One Belt One Road: Chinese Strategic Investment in the 21st Century SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of One Belt One Road: Chinese Strategic Investment in the 21st Century
It is September 2013. The new Chinese President Xi Jinping will soon launch his tour in Central Asia. On this tour, the President is deciding whether to launch a grand investment strategy, which he calls "One Belt One Road" (OBOR). Through this plan, he hopes to achieve a range of economic, domestic, and geopolitical goals. Economically, China needs to transition into a growth model that is sustainable but still delivers high growth rates. Domestically, Xi needs to boost the popularity of the Communist Party and consolidate his power relative to other factions. Geopolitically, China is seeking to gain political leverage in Central Asia. Critics of the plan have raised a variety of concerns, including the profitability of the investments, its impact on the government's efforts to transition to a sustainable growth model, and the potential for backlash to the plan's geopolitical ambitions.
Swot Analysis of "One Belt One Road: Chinese Strategic Investment in the 21st Century" written by Kenneth Scheve, Ruxi Zhang includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Xi Geopolitical facing as an external strategic factors. Some of the topics covered in One Belt One Road: Chinese Strategic Investment in the 21st Century case study are - Strategic Management Strategies, Risk management and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the One Belt One Road: Chinese Strategic Investment in the 21st Century casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google,
increasing commodity prices, increasing energy prices, etc
Introduction to SWOT Analysis of One Belt One Road: Chinese Strategic Investment in the 21st Century
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in One Belt One Road: Chinese Strategic Investment in the 21st Century case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Xi Geopolitical, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Xi Geopolitical 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 One Belt One Road: Chinese Strategic Investment in the 21st Century can be done for the following purposes –
1. Strategic planning using facts provided in One Belt One Road: Chinese Strategic Investment in the 21st Century case study
2. Improving business portfolio management of Xi Geopolitical
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 Xi Geopolitical
Strengths One Belt One Road: Chinese Strategic Investment in the 21st Century | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Xi Geopolitical in One Belt One Road: Chinese Strategic Investment in the 21st Century Harvard Business Review case study are -
Organizational Resilience of Xi Geopolitical
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Xi Geopolitical does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Xi Geopolitical has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study One Belt One Road: Chinese Strategic Investment in the 21st Century - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Xi Geopolitical has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in One Belt One Road: Chinese Strategic Investment in the 21st Century 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
– Xi Geopolitical has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Xi Geopolitical 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.
Operational resilience
– The operational resilience strategy in the One Belt One Road: Chinese Strategic Investment in the 21st Century 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.
Diverse revenue streams
– Xi Geopolitical is present in almost all the verticals within the industry. This has provided firm in One Belt One Road: Chinese Strategic Investment in the 21st Century 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.
Innovation driven organization
– Xi Geopolitical is one of the most innovative firm in sector. Manager in One Belt One Road: Chinese Strategic Investment in the 21st Century Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Leadership & Managing People industry
– One Belt One Road: Chinese Strategic Investment in the 21st Century firm has clearly differentiated products in the market place. This has enabled Xi Geopolitical to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Xi Geopolitical to invest into research and development (R&D) and innovation.
Ability to lead change in Leadership & Managing People field
– Xi Geopolitical 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 Xi Geopolitical in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Xi Geopolitical 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 One Belt One Road: Chinese Strategic Investment in the 21st Century HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Xi Geopolitical in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Xi Geopolitical has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Xi Geopolitical to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses One Belt One Road: Chinese Strategic Investment in the 21st Century | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of One Belt One Road: Chinese Strategic Investment in the 21st Century are -
Workers concerns about automation
– As automation is fast increasing in the segment, Xi Geopolitical 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study One Belt One Road: Chinese Strategic Investment in the 21st Century, is just above the industry average. Xi Geopolitical 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.
Capital Spending Reduction
– Even during the low interest decade, Xi Geopolitical 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.
Slow to strategic competitive environment developments
– As One Belt One Road: Chinese Strategic Investment in the 21st Century HBR case study mentions - Xi Geopolitical 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Kenneth Scheve, Ruxi Zhang suggests that, Xi Geopolitical 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 Xi Geopolitical supply chain. Even after few cautionary changes mentioned in the HBR case study - One Belt One Road: Chinese Strategic Investment in the 21st Century, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Xi Geopolitical vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Xi Geopolitical products
– To increase the profitability and margins on the products, Xi Geopolitical needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Xi Geopolitical 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 - One Belt One Road: Chinese Strategic Investment in the 21st Century should strive to include more intangible value offerings along with its core products and services.
Skills based hiring
– The stress on hiring functional specialists at Xi Geopolitical has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study One Belt One Road: Chinese Strategic Investment in the 21st Century 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 Xi Geopolitical 's lucrative customers.
Interest costs
– Compare to the competition, Xi Geopolitical 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.
Opportunities One Belt One Road: Chinese Strategic Investment in the 21st Century | 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 One Belt One Road: Chinese Strategic Investment in the 21st Century are -
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. Xi Geopolitical 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. Xi Geopolitical 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.
Leveraging digital technologies
– Xi Geopolitical 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.
Using analytics as competitive advantage
– Xi Geopolitical 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 One Belt One Road: Chinese Strategic Investment in the 21st Century - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Xi Geopolitical to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Xi Geopolitical 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Xi Geopolitical 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, One Belt One Road: Chinese Strategic Investment in the 21st Century, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Xi Geopolitical to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Low interest rates
– Even though inflation is raising its head in most developed economies, Xi Geopolitical 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.
Developing new processes and practices
– Xi Geopolitical 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Xi Geopolitical can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Xi Geopolitical has opened avenues for new revenue streams for the organization in the industry. This can help Xi Geopolitical to build a more holistic ecosystem as suggested in the One Belt One Road: Chinese Strategic Investment in the 21st Century case study. Xi Geopolitical can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Xi Geopolitical in the consumer business. Now Xi Geopolitical can target international markets with far fewer capital restrictions requirements than the existing system.
Learning at scale
– Online learning technologies has now opened space for Xi Geopolitical 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Xi Geopolitical 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 Xi Geopolitical to hire the very best people irrespective of their geographical location.
Threats One Belt One Road: Chinese Strategic Investment in the 21st Century External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study One Belt One Road: Chinese Strategic Investment in the 21st Century are -
Regulatory challenges
– Xi Geopolitical 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study One Belt One Road: Chinese Strategic Investment in the 21st Century, Xi Geopolitical 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 .
Stagnating economy with rate increase
– Xi Geopolitical 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.
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. Xi Geopolitical can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Xi Geopolitical 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.
Increasing wage structure of Xi Geopolitical
– 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 Xi Geopolitical.
Environmental challenges
– Xi Geopolitical 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. Xi Geopolitical can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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 Xi Geopolitical in the Leadership & Managing People sector and impact the bottomline of the organization.
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 Xi Geopolitical business can come under increasing regulations regarding data privacy, data security, etc.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
High dependence on third party suppliers
– Xi Geopolitical 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.
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 Xi Geopolitical.
Shortening product life cycle
– it is one of the major threat that Xi Geopolitical is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of One Belt One Road: Chinese Strategic Investment in the 21st Century 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 One Belt One Road: Chinese Strategic Investment in the 21st Century 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 One Belt One Road: Chinese Strategic Investment in the 21st Century 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 One Belt One Road: Chinese Strategic Investment in the 21st Century 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 One Belt One Road: Chinese Strategic Investment in the 21st Century 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 Xi Geopolitical needs to make to build a sustainable competitive advantage.
