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 - – increasing government debt because of Covid-19 spendings, technology disruption, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, supply chains are disrupted by pandemic , wage bills are increasing,
competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, 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 -
Diverse revenue streams
– Haier Appliances is present in almost all the verticals within the industry. This has provided firm in Hailing a New Era: Haier in Japan (A) 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
– Haier Appliances 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 Hailing a New Era: Haier in Japan (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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.
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.
Operational resilience
– The operational resilience strategy in the Hailing a New Era: Haier in Japan (A) 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 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.
Strong track record of project management
– Haier Appliances is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
High brand equity
– Haier Appliances has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Haier Appliances to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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 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.
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.
Increasing silos among functional specialists
– The organizational structure of Haier Appliances is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Haier Appliances needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Haier Appliances to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Hailing a New Era: Haier in Japan (A), in the dynamic environment Haier Appliances has struggled to respond to the nimble upstart competition. Haier Appliances has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Hailing a New Era: Haier in Japan (A) 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 Haier Appliances has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Haier Appliances 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.
Products dominated business model
– Even though Haier Appliances 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 - Hailing a New Era: Haier in Japan (A) should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Hailing a New Era: Haier in Japan (A), it seems that the employees of Haier Appliances 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 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.
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.
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 -
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 Haier Appliances 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.
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.
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.
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. Haier Appliances can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Haier Appliances 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.
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.
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.
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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Haier Appliances is facing challenges because of the dominance of functional experts in the organization. Hailing a New Era: Haier in Japan (A) 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.
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.
Creating value in data economy
– The success of analytics program of Haier Appliances has opened avenues for new revenue streams for the organization in the industry. This can help Haier Appliances to build a more holistic ecosystem as suggested in the Hailing a New Era: Haier in Japan (A) case study. Haier Appliances can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
Building a culture of innovation
– managers at Haier Appliances 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.
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 -
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. Haier Appliances can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 .
Consumer confidence and its impact on Haier Appliances 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.
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.
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.
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.
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.
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. Haier Appliances 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.
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.
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.
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.
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.
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 Haier Appliances.
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.
