadership, Technology and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Kunshan, Incorporated: The Making of China's Richest Town casestudy better are - – increasing commodity prices, technology disruption, increasing household debt because of falling income levels, geopolitical disruptions, wage bills are increasing, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models,
customer relationship management is fast transforming because of increasing concerns over data privacy, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Kunshan, Incorporated: The Making of China's Richest Town
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Kunshan, Incorporated: The Making of China's Richest Town case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kunshan Kunshan's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kunshan Kunshan'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 Kunshan, Incorporated: The Making of China's Richest Town can be done for the following purposes –
1. Strategic planning using facts provided in Kunshan, Incorporated: The Making of China's Richest Town case study
2. Improving business portfolio management of Kunshan Kunshan'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 Kunshan Kunshan's
Strengths Kunshan, Incorporated: The Making of China's Richest Town | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kunshan Kunshan's in Kunshan, Incorporated: The Making of China's Richest Town Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Kunshan Kunshan's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Kunshan Kunshan'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.
Strong track record of project management
– Kunshan Kunshan'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.
Innovation driven organization
– Kunshan Kunshan's is one of the most innovative firm in sector. Manager in Kunshan, Incorporated: The Making of China's Richest Town Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Kunshan Kunshan'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 Kunshan Kunshan's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Kunshan, Incorporated: The Making of China's Richest Town Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Kunshan Kunshan'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.
Ability to recruit top talent
– Kunshan Kunshan's is one of the leading recruiters in the industry. Managers in the Kunshan, Incorporated: The Making of China's Richest Town 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
– Kunshan Kunshan's is present in almost all the verticals within the industry. This has provided firm in Kunshan, Incorporated: The Making of China's Richest Town 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 Kunshan Kunshan's in the sector have low bargaining power. Kunshan, Incorporated: The Making of China's Richest Town has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Kunshan Kunshan's to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Kunshan Kunshan's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Kunshan Kunshan'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.
Analytics focus
– Kunshan Kunshan'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 William C. Kirby, Nora Bynum, Tracy Yuen Manty, Erica M Zendell 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.
Effective Research and Development (R&D)
– Kunshan Kunshan'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 Kunshan, Incorporated: The Making of China's Richest Town - 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 Kunshan, Incorporated: The Making of China's Richest Town | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kunshan, Incorporated: The Making of China's Richest Town are -
No frontier risks strategy
– After analyzing the HBR case study Kunshan, Incorporated: The Making of China's Richest Town, 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.
Low market penetration in new markets
– Outside its home market of Kunshan Kunshan's, firm in the HBR case study Kunshan, Incorporated: The Making of China's Richest Town needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Kunshan Kunshan's supply chain. Even after few cautionary changes mentioned in the HBR case study - Kunshan, Incorporated: The Making of China's Richest Town, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Kunshan Kunshan's vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study Kunshan, Incorporated: The Making of China's Richest Town 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 Kunshan Kunshan's 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, William C. Kirby, Nora Bynum, Tracy Yuen Manty, Erica M Zendell suggests that, Kunshan Kunshan'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.
Increasing silos among functional specialists
– The organizational structure of Kunshan Kunshan's is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Kunshan Kunshan's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Kunshan Kunshan's to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Kunshan, Incorporated: The Making of China's Richest Town, is just above the industry average. Kunshan Kunshan'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.
Capital Spending Reduction
– Even during the low interest decade, Kunshan Kunshan'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.
Workers concerns about automation
– As automation is fast increasing in the segment, Kunshan Kunshan's needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Aligning sales with marketing
– It come across in the case study Kunshan, Incorporated: The Making of China's Richest Town 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 Kunshan, Incorporated: The Making of China's Richest Town can leverage the sales team experience to cultivate customer relationships as Kunshan Kunshan's is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Kunshan, Incorporated: The Making of China's Richest Town, it seems that the employees of Kunshan Kunshan'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.
Opportunities Kunshan, Incorporated: The Making of China's Richest Town | 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 Kunshan, Incorporated: The Making of China's Richest Town are -
Better consumer reach
– The expansion of the 5G network will help Kunshan Kunshan's to increase its market reach. Kunshan Kunshan'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.
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. Kunshan Kunshan's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Kunshan Kunshan's can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Innovation & Entrepreneurship segment.
Manufacturing automation
– Kunshan Kunshan'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.
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. Kunshan Kunshan's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Kunshan Kunshan'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.
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 Kunshan Kunshan's in the consumer business. Now Kunshan Kunshan's can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Kunshan Kunshan'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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Kunshan Kunshan's can use these opportunities to build new business models that can help the communities that Kunshan Kunshan's operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Developing new processes and practices
– Kunshan Kunshan'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.
Buying journey improvements
– Kunshan Kunshan's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Kunshan, Incorporated: The Making of China's Richest Town 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.
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. Kunshan Kunshan's 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. Kunshan Kunshan's 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Kunshan Kunshan'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.
Threats Kunshan, Incorporated: The Making of China's Richest Town External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Kunshan, Incorporated: The Making of China's Richest Town are -
Technology acceleration in Forth Industrial Revolution
– Kunshan Kunshan's has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Kunshan Kunshan'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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Kunshan, Incorporated: The Making of China's Richest Town, Kunshan Kunshan'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 .
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 Kunshan Kunshan'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 Kunshan Kunshan'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.
Stagnating economy with rate increase
– Kunshan Kunshan'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.
Regulatory challenges
– Kunshan Kunshan'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.
Environmental challenges
– Kunshan Kunshan'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. Kunshan Kunshan's can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Kunshan Kunshan's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Kunshan Kunshan'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 Kunshan Kunshan'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 Kunshan Kunshan's.
High dependence on third party suppliers
– Kunshan Kunshan'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.
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. Kunshan Kunshan'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.
Weighted SWOT Analysis of Kunshan, Incorporated: The Making of China's Richest Town 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 Kunshan, Incorporated: The Making of China's Richest Town 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 Kunshan, Incorporated: The Making of China's Richest Town 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 Kunshan, Incorporated: The Making of China's Richest Town 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 Kunshan, Incorporated: The Making of China's Richest Town 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 Kunshan Kunshan's needs to make to build a sustainable competitive advantage.
