Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
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
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 - – supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs,
digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, etc
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.
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
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 -
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.
Highly skilled collaborators
– Xinxing Pipes 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 Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Xinxing Pipes digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Xinxing Pipes 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
– 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.
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.
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.
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.
Sustainable margins compare to other players in Leadership & Managing People industry
– Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis firm has clearly differentiated products in the market place. This has enabled Xinxing Pipes to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Xinxing Pipes to invest into research and development (R&D) and innovation.
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.
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.
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.
High brand equity
– Xinxing Pipes has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Xinxing Pipes to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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 -
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Xinxing Pipes 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 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.
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.
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.
Slow decision making process
– As mentioned earlier in the report, Xinxing Pipes 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. Xinxing Pipes 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis, is just above the industry average. Xinxing Pipes 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.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Ning Jia, F. Warren McFarlan, Xiaohui Li suggests that, Xinxing Pipes 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.
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 Xinxing Pipes supply chain. Even after few cautionary changes mentioned in the HBR case study - Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Xinxing Pipes vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis HBR case study mentions - Xinxing Pipes 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.
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 -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Xinxing Pipes 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.
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.
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.
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.
Better consumer reach
– The expansion of the 5G network will help Xinxing Pipes to increase its market reach. Xinxing Pipes 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.
Developing new processes and practices
– Xinxing Pipes can develop new processes and procedures in Leadership & Managing People industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
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.
Leveraging digital technologies
– Xinxing Pipes 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.
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.
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.
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.
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.
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.
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 -
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Xinxing Pipes 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 Xinxing Ductile Iron Pipes: Transforming the Management Control System in Time of Crisis .
Environmental challenges
– Xinxing Pipes 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. Xinxing Pipes can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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.
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.
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.
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.
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.
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.
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.
Regulatory challenges
– Xinxing Pipes needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Leadership & Managing People industry regulations.
Increasing wage structure of 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.
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 Xinxing Pipes business can come under increasing regulations regarding data privacy, data security, etc.
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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