Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana
Identifying the unique U.S. state-level factors that more often give rise to Chinese firm-led investment is the central focus of this article. Looking at Chinese investment in the United States between 2007 and 2011, this article (1) explores the determinants underlying the locational choices of Chinese firms, (2) seeks to understand why some U.S. states receive relatively greater amounts of investment from China, (3) assesses whether prior trends are likely to continue into the future; and--perhaps most importantly--(4) seeks to identify what (if anything) the state of Indiana can do to better position itself to capture greater amounts of Chinese investment moving forward. We recommend the following actions for the state of Indiana: (1) firm targeting--Indiana is a prime FDI target for private, firm-led, greenfield investment; (2) differentiation-- Indiana has distinct advantages over other locations in the Midwest; (3) promotions-- trade missions and overseas office locations are investments, not costs; (4) investments in relationships--cultural sensitivity and friendship make the difference.
Authors :: Dennis Kelley, Joshua Klatte Coner, Marjorie Lyles
Swot Analysis of "Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana" written by Dennis Kelley, Joshua Klatte Coner, Marjorie Lyles includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Indiana Chinese facing as an external strategic factors. Some of the topics covered in Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana case study are - Strategic Management Strategies, and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana casestudy better are - – digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, supply chains are disrupted by pandemic , geopolitical disruptions, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China,
challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Indiana Chinese, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Indiana Chinese 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 Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana can be done for the following purposes –
1. Strategic planning using facts provided in Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana case study
2. Improving business portfolio management of Indiana Chinese
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 Indiana Chinese
Strengths Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Indiana Chinese in Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana Harvard Business Review case study are -
High brand equity
– Indiana Chinese has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Indiana Chinese to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Indiana Chinese in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Indiana Chinese is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Indiana Chinese is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Indiana Chinese has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Indiana Chinese 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.
Innovation driven organization
– Indiana Chinese is one of the most innovative firm in sector. Manager in Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Indiana Chinese 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 Dennis Kelley, Joshua Klatte Coner, Marjorie Lyles 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
– Indiana Chinese has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana 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.
Highly skilled collaborators
– Indiana Chinese 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 Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management
– Indiana Chinese is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Indiana Chinese 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 Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Indiana Chinese is one of the leading recruiters in the industry. Managers in the Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Leadership & Managing People field
– Indiana Chinese 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 Indiana Chinese in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana are -
Aligning sales with marketing
– It come across in the case study Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana 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 Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana can leverage the sales team experience to cultivate customer relationships as Indiana Chinese is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Indiana Chinese 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.
Products dominated business model
– Even though Indiana Chinese 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 - Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Indiana Chinese 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.
Low market penetration in new markets
– Outside its home market of Indiana Chinese, firm in the HBR case study Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana, in the dynamic environment Indiana Chinese has struggled to respond to the nimble upstart competition. Indiana Chinese has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana 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 Indiana Chinese 's lucrative customers.
Slow to strategic competitive environment developments
– As Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana HBR case study mentions - Indiana Chinese 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.
Interest costs
– Compare to the competition, Indiana Chinese 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Indiana Chinese is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– After analyzing the HBR case study Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana, 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.
Opportunities Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana | 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 Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana are -
Better consumer reach
– The expansion of the 5G network will help Indiana Chinese to increase its market reach. Indiana Chinese 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Indiana Chinese 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
– Indiana Chinese can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana 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.
Developing new processes and practices
– Indiana Chinese 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.
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. Indiana Chinese can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Indiana Chinese can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Indiana Chinese 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.
Learning at scale
– Online learning technologies has now opened space for Indiana Chinese 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.
Creating value in data economy
– The success of analytics program of Indiana Chinese has opened avenues for new revenue streams for the organization in the industry. This can help Indiana Chinese to build a more holistic ecosystem as suggested in the Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana case study. Indiana Chinese can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– Indiana Chinese 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Indiana Chinese 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 Indiana Chinese to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Indiana Chinese 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.
Leveraging digital technologies
– Indiana Chinese 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.
Threats Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana are -
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Indiana Chinese 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 Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana .
Increasing wage structure of Indiana Chinese
– 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 Indiana Chinese.
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. Indiana Chinese 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.
Regulatory challenges
– Indiana Chinese 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.
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. Indiana Chinese can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Indiana Chinese in the Leadership & Managing People sector and impact the bottomline of the organization.
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. Indiana Chinese needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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 Indiana Chinese business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Indiana Chinese 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. Indiana Chinese can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
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 Indiana Chinese.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Indiana Chinese 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
– Indiana Chinese 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.
Weighted SWOT Analysis of Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana 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 Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana 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 Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana 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 Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana 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 Chinese Foreign Direct Investment in the United States: Location Choice Determinants and Strategic Implications for the State of Indiana 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 Indiana Chinese needs to make to build a sustainable competitive advantage.
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