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 - – increasing transportation and logistics costs, increasing commodity prices, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, geopolitical disruptions, cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies,
there is increasing trade war between United States & China, technology disruption, 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 -
Ability to lead change in Leadership & Managing People field
– Hitachi Hisense 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 Hitachi Hisense in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
Strong track record of project management
– Hitachi Hisense is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Hitachi Hisense 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
– Hitachi Hisense has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hitachi Hisense 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.
High switching costs
– The high switching costs that Hitachi Hisense 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.
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.
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.
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 -
Aligning sales with marketing
– It come across in the case study Hisense-Hitachi Joint Venture: Expanding in Southeast 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 Hisense-Hitachi Joint Venture: Expanding in Southeast Asia can leverage the sales team experience to cultivate customer relationships as Hitachi Hisense is planning to shift buying processes online.
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.
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 Hitachi Hisense supply chain. Even after few cautionary changes mentioned in the HBR case study - Hisense-Hitachi Joint Venture: Expanding in Southeast Asia, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hitachi Hisense vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Hitachi Hisense 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.
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.
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.
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.
Products dominated business model
– Even though Hitachi Hisense 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: Expanding in Southeast Asia should strive to include more intangible value offerings along with its core products and services.
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.
Need for greater diversity
– Hitachi Hisense 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.
Capital Spending Reduction
– Even during the low interest decade, Hitachi Hisense has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Opportunities 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 -
Buying journey improvements
– Hitachi Hisense can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Hisense-Hitachi Joint Venture: Expanding in Southeast Asia 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.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hitachi Hisense 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.
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.
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. Hitachi Hisense can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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.
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.
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.
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.
Loyalty marketing
– Hitachi Hisense 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.
Better consumer reach
– The expansion of the 5G network will help Hitachi Hisense to increase its market reach. Hitachi Hisense 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.
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 -
Consumer confidence and its impact on Hitachi Hisense 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.
Environmental challenges
– Hitachi Hisense 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. Hitachi Hisense can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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.
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.
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.
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.
Increasing wage structure of Hitachi Hisense
– 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 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.
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.
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.
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hitachi Hisense 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 Hisense-Hitachi Joint Venture: Expanding in Southeast Asia .
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.