China Netcom: Corporate Governance in China (A), Chinese Version SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of China Netcom: Corporate Governance in China (A), Chinese Version
With its dual listings on the Hong Kong stock market and New York Stock Exchange, state-owned enterprise, China Netcom was mandated to meet the listing requirements of these exchanges. From this initial step, China Netcom's Chairman, Zhang Chunjiang, began a program that sought to further develop the company's corporate governance practices to meet international corporate governance standards. The company hoped that its commitment in developing a globally-accepted governance structure would help the capital markets and potential investors understand that the company was a true, modern corporation, even with the state as a majority owner.
Authors :: Regina Abrami, William C. Kirby, F. Warren McFarlan, Ning Xiangdong
Swot Analysis of "China Netcom: Corporate Governance in China (A), Chinese Version" written by Regina Abrami, William C. Kirby, F. Warren McFarlan, Ning Xiangdong includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Netcom Governance facing as an external strategic factors. Some of the topics covered in China Netcom: Corporate Governance in China (A), Chinese Version case study are - Strategic Management Strategies, Government, Transparency and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the China Netcom: Corporate Governance in China (A), Chinese Version casestudy better are - – challanges to central banks by blockchain based private currencies, wage bills are increasing, technology disruption, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion,
cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of China Netcom: Corporate Governance in China (A), Chinese Version
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in China Netcom: Corporate Governance in China (A), Chinese Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Netcom Governance, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Netcom Governance 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 China Netcom: Corporate Governance in China (A), Chinese Version can be done for the following purposes –
1. Strategic planning using facts provided in China Netcom: Corporate Governance in China (A), Chinese Version case study
2. Improving business portfolio management of Netcom Governance
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 Netcom Governance
Strengths China Netcom: Corporate Governance in China (A), Chinese Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Netcom Governance in China Netcom: Corporate Governance in China (A), Chinese Version Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Netcom Governance in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Netcom Governance is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Netcom Governance
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Netcom Governance does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Netcom Governance 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.
High switching costs
– The high switching costs that Netcom Governance 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.
Diverse revenue streams
– Netcom Governance is present in almost all the verticals within the industry. This has provided firm in China Netcom: Corporate Governance in China (A), Chinese Version 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.
Analytics focus
– Netcom Governance 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 Regina Abrami, William C. Kirby, F. Warren McFarlan, Ning Xiangdong 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– China Netcom: Corporate Governance in China (A), Chinese Version firm has clearly differentiated products in the market place. This has enabled Netcom Governance to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Netcom Governance to invest into research and development (R&D) and innovation.
Learning organization
- Netcom Governance 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 Netcom Governance is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in China Netcom: Corporate Governance in China (A), Chinese Version Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Netcom Governance has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Netcom Governance to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Netcom Governance has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in China Netcom: Corporate Governance in China (A), Chinese Version 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
– Netcom Governance is one of the leading recruiters in the industry. Managers in the China Netcom: Corporate Governance in China (A), Chinese Version are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses China Netcom: Corporate Governance in China (A), Chinese Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of China Netcom: Corporate Governance in China (A), Chinese Version are -
High bargaining power of channel partners
– Because of the regulatory requirements, Regina Abrami, William C. Kirby, F. Warren McFarlan, Ning Xiangdong suggests that, Netcom Governance 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.
Interest costs
– Compare to the competition, Netcom Governance 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.
Lack of clear differentiation of Netcom Governance products
– To increase the profitability and margins on the products, Netcom Governance needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study China Netcom: Corporate Governance in China (A), Chinese Version, in the dynamic environment Netcom Governance has struggled to respond to the nimble upstart competition. Netcom Governance has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study China Netcom: Corporate Governance in China (A), Chinese Version 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 Netcom Governance 's lucrative customers.
High cash cycle compare to competitors
Netcom Governance 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.
Need for greater diversity
– Netcom Governance 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.
Low market penetration in new markets
– Outside its home market of Netcom Governance, firm in the HBR case study China Netcom: Corporate Governance in China (A), Chinese Version needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Netcom Governance is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Netcom Governance needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Netcom Governance to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study China Netcom: Corporate Governance in China (A), Chinese Version 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 China Netcom: Corporate Governance in China (A), Chinese Version can leverage the sales team experience to cultivate customer relationships as Netcom Governance is planning to shift buying processes online.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the China Netcom: Corporate Governance in China (A), Chinese Version 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 Netcom Governance has relatively successful track record of launching new products.
Opportunities China Netcom: Corporate Governance in China (A), Chinese Version | 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 China Netcom: Corporate Governance in China (A), Chinese Version are -
Learning at scale
– Online learning technologies has now opened space for Netcom Governance 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
– Netcom Governance 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.
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 Netcom Governance 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Netcom Governance 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, China Netcom: Corporate Governance in China (A), Chinese Version, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Using analytics as competitive advantage
– Netcom Governance 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 China Netcom: Corporate Governance in China (A), Chinese Version - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Netcom Governance to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Netcom Governance can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Netcom Governance 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.
Buying journey improvements
– Netcom Governance can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. China Netcom: Corporate Governance in China (A), Chinese Version 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.
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 Netcom Governance in the consumer business. Now Netcom Governance can target international markets with far fewer capital restrictions requirements than the existing system.
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. Netcom Governance can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Netcom Governance can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Leadership & Managing People industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Netcom Governance 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. Netcom Governance 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Netcom Governance is facing challenges because of the dominance of functional experts in the organization. China Netcom: Corporate Governance in China (A), Chinese Version 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.
Threats China Netcom: Corporate Governance in China (A), Chinese Version External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study China Netcom: Corporate Governance in China (A), Chinese Version are -
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. Netcom Governance needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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 Netcom Governance business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Netcom Governance is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Netcom Governance 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 wage structure of Netcom Governance
– 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 Netcom Governance.
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 Netcom Governance.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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. Netcom Governance can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Netcom Governance 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 China Netcom: Corporate Governance in China (A), Chinese Version .
Technology acceleration in Forth Industrial Revolution
– Netcom Governance has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Netcom Governance needs to keep up with the evolution of technology in the Leadership & Managing People sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Netcom Governance 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.
Environmental challenges
– Netcom Governance 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. Netcom Governance can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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. Netcom Governance 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.
Weighted SWOT Analysis of China Netcom: Corporate Governance in China (A), Chinese Version 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 China Netcom: Corporate Governance in China (A), Chinese Version 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 China Netcom: Corporate Governance in China (A), Chinese Version 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 China Netcom: Corporate Governance in China (A), Chinese Version 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 China Netcom: Corporate Governance in China (A), Chinese Version 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 Netcom Governance needs to make to build a sustainable competitive advantage.
