Shang Xia: Selling High-Quality Goods "Proudly Made in China" SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Shang Xia: Selling High-Quality Goods "Proudly Made in China"
Shang Xia is a story of a female entrepreneur whose goal is to open the Chinese luxury-goods market to products proudly made in China. It is the story of a young Chinese designer named Jiang Qiong Er who was convinced that the craft of making luxury goods, which had been deeply rooted in ancient Chinese culture, could be revived by Chinese artisans working to her modern designs. By the sheer force of her convictions, the seasoned CEO of HermA?s was won over to her business plan. The story starts in 2007, when Shang Xia was first born in a small workshop in Shanghai, and continues to the present day when the brand is expanding its footprint in other cities in China and the surrounding region. Although Shang Xia has not yet turned a profit since it opened its first boutique in Shanghai in 2010, HermA?s is patiently convinced that the value proposition is sound and continues to own a 90% stake in the company.
Authors :: Frederic Godart, David Dubois, Brian Henry, Iain Ding
Swot Analysis of "Shang Xia: Selling High-Quality Goods "Proudly Made in China"" written by Frederic Godart, David Dubois, Brian Henry, Iain Ding includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Xia Shang facing as an external strategic factors. Some of the topics covered in Shang Xia: Selling High-Quality Goods "Proudly Made in China" case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Shang Xia: Selling High-Quality Goods "Proudly Made in China" casestudy better are - – increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, technology disruption, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic ,
geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Shang Xia: Selling High-Quality Goods "Proudly Made in China"
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Shang Xia: Selling High-Quality Goods "Proudly Made in China" case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Xia Shang, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Xia Shang 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 Shang Xia: Selling High-Quality Goods "Proudly Made in China" can be done for the following purposes –
1. Strategic planning using facts provided in Shang Xia: Selling High-Quality Goods "Proudly Made in China" case study
2. Improving business portfolio management of Xia Shang
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 Xia Shang
Strengths Shang Xia: Selling High-Quality Goods "Proudly Made in China" | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Xia Shang in Shang Xia: Selling High-Quality Goods "Proudly Made in China" Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Shang Xia: Selling High-Quality Goods "Proudly Made in China" 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.
Ability to lead change in Leadership & Managing People field
– Xia Shang 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 Xia Shang in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Xia Shang 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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Shang Xia: Selling High-Quality Goods "Proudly Made in China" firm has clearly differentiated products in the market place. This has enabled Xia Shang to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Xia Shang to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Xia Shang 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.
Ability to recruit top talent
– Xia Shang is one of the leading recruiters in the industry. Managers in the Shang Xia: Selling High-Quality Goods "Proudly Made in China" are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Xia Shang in the sector have low bargaining power. Shang Xia: Selling High-Quality Goods "Proudly Made in China" has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Xia Shang to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Xia Shang is one of the most innovative firm in sector. Manager in Shang Xia: Selling High-Quality Goods "Proudly Made in China" Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Xia Shang has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Xia Shang 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Xia Shang digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Xia Shang 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.
Strong track record of project management
– Xia Shang is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Xia Shang has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Shang Xia: Selling High-Quality Goods "Proudly Made in China" 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.
Weaknesses Shang Xia: Selling High-Quality Goods "Proudly Made in China" | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Shang Xia: Selling High-Quality Goods "Proudly Made in China" are -
Slow to strategic competitive environment developments
– As Shang Xia: Selling High-Quality Goods "Proudly Made in China" HBR case study mentions - Xia Shang takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Shang Xia: Selling High-Quality Goods "Proudly Made in China", in the dynamic environment Xia Shang has struggled to respond to the nimble upstart competition. Xia Shang has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High bargaining power of channel partners
– Because of the regulatory requirements, Frederic Godart, David Dubois, Brian Henry, Iain Ding suggests that, Xia Shang 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.
Capital Spending Reduction
– Even during the low interest decade, Xia Shang 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.
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 Xia Shang supply chain. Even after few cautionary changes mentioned in the HBR case study - Shang Xia: Selling High-Quality Goods "Proudly Made in China", it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Xia Shang vulnerable to further global disruptions in South East Asia.
Products dominated business model
– Even though Xia Shang 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 - Shang Xia: Selling High-Quality Goods "Proudly Made in China" should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– After analyzing the HBR case study Shang Xia: Selling High-Quality Goods "Proudly Made in China", it seems that company is thinking about the frontier risks that can impact Leadership & Managing People strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Aligning sales with marketing
– It come across in the case study Shang Xia: Selling High-Quality Goods "Proudly Made in China" 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 Shang Xia: Selling High-Quality Goods "Proudly Made in China" can leverage the sales team experience to cultivate customer relationships as Xia Shang is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Xia Shang is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Shang Xia: Selling High-Quality Goods "Proudly Made in China" can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Shang Xia: Selling High-Quality Goods "Proudly Made in China", it seems that the employees of Xia Shang 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Shang Xia: Selling High-Quality Goods "Proudly Made in China" 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 Xia Shang 's lucrative customers.
Opportunities Shang Xia: Selling High-Quality Goods "Proudly Made in China" | 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 Shang Xia: Selling High-Quality Goods "Proudly Made in China" are -
Manufacturing automation
– Xia Shang 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.
Using analytics as competitive advantage
– Xia Shang 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 Shang Xia: Selling High-Quality Goods "Proudly Made in China" - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Xia Shang to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Xia Shang to increase its market reach. Xia Shang 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.
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. Xia Shang can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Xia Shang 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, Shang Xia: Selling High-Quality Goods "Proudly Made in China", to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Xia Shang in the consumer business. Now Xia Shang can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Xia Shang has opened avenues for new revenue streams for the organization in the industry. This can help Xia Shang to build a more holistic ecosystem as suggested in the Shang Xia: Selling High-Quality Goods "Proudly Made in China" case study. Xia Shang can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Xia Shang is facing challenges because of the dominance of functional experts in the organization. Shang Xia: Selling High-Quality Goods "Proudly Made in China" 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.
Buying journey improvements
– Xia Shang can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Shang Xia: Selling High-Quality Goods "Proudly Made in China" 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.
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. Xia Shang can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Xia Shang 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. Xia Shang 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 Xia Shang can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Xia Shang 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.
Threats Shang Xia: Selling High-Quality Goods "Proudly Made in China" External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Shang Xia: Selling High-Quality Goods "Proudly Made in China" are -
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. Xia Shang 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.
Stagnating economy with rate increase
– Xia Shang 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.
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 Xia Shang business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Xia Shang 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.
Increasing wage structure of Xia Shang
– 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 Xia Shang.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Xia Shang 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 Shang Xia: Selling High-Quality Goods "Proudly Made in China" .
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.
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 Xia Shang.
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 Xia Shang in the Leadership & Managing People sector and impact the bottomline of the organization.
Regulatory challenges
– Xia Shang 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.
Technology acceleration in Forth Industrial Revolution
– Xia Shang has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Xia Shang 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Xia Shang with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Xia Shang needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Shang Xia: Selling High-Quality Goods "Proudly Made in China" 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 Shang Xia: Selling High-Quality Goods "Proudly Made in China" 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 Shang Xia: Selling High-Quality Goods "Proudly Made in China" 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 Shang Xia: Selling High-Quality Goods "Proudly Made in China" 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 Shang Xia: Selling High-Quality Goods "Proudly Made in China" 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 Xia Shang needs to make to build a sustainable competitive advantage.
