Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis

Xinxing Dutile Iron Pipes Co. is a Chinese state-owned enterprise (SOE) that manufactures cast pipe products and steel products. The company had grown to become a dominant player in the ductile iron pipe industry, holding more than 40% domestic market share and nearly 20% global market share. Historically, Xinxing Pipes' management control system was based on standard costs. This system worked well until the global financial crisis in 2008 where market demand for steel declined rapidly, resulting in intense price fluctuations in both upstream and downstream. The existing management control system failed to respond in a rapid and efficient manner. As a result, Xinxing Pipes reformed its management control system. The reform was based upon two core ideas: (1) keep close watch on the market, increase communication among departments, take coordinated actions, and respond quickly to external market changes; (2) transform the production divisions' cost-centered model into a profit-centered model." These two guiding ideas gave birth to the "Production-Supply-Sales Rapid Linkage" and the "Simulated Legal Entities".

Authors :: Ning Jia, F. Warren McFarlan, Xiaohui Li

Topics :: Leadership & Managing People

Tags :: Costs, Manufacturing, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis" written by Ning Jia, F. Warren McFarlan, Xiaohui Li includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Xinxing Pipes facing as an external strategic factors. Some of the topics covered in Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis case study are - Strategic Management Strategies, Costs, Manufacturing and Leadership & Managing People.

Some of the macro environment factors that can be used to understand the Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis casestudy better are - – wage bills are increasing, there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, etc

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Introduction to SWOT Analysis of Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Xinxing Pipes, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Xinxing Pipes 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis can be done for the following purposes –
1. Strategic planning using facts provided in Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis case study
2. Improving business portfolio management of Xinxing Pipes
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 Xinxing Pipes

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Strengths Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Xinxing Pipes in Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis Harvard Business Review case study are -

Diverse revenue streams

– Xinxing Pipes is present in almost all the verticals within the industry. This has provided firm in Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis 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.

Superior customer experience

– The customer experience strategy of Xinxing Pipes in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Successful track record of launching new products

– Xinxing Pipes has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Xinxing Pipes 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.

Strong track record of project management

– Xinxing Pipes is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

High switching costs

– The high switching costs that Xinxing Pipes 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.

Innovation driven organization

– Xinxing Pipes is one of the most innovative firm in sector. Manager in Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.

Operational resilience

– The operational resilience strategy in the Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis 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.

Analytics focus

– Xinxing Pipes 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 Ning Jia, F. Warren McFarlan, Xiaohui Li 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.

Training and development

– Xinxing Pipes has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis 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.

Low bargaining power of suppliers

– Suppliers of Xinxing Pipes in the sector have low bargaining power. Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Xinxing Pipes to manage not only supply disruptions but also source products at highly competitive prices.

Cross disciplinary teams

– Horizontal connected teams at the Xinxing Pipes 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 lead change in Leadership & Managing People field

– Xinxing Pipes 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 Xinxing Pipes in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

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Weaknesses Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis are -

High cash cycle compare to competitors

Xinxing Pipes 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.

No frontier risks strategy

– After analyzing the HBR case study Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis, 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.

Interest costs

– Compare to the competition, Xinxing Pipes 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.

Skills based hiring

– The stress on hiring functional specialists at Xinxing Pipes 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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Xinxing Pipes is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.

Aligning sales with marketing

– It come across in the case study Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis 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 Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis can leverage the sales team experience to cultivate customer relationships as Xinxing Pipes 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 Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis, in the dynamic environment Xinxing Pipes has struggled to respond to the nimble upstart competition. Xinxing Pipes has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

Employees’ incomplete understanding of strategy

– From the instances in the HBR case study Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis, it seems that the employees of Xinxing Pipes 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.

Need for greater diversity

– Xinxing Pipes 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.

High operating costs

– Compare to the competitors, firm in the HBR case study Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis 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 Xinxing Pipes 's lucrative customers.

Lack of clear differentiation of Xinxing Pipes products

– To increase the profitability and margins on the products, Xinxing Pipes needs to provide more differentiated products than what it is currently offering in the marketplace.

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Opportunities Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis | 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 Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis are -

Creating value in data economy

– The success of analytics program of Xinxing Pipes has opened avenues for new revenue streams for the organization in the industry. This can help Xinxing Pipes to build a more holistic ecosystem as suggested in the Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis case study. Xinxing Pipes can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Xinxing Pipes 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, Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Xinxing Pipes is facing challenges because of the dominance of functional experts in the organization. Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis 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. Xinxing Pipes can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Xinxing Pipes can use these opportunities to build new business models that can help the communities that Xinxing Pipes operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.

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. Xinxing Pipes 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. Xinxing Pipes 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Xinxing Pipes 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.

Buying journey improvements

– Xinxing Pipes can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis 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.

Loyalty marketing

– Xinxing Pipes 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.

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. Xinxing Pipes can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Xinxing Pipes 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 Xinxing Pipes to hire the very best people irrespective of their geographical location.

Building a culture of innovation

– managers at Xinxing Pipes 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Xinxing Pipes can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

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Threats Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats mentioned in the HBR case study Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis are -

Increasing wage structure of Xinxing Pipes

– 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 Xinxing Pipes.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Xinxing Pipes 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.

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. Xinxing Pipes needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.

Stagnating economy with rate increase

– Xinxing Pipes 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.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Xinxing Pipes with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis, Xinxing Pipes 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 .

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. Xinxing Pipes can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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. Xinxing Pipes 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.

Technology acceleration in Forth Industrial Revolution

– Xinxing Pipes has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Xinxing Pipes 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 dependence on third party suppliers

– Xinxing Pipes 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.

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 Xinxing Pipes is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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 Xinxing Pipes in the Leadership & Managing People sector and impact the bottomline of the organization.

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Weighted SWOT Analysis of Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis 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 Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis 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 Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis 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 Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis 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 Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis 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 Xinxing Pipes needs to make to build a sustainable competitive advantage.

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