China Sourcing Group: Delivering on Time SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of China Sourcing Group: Delivering on Time
In 2004, U.S.-based China Sourcing Group, which specialises in premium and gift products, established a sourcing office in Shanghai. The Shanghai office was responsible for sourcing vendors not only in China but also in southern Asia. It played a major role in quadrupling China Sourcing Group's revenues over the next four years. Despite its contribution to the group, the Shanghai office faced a major issue of frequent late deliveries, especially of new products that were developed from scratch. In 2009, as the Shanghai management team reviewed the performance of the sourcing office, it decided that something had to be done to improve the punctuality of that office's deliveries. What should the Shanghai office do to improve the situation?
Swot Analysis of "China Sourcing Group: Delivering on Time" written by Neale O'Connor includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Sourcing Shanghai facing as an external strategic factors. Some of the topics covered in China Sourcing Group: Delivering on Time case study are - Strategic Management Strategies, Balanced scorecard, Project management, Supply chain and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the China Sourcing Group: Delivering on Time casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, increasing commodity prices, increasing transportation and logistics costs, there is backlash against globalization,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, etc
Introduction to SWOT Analysis of China Sourcing Group: Delivering on Time
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in China Sourcing Group: Delivering on Time case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Sourcing Shanghai, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Sourcing Shanghai 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 China Sourcing Group: Delivering on Time can be done for the following purposes –
1. Strategic planning using facts provided in China Sourcing Group: Delivering on Time case study
2. Improving business portfolio management of Sourcing Shanghai
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Sourcing Shanghai
Strengths China Sourcing Group: Delivering on Time | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Sourcing Shanghai in China Sourcing Group: Delivering on Time Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Sourcing Shanghai in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the China Sourcing Group: Delivering on Time 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.
Innovation driven organization
– Sourcing Shanghai is one of the most innovative firm in sector. Manager in China Sourcing Group: Delivering on Time Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Sourcing Shanghai is one of the leading recruiters in the industry. Managers in the China Sourcing Group: Delivering on Time are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Sourcing Shanghai has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Sourcing Shanghai 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
– Sourcing Shanghai is present in almost all the verticals within the industry. This has provided firm in China Sourcing Group: Delivering on Time 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.
Highly skilled collaborators
– Sourcing Shanghai 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 China Sourcing Group: Delivering on Time HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Sourcing Shanghai 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 Neale O'Connor 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)
– Sourcing Shanghai 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 China Sourcing Group: Delivering on Time - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Sourcing Shanghai digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Sourcing Shanghai 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.
Low bargaining power of suppliers
– Suppliers of Sourcing Shanghai in the sector have low bargaining power. China Sourcing Group: Delivering on Time has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Sourcing Shanghai to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Sourcing Shanghai has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Sourcing Shanghai to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses China Sourcing Group: Delivering on Time | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of China Sourcing Group: Delivering on Time are -
Aligning sales with marketing
– It come across in the case study China Sourcing Group: Delivering on Time 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 China Sourcing Group: Delivering on Time can leverage the sales team experience to cultivate customer relationships as Sourcing Shanghai is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, Neale O'Connor suggests that, Sourcing Shanghai 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.
Low market penetration in new markets
– Outside its home market of Sourcing Shanghai, firm in the HBR case study China Sourcing Group: Delivering on Time needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring
– The stress on hiring functional specialists at Sourcing Shanghai has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High 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 Sourcing Shanghai supply chain. Even after few cautionary changes mentioned in the HBR case study - China Sourcing Group: Delivering on Time, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Sourcing Shanghai vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Sourcing Shanghai 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 - China Sourcing Group: Delivering on Time 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 China Sourcing Group: Delivering on Time 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 Sourcing Shanghai has relatively successful track record of launching new products.
No frontier risks strategy
– After analyzing the HBR case study China Sourcing Group: Delivering on Time, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People 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 cash cycle compare to competitors
Sourcing Shanghai has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High operating costs
– Compare to the competitors, firm in the HBR case study China Sourcing Group: Delivering on Time 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 Sourcing Shanghai 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Sourcing Shanghai is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Sourcing Shanghai needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Sourcing Shanghai to focus more on services rather than just following the product oriented approach.
Opportunities China Sourcing Group: Delivering on Time | 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 China Sourcing Group: Delivering on Time are -
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 Sourcing Shanghai in the consumer business. Now Sourcing Shanghai can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Sourcing Shanghai 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 China Sourcing Group: Delivering on Time - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Sourcing Shanghai to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Sourcing Shanghai 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Sourcing Shanghai can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Sourcing Shanghai 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.
Learning at scale
– Online learning technologies has now opened space for Sourcing Shanghai 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Sourcing Shanghai 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.
Buying journey improvements
– Sourcing Shanghai can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. China Sourcing Group: Delivering on Time 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.
Building a culture of innovation
– managers at Sourcing Shanghai 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 Leadership & Managing People segment.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Sourcing Shanghai can use these opportunities to build new business models that can help the communities that Sourcing Shanghai operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Sourcing Shanghai is facing challenges because of the dominance of functional experts in the organization. China Sourcing Group: Delivering on Time 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. Sourcing Shanghai can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Sourcing Shanghai has opened avenues for new revenue streams for the organization in the industry. This can help Sourcing Shanghai to build a more holistic ecosystem as suggested in the China Sourcing Group: Delivering on Time case study. Sourcing Shanghai can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats China Sourcing Group: Delivering on Time External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study China Sourcing Group: Delivering on Time are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Sourcing Shanghai with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Sourcing Shanghai 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. Sourcing Shanghai can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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.
High dependence on third party suppliers
– Sourcing Shanghai 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.
Consumer confidence and its impact on Sourcing Shanghai 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.
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 Sourcing Shanghai.
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. Sourcing Shanghai needs to understand the core reasons impacting the Leadership & Managing People 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, Sourcing Shanghai 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 China Sourcing Group: Delivering on Time .
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Sourcing Shanghai in the Leadership & Managing People sector and impact the bottomline of the organization.
Regulatory challenges
– Sourcing Shanghai 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 Leadership & Managing People industry regulations.
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 Sourcing Shanghai business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Sourcing Shanghai has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Sourcing Shanghai needs to keep up with the evolution of technology in the Leadership & Managing People 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.
Stagnating economy with rate increase
– Sourcing Shanghai 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.
Weighted SWOT Analysis of China Sourcing Group: Delivering on Time 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 China Sourcing Group: Delivering on Time 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 China Sourcing Group: Delivering on Time 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 China Sourcing Group: Delivering on Time 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 China Sourcing Group: Delivering on Time 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 Sourcing Shanghai needs to make to build a sustainable competitive advantage.