GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy?
This case describes the experience of a wholly foreign-owned manufacturing company in Tianjin/China regarding the use of its ERP system in its main functional departments, purchasing, production planning, sales/distribution, and finance. The company is part of a group which is a global leader in the manufacturing and distribution of mechanical devices, called gearboxes, that are needed to drive a wide range of facilities such as escalators and baggage conveyor belts in airports. It has entered China in 1995 and the Tianjin manufacturing facility has soon become a hub for the Asian market. The main challenge confronting the management team is to support the breakneck growth rate of this young company. The company's ERP system plays a crucial role in this task. However, it seems that middle managers are frequently hitting an invisible wall when trying to expand the use of the ERP system in order to cope with ever-increasing workloads and coordination tasks. This case serves to illustrate cultural issues implicated in the use of an enterprise wide information system in a medium size company operating in an emerging market economy. In addition, issues of operations management, global management, and organizational behaviour are addressed.
Swot Analysis of "GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy?" written by Kai Reimers includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Erp Tianjin facing as an external strategic factors. Some of the topics covered in GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy? case study are - Strategic Management Strategies, Manufacturing and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy? casestudy better are - – increasing commodity prices, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, increasing energy prices, central banks are concerned over increasing inflation, challanges to central banks by blockchain based private currencies,
increasing transportation and logistics costs, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Erp Tianjin, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Erp Tianjin 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 GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy? can be done for the following purposes –
1. Strategic planning using facts provided in GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy? case study
2. Improving business portfolio management of Erp Tianjin
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 Erp Tianjin
Strengths GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Erp Tianjin in GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy? Harvard Business Review case study are -
Strong track record of project management
– Erp Tianjin is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Erp Tianjin in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Erp Tianjin 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 GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Erp Tianjin is one of the leading recruiters in the industry. Managers in the GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy? are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Leadership & Managing People industry
– GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy? firm has clearly differentiated products in the market place. This has enabled Erp Tianjin to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Erp Tianjin to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Erp Tianjin 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 GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Erp Tianjin in the sector have low bargaining power. GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Erp Tianjin to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Erp Tianjin has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Ability to lead change in Leadership & Managing People field
– Erp Tianjin 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 Erp Tianjin in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Erp Tianjin is present in almost all the verticals within the industry. This has provided firm in GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy? 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.
Training and development
– Erp Tianjin has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy? 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.
Learning organization
- Erp Tianjin 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 Erp Tianjin is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy? are -
Skills based hiring
– The stress on hiring functional specialists at Erp Tianjin 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.
Increasing silos among functional specialists
– The organizational structure of Erp Tianjin is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Erp Tianjin needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Erp Tianjin to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy? HBR case study mentions - Erp Tianjin 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy?, it seems that the employees of Erp Tianjin 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.
Slow decision making process
– As mentioned earlier in the report, Erp Tianjin 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. Erp Tianjin 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.
Products dominated business model
– Even though Erp Tianjin 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 - GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy? should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– After analyzing the HBR case study GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy?, 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Erp Tianjin is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy? can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High operating costs
– Compare to the competitors, firm in the HBR case study GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy? 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 Erp Tianjin 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Erp Tianjin 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy?, is just above the industry average. Erp Tianjin 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.
Opportunities GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy? | 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 GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy? are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Erp Tianjin 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, GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Erp Tianjin 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
– Erp Tianjin can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy? 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.
Using analytics as competitive advantage
– Erp Tianjin 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 GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Erp Tianjin to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Erp Tianjin can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Erp Tianjin 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. Erp Tianjin 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.
Building a culture of innovation
– managers at Erp Tianjin 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.
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. Erp Tianjin can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Erp Tianjin 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.
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 Erp Tianjin 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.
Leveraging digital technologies
– Erp Tianjin 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.
Manufacturing automation
– Erp Tianjin 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.
Loyalty marketing
– Erp Tianjin 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.
Threats GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy? are -
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 Erp Tianjin.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Erp Tianjin with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Erp Tianjin is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Erp Tianjin 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 GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy? .
Environmental challenges
– Erp Tianjin 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. Erp Tianjin can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Technology acceleration in Forth Industrial Revolution
– Erp Tianjin has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Erp Tianjin 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Erp Tianjin 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.
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. Erp Tianjin 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.
High dependence on third party suppliers
– Erp Tianjin 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.
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 Erp Tianjin business can come under increasing regulations regarding data privacy, data security, etc.
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 Erp Tianjin in the Leadership & Managing People sector and impact the bottomline of the organization.
Increasing wage structure of Erp Tianjin
– 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 Erp Tianjin.
Weighted SWOT Analysis of GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy? 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 GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy? 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 GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy? 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 GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy? 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 GEARBOX (China) Ltd.: Will the Company's ERP System Support Its Ambitious Growth Strategy? 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 Erp Tianjin needs to make to build a sustainable competitive advantage.
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