Case Study Description of Cheung Yan: China's Paper Queen
Cheung Yan, the chairperson and co-founder of the Nine Dragons Paper Holdings Company ("Nine Dragons") has been globally recognized as one of the foremost strategic business leaders of Asia. Cheung had started off modestly in 1990, by setting up a paper-recycling unit in the US, called America Chung Nam. This unit collected waste paper from the US and shipped it to China. By 1995, Cheung had recognized the huge opportunity for paper manufacturing in China, given its ever-rising demand for export packaging. With the support of her husband and brother, she returned to China and established Nine Dragons, which started off with two paper machines and made 600,000 tons of kraft linerboard per year. By June 2007, the company was a behemoth paper powerhouse, with 13 giant paper-making machines, about 8,600 full-time employees, US$1.4 billion in annual revenue and US$300 million in profits. With a huge expansion program in place, it was expected that by 2009, Nine Dragons would be Asia's top producer of packaging paper, and the first in the world in terms of production capacity. In a male-dominated industry of Asia, how has Cheung succeeded in being celebrated globally as a business leader? What are the qualities and abilities she possesses that have made her such an effective strategic leader?
Swot Analysis of "Cheung Yan: China's Paper Queen" written by Stephen Ko, Havovi Joshi includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Paper Cheung facing as an external strategic factors. Some of the topics covered in Cheung Yan: China's Paper Queen case study are - Strategic Management Strategies, Gender, Leadership, Operations management, Organizational culture, Performance measurement and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Cheung Yan: China's Paper Queen casestudy better are - – digital marketing is dominated by two big players Facebook and Google, technology disruption, cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China,
increasing energy prices, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Cheung Yan: China's Paper Queen
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Cheung Yan: China's Paper Queen case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Paper Cheung, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Paper Cheung 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 Cheung Yan: China's Paper Queen can be done for the following purposes –
1. Strategic planning using facts provided in Cheung Yan: China's Paper Queen case study
2. Improving business portfolio management of Paper Cheung
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 Paper Cheung
Strengths Cheung Yan: China's Paper Queen | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Paper Cheung in Cheung Yan: China's Paper Queen Harvard Business Review case study are -
Effective Research and Development (R&D)
– Paper Cheung 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 Cheung Yan: China's Paper Queen - 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 Paper Cheung in the sector have low bargaining power. Cheung Yan: China's Paper Queen has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Paper Cheung to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Paper Cheung has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Paper Cheung to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Paper Cheung is one of the leading recruiters in the industry. Managers in the Cheung Yan: China's Paper Queen are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Cheung Yan: China's Paper Queen 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.
Training and development
– Paper Cheung has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Cheung Yan: China's Paper Queen 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.
Analytics focus
– Paper Cheung 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 Stephen Ko, Havovi Joshi 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.
Diverse revenue streams
– Paper Cheung is present in almost all the verticals within the industry. This has provided firm in Cheung Yan: China's Paper Queen 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.
Learning organization
- Paper Cheung 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 Paper Cheung is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Cheung Yan: China's Paper Queen Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Highly skilled collaborators
– Paper Cheung 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 Cheung Yan: China's Paper Queen HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Paper Cheung 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.
Successful track record of launching new products
– Paper Cheung has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Paper Cheung 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.
Weaknesses Cheung Yan: China's Paper Queen | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cheung Yan: China's Paper Queen are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Cheung Yan: China's Paper Queen, it seems that the employees of Paper Cheung 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 Cheung Yan: China's Paper Queen HBR case study mentions - Paper Cheung 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Cheung Yan: China's Paper Queen, in the dynamic environment Paper Cheung has struggled to respond to the nimble upstart competition. Paper Cheung has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Cheung Yan: China's Paper Queen, is just above the industry average. Paper Cheung 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 Paper Cheung is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Paper Cheung needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Paper Cheung to focus more on services rather than just following the product oriented approach.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Cheung Yan: China's Paper Queen 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 Paper Cheung has relatively successful track record of launching new products.
Lack of clear differentiation of Paper Cheung products
– To increase the profitability and margins on the products, Paper Cheung 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, Stephen Ko, Havovi Joshi suggests that, Paper Cheung 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.
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 Paper Cheung supply chain. Even after few cautionary changes mentioned in the HBR case study - Cheung Yan: China's Paper Queen, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Paper Cheung vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Paper Cheung 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 - Cheung Yan: China's Paper Queen should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Paper Cheung 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 Cheung Yan: China's Paper Queen | 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 Cheung Yan: China's Paper Queen are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Paper Cheung 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 Paper Cheung to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Paper Cheung 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 Cheung Yan: China's Paper Queen - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Paper Cheung to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Paper Cheung to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Developing new processes and practices
– Paper Cheung 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.
Leveraging digital technologies
– Paper Cheung 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. Paper Cheung can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Paper Cheung 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.
Creating value in data economy
– The success of analytics program of Paper Cheung has opened avenues for new revenue streams for the organization in the industry. This can help Paper Cheung to build a more holistic ecosystem as suggested in the Cheung Yan: China's Paper Queen case study. Paper Cheung can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Paper Cheung can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Paper Cheung can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Paper Cheung 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, Cheung Yan: China's Paper Queen, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Paper Cheung can use these opportunities to build new business models that can help the communities that Paper Cheung operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Buying journey improvements
– Paper Cheung can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Cheung Yan: China's Paper Queen 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.
Threats Cheung Yan: China's Paper Queen External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Cheung Yan: China's Paper Queen are -
High dependence on third party suppliers
– Paper Cheung 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Paper Cheung with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Cheung Yan: China's Paper Queen, Paper Cheung 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 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Paper Cheung 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.
Stagnating economy with rate increase
– Paper Cheung 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Paper Cheung 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 Cheung Yan: China's Paper Queen .
Regulatory challenges
– Paper Cheung 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.
Environmental challenges
– Paper Cheung 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. Paper Cheung can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Paper Cheung needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– Paper Cheung has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Paper Cheung 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.
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 Paper Cheung business can come under increasing regulations regarding data privacy, data security, etc.
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.
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 Paper Cheung in the Leadership & Managing People sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Cheung Yan: China's Paper Queen 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 Cheung Yan: China's Paper Queen 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 Cheung Yan: China's Paper Queen 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 Cheung Yan: China's Paper Queen 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 Cheung Yan: China's Paper Queen 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 Paper Cheung needs to make to build a sustainable competitive advantage.
