China Vanke (A-1), Chinese Version SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of China Vanke (A-1), Chinese Version
As China's largest homebuilder, China Vanke Co. Ltd. (Vanke) was facing an industry downturn sparked by strong government intervention. Faced with falling prices, Vanke's president must decide whether to keep the company's pricing and product positioning intact, and how aggressively to pursue its greener building strategy. Follow-up cases present additional decisions, including how, and how aggressively, to improve safety and quality (A-2), and whether to expand into other asset classes, such as commercial real estate.
Authors :: Lynn S. Paine, John D. Macomber, Keith Chi-ho Wong
Swot Analysis of "China Vanke (A-1), Chinese Version" written by Lynn S. Paine, John D. Macomber, Keith Chi-ho Wong includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Vanke Aggressively facing as an external strategic factors. Some of the topics covered in China Vanke (A-1), Chinese Version case study are - Strategic Management Strategies, Leadership, Personnel policies, Policy and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the China Vanke (A-1), Chinese Version casestudy better are - – there is backlash against globalization, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion,
increasing transportation and logistics costs, increasing energy prices, etc
Introduction to SWOT Analysis of China Vanke (A-1), Chinese Version
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in China Vanke (A-1), Chinese Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Vanke Aggressively, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Vanke Aggressively 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 China Vanke (A-1), Chinese Version can be done for the following purposes –
1. Strategic planning using facts provided in China Vanke (A-1), Chinese Version case study
2. Improving business portfolio management of Vanke Aggressively
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 Vanke Aggressively
Strengths China Vanke (A-1), Chinese Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Vanke Aggressively in China Vanke (A-1), Chinese Version Harvard Business Review case study are -
Analytics focus
– Vanke Aggressively 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 Lynn S. Paine, John D. Macomber, Keith Chi-ho Wong 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.
Superior customer experience
– The customer experience strategy of Vanke Aggressively in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Vanke Aggressively
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Vanke Aggressively does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Leadership & Managing People field
– Vanke Aggressively 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 Vanke Aggressively in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Vanke Aggressively has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Vanke Aggressively 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.
Ability to recruit top talent
– Vanke Aggressively is one of the leading recruiters in the industry. Managers in the China Vanke (A-1), Chinese Version are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Leadership & Managing People industry
– China Vanke (A-1), Chinese Version firm has clearly differentiated products in the market place. This has enabled Vanke Aggressively to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Vanke Aggressively to invest into research and development (R&D) and innovation.
Training and development
– Vanke Aggressively has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in China Vanke (A-1), Chinese Version 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
– Vanke Aggressively 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 China Vanke (A-1), Chinese Version HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Vanke Aggressively 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.
Cross disciplinary teams
– Horizontal connected teams at the Vanke Aggressively 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.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Vanke Aggressively digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Vanke Aggressively 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.
Weaknesses China Vanke (A-1), Chinese Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of China Vanke (A-1), Chinese Version are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the China Vanke (A-1), Chinese Version HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Vanke Aggressively has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Vanke Aggressively is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Vanke Aggressively needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Vanke Aggressively to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Vanke Aggressively 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study China Vanke (A-1), Chinese Version, in the dynamic environment Vanke Aggressively has struggled to respond to the nimble upstart competition. Vanke Aggressively has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study China Vanke (A-1), Chinese Version, is just above the industry average. Vanke Aggressively 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.
Products dominated business model
– Even though Vanke Aggressively 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 - China Vanke (A-1), Chinese Version should strive to include more intangible value offerings along with its core products and services.
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 Vanke Aggressively supply chain. Even after few cautionary changes mentioned in the HBR case study - China Vanke (A-1), Chinese Version, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Vanke Aggressively vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, Vanke Aggressively 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 China Vanke (A-1), Chinese Version 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 Vanke Aggressively 's lucrative customers.
Interest costs
– Compare to the competition, Vanke Aggressively 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.
Aligning sales with marketing
– It come across in the case study China Vanke (A-1), Chinese Version 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 China Vanke (A-1), Chinese Version can leverage the sales team experience to cultivate customer relationships as Vanke Aggressively is planning to shift buying processes online.
Opportunities China Vanke (A-1), Chinese Version | 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 China Vanke (A-1), Chinese Version are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Vanke Aggressively 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 Vanke Aggressively can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Vanke Aggressively 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 Vanke Aggressively to hire the very best people irrespective of their geographical location.
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 Vanke Aggressively 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.
Creating value in data economy
– The success of analytics program of Vanke Aggressively has opened avenues for new revenue streams for the organization in the industry. This can help Vanke Aggressively to build a more holistic ecosystem as suggested in the China Vanke (A-1), Chinese Version case study. Vanke Aggressively can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Learning at scale
– Online learning technologies has now opened space for Vanke Aggressively 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.
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 Vanke Aggressively in the consumer business. Now Vanke Aggressively can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Vanke Aggressively 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 China Vanke (A-1), Chinese Version - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Vanke Aggressively to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Vanke Aggressively can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. China Vanke (A-1), Chinese Version 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Vanke Aggressively 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, China Vanke (A-1), Chinese Version, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Vanke Aggressively 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.
Leveraging digital technologies
– Vanke Aggressively 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.
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. Vanke Aggressively can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats China Vanke (A-1), Chinese Version External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study China Vanke (A-1), Chinese Version are -
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 Vanke Aggressively in the Leadership & Managing People sector and impact the bottomline of the organization.
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 Vanke Aggressively is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Vanke Aggressively 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 China Vanke (A-1), Chinese Version .
Increasing wage structure of Vanke Aggressively
– 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 Vanke Aggressively.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Vanke Aggressively 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.
Consumer confidence and its impact on Vanke Aggressively demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
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 Vanke Aggressively.
High dependence on third party suppliers
– Vanke Aggressively 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.
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. Vanke Aggressively can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Vanke Aggressively 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. Vanke Aggressively can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Vanke Aggressively with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Weighted SWOT Analysis of China Vanke (A-1), Chinese Version 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 China Vanke (A-1), Chinese Version 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 China Vanke (A-1), Chinese Version 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 China Vanke (A-1), Chinese Version 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 China Vanke (A-1), Chinese Version 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 Vanke Aggressively needs to make to build a sustainable competitive advantage.