Hailing a New Era: Haier in Japan (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Hailing a New Era: Haier in Japan (A)
Founded in 1984 by Zhang Ruimin, current CEO of the company, Haier has rapidly grown from a small refrigerator plant in Qingdao, China, to a global leader in home appliances. As one of the most valuable brands in China, Haier designs, manufactures and sells various home appliances including refrigerators, air conditioners and washing machines in over 100 countries.Since 2006, Haier has aggressively expanded its international presence, aiming to turn each localized brand into a mainstream product in its respective market. In line with this strategy, in January 2012 Haier acquired the home appliances business of its long-term partner Sanyo both in Japan and in Southeast Asia, directly challenging dominant market players such as Panasonic, Sharp and Mitsubishi.In addition to addressing potential cultural differences between China and Japan and retaining former Sanyo employees after the acquisition, Haier needed to instill its new management system that CEO Zhang put in place in 2007. Haier had always promoted a performance-driven culture emphasizing individual responsibility and meritocracy.Recently, Haier developed a management system consisting of an inverted organizational triangle with self-managed units. This structure put employees in direct contact with clients and empowered them to take initiative to serve the market instead of responding to orders from a boss. Furthermore, if their performance was superior, young talent could be readily promoted to higher positions than longer-tenured colleagues. However, Haier faced the challenge of this system being at odds with the Japanese tradition of equality, seniority and lifelong employment. Therefore, Japanese workers had difficulty not only understanding but also implementing this innovative system.
Authors :: Carlos Sanchez-Runde Sanchez, Yih-teen Lee, Sebastian Reiche, Yen-Tung Chen
Swot Analysis of "Hailing a New Era: Haier in Japan (A)" written by Carlos Sanchez-Runde Sanchez, Yih-teen Lee, Sebastian Reiche, Yen-Tung Chen includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Haier Appliances facing as an external strategic factors. Some of the topics covered in Hailing a New Era: Haier in Japan (A) case study are - Strategic Management Strategies, Cross-cultural management, Human resource management, Leadership, Mergers & acquisitions and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Hailing a New Era: Haier in Japan (A) casestudy better are - – there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%,
increasing commodity prices, geopolitical disruptions, etc
Introduction to SWOT Analysis of Hailing a New Era: Haier in Japan (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hailing a New Era: Haier in Japan (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Haier Appliances, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Haier Appliances 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 Hailing a New Era: Haier in Japan (A) can be done for the following purposes –
1. Strategic planning using facts provided in Hailing a New Era: Haier in Japan (A) case study
2. Improving business portfolio management of Haier Appliances
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 Haier Appliances
Strengths Hailing a New Era: Haier in Japan (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Haier Appliances in Hailing a New Era: Haier in Japan (A) Harvard Business Review case study are -
Ability to lead change in Leadership & Managing People field
– Haier Appliances 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 Haier Appliances in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Haier Appliances 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.
Learning organization
- Haier Appliances 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 Haier Appliances is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Hailing a New Era: Haier in Japan (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Haier Appliances digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Haier Appliances 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.
Innovation driven organization
– Haier Appliances is one of the most innovative firm in sector. Manager in Hailing a New Era: Haier in Japan (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Cross disciplinary teams
– Horizontal connected teams at the Haier Appliances 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.
Effective Research and Development (R&D)
– Haier Appliances 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 Hailing a New Era: Haier in Japan (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Haier Appliances 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 Carlos Sanchez-Runde Sanchez, Yih-teen Lee, Sebastian Reiche, Yen-Tung Chen 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.
Training and development
– Haier Appliances has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Hailing a New Era: Haier in Japan (A) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Organizational Resilience of Haier Appliances
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Haier Appliances does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Haier Appliances has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Haier Appliances 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.
Superior customer experience
– The customer experience strategy of Haier Appliances in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Hailing a New Era: Haier in Japan (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hailing a New Era: Haier in Japan (A) are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Haier Appliances is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Hailing a New Era: Haier in Japan (A) 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 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 Haier Appliances supply chain. Even after few cautionary changes mentioned in the HBR case study - Hailing a New Era: Haier in Japan (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Haier Appliances vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Hailing a New Era: Haier in Japan (A), is just above the industry average. Haier Appliances 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.
High cash cycle compare to competitors
Haier Appliances 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.
Lack of clear differentiation of Haier Appliances products
– To increase the profitability and margins on the products, Haier Appliances needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study Hailing a New Era: Haier in Japan (A) 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 Haier Appliances 's lucrative customers.
Slow to strategic competitive environment developments
– As Hailing a New Era: Haier in Japan (A) HBR case study mentions - Haier Appliances 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.
Slow decision making process
– As mentioned earlier in the report, Haier Appliances 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. Haier Appliances 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.
Aligning sales with marketing
– It come across in the case study Hailing a New Era: Haier in Japan (A) 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 Hailing a New Era: Haier in Japan (A) can leverage the sales team experience to cultivate customer relationships as Haier Appliances is planning to shift buying processes online.
Interest costs
– Compare to the competition, Haier Appliances has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Low market penetration in new markets
– Outside its home market of Haier Appliances, firm in the HBR case study Hailing a New Era: Haier in Japan (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Hailing a New Era: Haier in Japan (A) | 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 Hailing a New Era: Haier in Japan (A) are -
Leveraging digital technologies
– Haier Appliances 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Haier Appliances 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 Haier Appliances to hire the very best people irrespective of their geographical location.
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. Haier Appliances can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Haier Appliances 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 Hailing a New Era: Haier in Japan (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Haier Appliances to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Haier Appliances 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, Hailing a New Era: Haier in Japan (A), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Haier Appliances can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Haier Appliances can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Hailing a New Era: Haier in Japan (A) 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.
Better consumer reach
– The expansion of the 5G network will help Haier Appliances to increase its market reach. Haier Appliances 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.
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. Haier Appliances 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. Haier Appliances 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.
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 Haier Appliances in the consumer business. Now Haier Appliances can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Haier Appliances 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Haier Appliances can use these opportunities to build new business models that can help the communities that Haier Appliances operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Haier Appliances 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 Hailing a New Era: Haier in Japan (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Hailing a New Era: Haier in Japan (A) are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Haier Appliances 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.
High dependence on third party suppliers
– Haier Appliances 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.
Regulatory challenges
– Haier Appliances 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.
Increasing wage structure of Haier Appliances
– 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 Haier Appliances.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Haier Appliances 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 Haier Appliances is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Haier Appliances business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Haier Appliances 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. Haier Appliances can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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 Haier Appliances in the Leadership & Managing People sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Haier Appliances 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Hailing a New Era: Haier in Japan (A), Haier Appliances 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 .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Haier Appliances 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 Hailing a New Era: Haier in Japan (A) .
Technology acceleration in Forth Industrial Revolution
– Haier Appliances has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Haier Appliances 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.
Weighted SWOT Analysis of Hailing a New Era: Haier in Japan (A) 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 Hailing a New Era: Haier in Japan (A) 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 Hailing a New Era: Haier in Japan (A) 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 Hailing a New Era: Haier in Japan (A) 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 Hailing a New Era: Haier in Japan (A) 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 Haier Appliances needs to make to build a sustainable competitive advantage.