Family Business Succession in Asia SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Family Business Succession in Asia
The Wang Group was created by Alfred Wang in Hong Kong after fleeing China during the turbulence that marked the beginning of the communist regime. After successfully building up the diversified trading business and expanding to various other Asian countries, in 1995, the business was taken over by his second son, Charles Wang, a charismatic leader. Charles wished to create a more sustainable family business, tuned in to today's global trends, and run by non-family members. To this end, Charles hired an outside CEO to implement his vision after implementing a far-reaching corporate change program. The global economic crisis that started in 2008, however, caught the company halfway through the reorganization, and brought losses and the departure of the newly hired CEO. Charles Wang had no other option than to again take up the top job himself, and had to reconsider the path towards a sustainable future for the family firm.
Swot Analysis of "Family Business Succession in Asia" written by Marleen Dieleman, Jonathan Ho Wye Kit includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Wang Charles facing as an external strategic factors. Some of the topics covered in Family Business Succession in Asia case study are - Strategic Management Strategies, Leadership, Organizational culture, Strategy and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Family Business Succession in Asia casestudy better are - – increasing transportation and logistics costs, there is backlash against globalization, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China,
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 Family Business Succession in Asia
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Family Business Succession in Asia case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Wang Charles, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Wang Charles 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 Family Business Succession in Asia can be done for the following purposes –
1. Strategic planning using facts provided in Family Business Succession in Asia case study
2. Improving business portfolio management of Wang Charles
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 Wang Charles
Strengths Family Business Succession in Asia | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Wang Charles in Family Business Succession in Asia Harvard Business Review case study are -
Ability to lead change in Leadership & Managing People field
– Wang Charles 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 Wang Charles in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Wang Charles 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.
Innovation driven organization
– Wang Charles is one of the most innovative firm in sector. Manager in Family Business Succession in Asia Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Wang Charles has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Wang Charles 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.
Diverse revenue streams
– Wang Charles is present in almost all the verticals within the industry. This has provided firm in Family Business Succession in Asia 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
– Wang Charles has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Family Business Succession in Asia 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.
Ability to recruit top talent
– Wang Charles is one of the leading recruiters in the industry. Managers in the Family Business Succession in Asia 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
– Family Business Succession in Asia firm has clearly differentiated products in the market place. This has enabled Wang Charles to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Wang Charles to invest into research and development (R&D) and innovation.
Organizational Resilience of Wang Charles
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Wang Charles does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Wang Charles 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.
Effective Research and Development (R&D)
– Wang Charles 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 Family Business Succession in Asia - 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 Wang Charles in the sector have low bargaining power. Family Business Succession in Asia has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Wang Charles to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Family Business Succession in Asia | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Family Business Succession in Asia are -
Workers concerns about automation
– As automation is fast increasing in the segment, Wang Charles needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Skills based hiring
– The stress on hiring functional specialists at Wang Charles 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.
Aligning sales with marketing
– It come across in the case study Family Business Succession in Asia 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 Family Business Succession in Asia can leverage the sales team experience to cultivate customer relationships as Wang Charles is planning to shift buying processes online.
Lack of clear differentiation of Wang Charles products
– To increase the profitability and margins on the products, Wang Charles needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Family Business Succession in Asia, is just above the industry average. Wang Charles 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
Wang Charles 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Family Business Succession in Asia 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 Wang Charles has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of Wang Charles, firm in the HBR case study Family Business Succession in Asia needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Wang Charles supply chain. Even after few cautionary changes mentioned in the HBR case study - Family Business Succession in Asia, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Wang Charles vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Wang Charles has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Family Business Succession in Asia, in the dynamic environment Wang Charles has struggled to respond to the nimble upstart competition. Wang Charles has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Family Business Succession in Asia | 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 Family Business Succession in Asia are -
Manufacturing automation
– Wang Charles 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
– Wang Charles 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.
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. Wang Charles can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Wang Charles has opened avenues for new revenue streams for the organization in the industry. This can help Wang Charles to build a more holistic ecosystem as suggested in the Family Business Succession in Asia case study. Wang Charles can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Wang Charles 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. Wang Charles 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 Wang Charles in the consumer business. Now Wang Charles can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Wang Charles 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Wang Charles can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Wang Charles can use these opportunities to build new business models that can help the communities that Wang Charles operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Leveraging digital technologies
– Wang Charles 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.
Learning at scale
– Online learning technologies has now opened space for Wang Charles 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Wang Charles 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, Family Business Succession in Asia, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Wang Charles 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 Family Business Succession in Asia External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Family Business Succession in Asia are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Wang Charles 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.
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 Wang Charles 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 Wang Charles in the Leadership & Managing People sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Wang Charles 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.
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 Wang Charles.
Shortening product life cycle
– it is one of the major threat that Wang Charles is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Wang Charles 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Wang Charles 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 Family Business Succession in Asia .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Wang Charles with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Wang Charles needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Increasing wage structure of Wang Charles
– 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 Wang Charles.
Environmental challenges
– Wang Charles 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. Wang Charles can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
High dependence on third party suppliers
– Wang Charles 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.
Weighted SWOT Analysis of Family Business Succession in Asia 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 Family Business Succession in Asia 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 Family Business Succession in Asia 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 Family Business Succession in Asia 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 Family Business Succession in Asia 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 Wang Charles needs to make to build a sustainable competitive advantage.
