Hisense-Hitachi Joint Venture: Expanding in Southeast Asia SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Hisense-Hitachi Joint Venture: Expanding in Southeast Asia
Before re-entering the Southeast Asian market in 2015, the Hisense-Hitachi joint venture mainly used the well known Hitachi brand to explore overseas markets. After the JV had accumulated enough capacity to adopt a product differentiation strategy, they decided to treat the Hisense brand as the focal brand in Southeast Asia and adopted a series of distribution strategies that differed from what they had used to sell Hitachi branded products elsewhere. The (B) case provides a basis for discussing target market selection, and the establishment of varying distribution channels (exclusive vs non-exclusive agents) in different countries. This case can be used with Hisense-Hitachi Joint Venture (A): Expanding Internationally.
Swot Analysis of "Hisense-Hitachi Joint Venture: Expanding in Southeast Asia" written by Paul W. Beamish, Liu Su includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hitachi Hisense facing as an external strategic factors. Some of the topics covered in Hisense-Hitachi Joint Venture: Expanding in Southeast Asia case study are - Strategic Management Strategies, Marketing, Sales and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Hisense-Hitachi Joint Venture: Expanding in Southeast Asia casestudy better are - – geopolitical disruptions, cloud computing is disrupting traditional business models, there is backlash against globalization, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, increasing commodity prices, talent flight as more people leaving formal jobs,
increasing energy prices, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Hisense-Hitachi Joint Venture: Expanding in Southeast Asia
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hisense-Hitachi Joint Venture: Expanding in Southeast Asia case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hitachi Hisense, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hitachi Hisense 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: Expanding in Southeast Asia can be done for the following purposes –
1. Strategic planning using facts provided in Hisense-Hitachi Joint Venture: Expanding in Southeast Asia case study
2. Improving business portfolio management of Hitachi Hisense
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 Hitachi Hisense
Strengths Hisense-Hitachi Joint Venture: Expanding in Southeast Asia | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hitachi Hisense in Hisense-Hitachi Joint Venture: Expanding in Southeast Asia Harvard Business Review case study are -
Learning organization
- Hitachi Hisense 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 Hitachi Hisense is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Hisense-Hitachi Joint Venture: Expanding in Southeast Asia Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High brand equity
– Hitachi Hisense has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hitachi Hisense to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Hitachi Hisense 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: Expanding in Southeast 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Hitachi Hisense digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hitachi Hisense 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.
Analytics focus
– Hitachi Hisense 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 Paul W. Beamish, Liu Su 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.
Innovation driven organization
– Hitachi Hisense is one of the most innovative firm in sector. Manager in Hisense-Hitachi Joint Venture: Expanding in Southeast Asia Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Hitachi Hisense is present in almost all the verticals within the industry. This has provided firm in Hisense-Hitachi Joint Venture: Expanding in Southeast 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.
Ability to recruit top talent
– Hitachi Hisense is one of the leading recruiters in the industry. Managers in the Hisense-Hitachi Joint Venture: Expanding in Southeast 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.
Effective Research and Development (R&D)
– Hitachi Hisense 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: Expanding in Southeast 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.
Organizational Resilience of Hitachi Hisense
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Hitachi Hisense does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Hitachi Hisense in the sector have low bargaining power. Hisense-Hitachi Joint Venture: Expanding in Southeast Asia has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hitachi Hisense to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Hitachi Hisense 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: Expanding in Southeast Asia HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Hisense-Hitachi Joint Venture: Expanding in Southeast Asia | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hisense-Hitachi Joint Venture: Expanding in Southeast Asia are -
Skills based hiring
– The stress on hiring functional specialists at Hitachi Hisense 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Hisense-Hitachi Joint Venture: Expanding in Southeast Asia 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 Hitachi Hisense 's lucrative customers.
Low market penetration in new markets
– Outside its home market of Hitachi Hisense, firm in the HBR case study Hisense-Hitachi Joint Venture: Expanding in Southeast Asia needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Hitachi Hisense 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. Hitachi Hisense 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.
Lack of clear differentiation of Hitachi Hisense products
– To increase the profitability and margins on the products, Hitachi Hisense 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, Paul W. Beamish, Liu Su suggests that, Hitachi Hisense 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Hitachi Hisense 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Hisense-Hitachi Joint Venture: Expanding in Southeast 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 Hitachi Hisense has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Hisense-Hitachi Joint Venture: Expanding in Southeast Asia, is just above the industry average. Hitachi Hisense 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.
Interest costs
– Compare to the competition, Hitachi Hisense 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Hisense-Hitachi Joint Venture: Expanding in Southeast Asia, in the dynamic environment Hitachi Hisense has struggled to respond to the nimble upstart competition. Hitachi Hisense has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Hisense-Hitachi Joint Venture: Expanding in Southeast 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 Hisense-Hitachi Joint Venture: Expanding in Southeast Asia are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hitachi Hisense can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Hitachi Hisense has opened avenues for new revenue streams for the organization in the industry. This can help Hitachi Hisense to build a more holistic ecosystem as suggested in the Hisense-Hitachi Joint Venture: Expanding in Southeast Asia case study. Hitachi Hisense can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hitachi Hisense can use these opportunities to build new business models that can help the communities that Hitachi Hisense operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
Using analytics as competitive advantage
– Hitachi Hisense 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: Expanding in Southeast Asia - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hitachi Hisense to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Hitachi Hisense 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hitachi Hisense is facing challenges because of the dominance of functional experts in the organization. Hisense-Hitachi Joint Venture: Expanding in Southeast Asia 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.
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. Hitachi Hisense can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hitachi Hisense 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hitachi Hisense 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 Hitachi Hisense to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Hitachi Hisense 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 Hitachi Hisense 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.
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 Hitachi Hisense in the consumer business. Now Hitachi Hisense can target international markets with far fewer capital restrictions requirements than the existing system.
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. Hitachi Hisense 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. Hitachi Hisense 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.
Threats Hisense-Hitachi Joint Venture: Expanding in Southeast Asia 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: Expanding in Southeast Asia are -
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Hitachi Hisense can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Hitachi Hisense in the Leadership & Managing People sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Hitachi Hisense with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Hitachi Hisense 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.
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 Hitachi Hisense business can come under increasing regulations regarding data privacy, data security, etc.
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 Hitachi Hisense.
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
– Hitachi Hisense 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.
Shortening product life cycle
– it is one of the major threat that Hitachi Hisense 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
– Hitachi Hisense 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.
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.
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. Hitachi Hisense needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hitachi Hisense 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.
Weighted SWOT Analysis of Hisense-Hitachi Joint Venture: Expanding in Southeast 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 Hisense-Hitachi Joint Venture: Expanding in Southeast 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 Hisense-Hitachi Joint Venture: Expanding in Southeast 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 Hisense-Hitachi Joint Venture: Expanding in Southeast 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 Hisense-Hitachi Joint Venture: Expanding in Southeast 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 Hitachi Hisense needs to make to build a sustainable competitive advantage.
