Case Study Description of Hisense-Hitachi Joint Venture (A): Expanding Internationally
In June 2014, Hisense of China and Hitachi of Japan were considering whether their 11-year-old joint venture (JV) should once again assume responsibility for its international sales. After developing a solid central air-conditioner market share in China, in 2009, the JV began to sell in various overseas regions but struggled. In April 2012, the partners agreed to have a Hisense subsidiary (the HIMC) assume full responsibility for selling the JV's products overseas. However, over the next two years, HIMC's performance in selling the JV's products overseas was unsatisfactory. In response, the partners began to discuss whether they should have the JV sell its own products again overseas. Of immediate interest was the Southeast Asian market.
Swot Analysis of "Hisense-Hitachi Joint Venture (A): Expanding Internationally" written by Paul W. Beamish, Liu Su includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hisense Jv facing as an external strategic factors. Some of the topics covered in Hisense-Hitachi Joint Venture (A): Expanding Internationally case study are - Strategic Management Strategies, Joint ventures, Manufacturing and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Hisense-Hitachi Joint Venture (A): Expanding Internationally casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies,
geopolitical disruptions, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Hisense-Hitachi Joint Venture (A): Expanding Internationally
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hisense-Hitachi Joint Venture (A): Expanding Internationally case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hisense Jv, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hisense Jv 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 Hisense-Hitachi Joint Venture (A): Expanding Internationally can be done for the following purposes –
1. Strategic planning using facts provided in Hisense-Hitachi Joint Venture (A): Expanding Internationally case study
2. Improving business portfolio management of Hisense Jv
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 Hisense Jv
Strengths Hisense-Hitachi Joint Venture (A): Expanding Internationally | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hisense Jv in Hisense-Hitachi Joint Venture (A): Expanding Internationally Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Hisense Jv in the sector have low bargaining power. Hisense-Hitachi Joint Venture (A): Expanding Internationally has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hisense Jv to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the Hisense-Hitachi Joint Venture (A): Expanding Internationally 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 Hisense Jv 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
– Hisense Jv has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hisense Jv 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.
Effective Research and Development (R&D)
– Hisense Jv 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 Hisense-Hitachi Joint Venture (A): Expanding Internationally - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Hisense Jv digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hisense Jv 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.
Highly skilled collaborators
– Hisense Jv 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 Hisense-Hitachi Joint Venture (A): Expanding Internationally HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Hisense Jv is one of the leading recruiters in the industry. Managers in the Hisense-Hitachi Joint Venture (A): Expanding Internationally are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Hisense Jv has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Hisense-Hitachi Joint Venture (A): Expanding Internationally 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 lead change in Leadership & Managing People field
– Hisense Jv 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 Hisense Jv in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Hisense Jv in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Hisense Jv is one of the most innovative firm in sector. Manager in Hisense-Hitachi Joint Venture (A): Expanding Internationally Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses Hisense-Hitachi Joint Venture (A): Expanding Internationally | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hisense-Hitachi Joint Venture (A): Expanding Internationally are -
Aligning sales with marketing
– It come across in the case study Hisense-Hitachi Joint Venture (A): Expanding Internationally 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 Hisense-Hitachi Joint Venture (A): Expanding Internationally can leverage the sales team experience to cultivate customer relationships as Hisense Jv is planning to shift buying processes online.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Hisense-Hitachi Joint Venture (A): Expanding Internationally, it seems that the employees of Hisense Jv 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.
Skills based hiring
– The stress on hiring functional specialists at Hisense Jv 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Hisense Jv 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.
Slow decision making process
– As mentioned earlier in the report, Hisense Jv 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. Hisense Jv 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Hisense-Hitachi Joint Venture (A): Expanding Internationally 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 Hisense Jv 's lucrative customers.
Need for greater diversity
– Hisense Jv 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.
Increasing silos among functional specialists
– The organizational structure of Hisense Jv is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Hisense Jv needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hisense Jv to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Hisense Jv products
– To increase the profitability and margins on the products, Hisense Jv needs to provide more differentiated products than what it is currently offering in the marketplace.
Low market penetration in new markets
– Outside its home market of Hisense Jv, firm in the HBR case study Hisense-Hitachi Joint Venture (A): Expanding Internationally needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Hisense Jv 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 - Hisense-Hitachi Joint Venture (A): Expanding Internationally should strive to include more intangible value offerings along with its core products and services.
Opportunities Hisense-Hitachi Joint Venture (A): Expanding Internationally | 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 Hisense-Hitachi Joint Venture (A): Expanding Internationally are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hisense Jv 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, Hisense Jv is facing challenges because of the dominance of functional experts in the organization. Hisense-Hitachi Joint Venture (A): Expanding Internationally 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hisense Jv 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 Hisense Jv to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Hisense Jv has opened avenues for new revenue streams for the organization in the industry. This can help Hisense Jv to build a more holistic ecosystem as suggested in the Hisense-Hitachi Joint Venture (A): Expanding Internationally case study. Hisense Jv can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Hisense Jv can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Hisense-Hitachi Joint Venture (A): Expanding Internationally suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Better consumer reach
– The expansion of the 5G network will help Hisense Jv to increase its market reach. Hisense Jv 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hisense Jv 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, Hisense-Hitachi Joint Venture (A): Expanding Internationally, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hisense Jv 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hisense Jv can use these opportunities to build new business models that can help the communities that Hisense Jv operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hisense Jv 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.
Using analytics as competitive advantage
– Hisense Jv 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 Hisense-Hitachi Joint Venture (A): Expanding Internationally - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hisense Jv to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Hisense Jv in the consumer business. Now Hisense Jv can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Hisense Jv 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 Hisense-Hitachi Joint Venture (A): Expanding Internationally External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Hisense-Hitachi Joint Venture (A): Expanding Internationally are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Hisense-Hitachi Joint Venture (A): Expanding Internationally, Hisense Jv 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 .
Stagnating economy with rate increase
– Hisense Jv 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.
Shortening product life cycle
– it is one of the major threat that Hisense Jv is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Hisense Jv business can come under increasing regulations regarding data privacy, data security, etc.
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.
High dependence on third party suppliers
– Hisense Jv 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.
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 Hisense Jv.
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 Hisense Jv in the Leadership & Managing People sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Hisense Jv has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Hisense Jv 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.
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. Hisense Jv needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Regulatory challenges
– Hisense Jv needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Leadership & Managing People industry regulations.
Increasing wage structure of Hisense Jv
– 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 Hisense Jv.
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. Hisense Jv 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 Hisense-Hitachi Joint Venture (A): Expanding Internationally 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 Hisense-Hitachi Joint Venture (A): Expanding Internationally 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 Hisense-Hitachi Joint Venture (A): Expanding Internationally 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 Hisense-Hitachi Joint Venture (A): Expanding Internationally 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 Hisense-Hitachi Joint Venture (A): Expanding Internationally 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 Hisense Jv needs to make to build a sustainable competitive advantage.
