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 - – supply chains are disrupted by pandemic , increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, talent flight as more people leaving formal jobs, increasing commodity prices, there is backlash against globalization,
increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, 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 -
Training and development
– Sourcing Shanghai has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in China Sourcing Group: Delivering on Time 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– China Sourcing Group: Delivering on Time firm has clearly differentiated products in the market place. This has enabled Sourcing Shanghai to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Sourcing Shanghai to invest into research and development (R&D) and innovation.
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Sourcing Shanghai 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 lead change in Leadership & Managing People field
– Sourcing Shanghai 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 Sourcing Shanghai in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
High switching costs
– The high switching costs that Sourcing Shanghai 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.
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.
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.
Strong track record of project management
– Sourcing Shanghai is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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 -
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.
Lack of clear differentiation of Sourcing Shanghai products
– To increase the profitability and margins on the products, Sourcing Shanghai needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Sourcing Shanghai 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.
Slow to strategic competitive environment developments
– As China Sourcing Group: Delivering on Time HBR case study mentions - Sourcing Shanghai 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study China Sourcing Group: Delivering on Time, is just above the industry average. Sourcing Shanghai 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.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study China Sourcing Group: Delivering on Time, it seems that the employees of Sourcing Shanghai 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.
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.
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.
Capital Spending Reduction
– Even during the low interest decade, Sourcing Shanghai 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.
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 -
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.
Manufacturing automation
– Sourcing Shanghai can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
Developing new processes and practices
– Sourcing Shanghai can develop new processes and procedures in Leadership & Managing People 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Sourcing Shanghai in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Sourcing Shanghai 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 Sourcing Shanghai to hire the very best people irrespective of their geographical location.
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.
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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Sourcing Shanghai 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, China Sourcing Group: Delivering on Time, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Sourcing Shanghai 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. Sourcing Shanghai 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Sourcing Shanghai can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Sourcing Shanghai to increase its market reach. Sourcing Shanghai 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.
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 -
Increasing wage structure of Sourcing Shanghai
– 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 Sourcing Shanghai.
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 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Sourcing Shanghai in the Leadership & Managing People industry. The Leadership & Managing People 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.
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 Sourcing Shanghai is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Sourcing Shanghai can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study China Sourcing Group: Delivering on Time, Sourcing Shanghai may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
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.
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.