Case Study---Giant
...technologies to create families of new products II The core resource of Giant and its relationship with the strategies for its second revolution Giant¡¦s second revolution can be seen as a business diversification, was a bid to avoid rampant crisis in IT industry at that time. Its effort evolved an innovation of personnel structure, a diversion of investment and production classification and business promotion and marketing campaign strategies. As a result, in just a half of a year, its employees had risen to over 2,000, sales experienced significant hike and it had also become the focus for media from the entire country. Was this second miracle because of its core resource? Now let¡¦s define what core resources Giant possessed. Look back to its previous thriving days, printing and desktop layout program M-6401 and later its Chinese version, desktop and laptop computer, as well as its financial and anti-virus programs were all its featured and overwhelming products to emerge over competitors. Its core resource therefore can be defined as competitive computer software and hardware line with latest integrated technologies and a group of specialists. Apparently, these core resources don¡¦t really have something to do with its second successful revolution in fields of tourism, real estate, pharmaceuticals, and health products, nor with its hundreds thousand people lighting campaign and sales promotion explosion. III A SWOT analysis for Giant¡¦s second blossom and the correspondent approaches Strength ƒÜ A powerful and integrated business strategy Swift reactions to the external environment change; speeding diversion to non-stagnant industries; strategic adoption of large scale marketing campaign and media; etc. ƒÜ Strong financial condition, physical, human, organizational assets Billions yuan of assets includes tourism, real estate and land; 2,000 employees, hundreds of experts, 288 subsidiary companies and many intangible assets like technologies in computer and pharmaceuticals. ƒÜ Strong brand name Giant had been widely known and got good reputation. ƒÜ Widely recognized market leader Its pharmaceutical products gained good reputation; its computer products were indeed the leading ones. ƒÜ Strong advertising Giant was completely under the spot light for hundreds of media ƒÜ Product innovation skills It launched over 30 new categories and generations of products in computer, pharmaceutical and health. Weaknesses ƒÜ Internal operating problems The expend of Giant¡¦s human resource was too fast and unsustainable; seriously lack of time to devise and implement corresponding company culture and appropriate management measures; large number of subsidiary companies and people make the central management policy and control down to every person and opinions feedback to central management impossible; lack of elite group of cadre and trusted people. ƒÜ Falling behind in R&D Fast growth would easily trigger crisis like quality control, inadequate technological research and development, and thus results in many technical problems and customers¡¦ complains. Opportunities ƒÜ Serving additional customer groups By stepping into industries like tourism, medicine and health products, Giant may diversify its customer niche to various ranges of people. ƒÜ Expending to new geographic areas Giant had occupied many major cities and definitely would expand. ƒÜ Expanding production lines From tourism, medicine and health products, there may be hotel, food and beverage come out next. ƒÜ Transferring skills to new products Giant¡¦s multi production lines may bring more experience to yield other relating products. ƒÜ Take market share from rivals and acquisition of rivals Notable sales results and large capital may create this opportunity. ƒÜ Alliances or JVs to expand coverage Alliances and coverage may expand base on the good performance. ƒÜ Openings to exploit new technologies and brand name/image Good sales performance, speeding diversification and ultimate market coverage will bring fund to exploit more technologies and set up brighter image. Threats ƒÜ Adverse shifts in trade policies Stricter control may be imposed for pharmaceutical products ƒÜ Vulnerability to business cycle Extreme sizable sales may trigger poor customer service, employee training, crude standard, etc. Solutions for the SWOT analysis According to the SWOT analysis, Giant scored much more strength and opportunities than its weaknesses and threats. Thus, Giant generally was performing very well. However, besides maintaining what it has right now, decisive approaches must be devised and implemented as soon as possible to prevent from huge problems occurring. What are the serious potential blades under its arms? Obviously, they ambushed in the back of the fast growing in number of employees, subsidiary companies, relatively unfamiliar production lines, etc. The central management failed to stop a while and look into the question: Are we ready for the rapid expanding? What will happen if Giant failed to pay attention to this problem? 1. Detachment of management between headquarter and subsidiaries; 2. Less loyalty from big number of newcomers; 3. Lack of corresponding management for newcomers; 4. Less emphasis on core resources; 5. Large unfamiliar fields and more risks; 6. Less strength for standard maintaining; 7. Potential financial crisis for fast growth of number of employees; 8. Becoming target for more rivals. Thus, in order to avoid above mentioned, Giant should 1. Immediately halt its expanding and cool down the gro...