Byd Swot Analysis
Strengths:
• BYD has rapidly grown to become the world’s second largest manufacturer of rechargeable batteries.
• BYD has become the largest Chinese supplier (fourth largest global) of lithium ion batteries to cell phone manufacturers.
• BYD has a strong base of workers of 17,000 workers with a daily output of over 2 million units.
• BYD has developed deep capabilities in process engineering enabling it to enjoy a significant cost advantage over global competitors. BYD has significantly lower annual capital expenditure versus typical Japanese firms (as much as 10 times less).
• BYD has continuously invested in both product and process R&D (roughly 2% of revenues) which enabled it to have a better competitive advantage versus other Chinese competitors.
• Availability of Cash after raising capital through an IPO on the Hong Kong stock exchange.
Weaknesses:
• BYD suffers from a high turnover rate of about 10% to 20% in its manufacturing workforce. This is due to the fact that 95% of the workers were young women coming from smaller inland villages throughout china and returning back to their home villages after few years.
• Adopting a labor intensive approach introduces some variability in the production performance.
Opportunities:
• Increasing its capabilities in component manufacturing, BYD can strengthen its position to integrate further into the process of phone assembly. The addition of assembly services would allow BYD to offer a “one stop” solution to OEM’s for the outsourced manufacturing of their products.
• BYD can also explore new vertical opportunities by owning rather than contracting for assets putting more control under its whole supply chain. BYD can start expanding vertically to have a vertical integration of the whole supply chain. 95% of the work is done internally (e.g. design of tooling and molds) putting more processes under its control and allowing getting benefits in both cost and quality.
• Acquiring Qinchuan Auto:
– The assets
• BYD has rapidly grown to become the world’s second largest manufacturer of rechargeable batteries.
• BYD has become the largest Chinese supplier (fourth largest global) of lithium ion batteries to cell phone manufacturers.
• BYD has a strong base of workers of 17,000 workers with a daily output of over 2 million units.
• BYD has developed deep capabilities in process engineering enabling it to enjoy a significant cost advantage over global competitors. BYD has significantly lower annual capital expenditure versus typical Japanese firms (as much as 10 times less).
• BYD has continuously invested in both product and process R&D (roughly 2% of revenues) which enabled it to have a better competitive advantage versus other Chinese competitors.
• Availability of Cash after raising capital through an IPO on the Hong Kong stock exchange.
Weaknesses:
• BYD suffers from a high turnover rate of about 10% to 20% in its manufacturing workforce. This is due to the fact that 95% of the workers were young women coming from smaller inland villages throughout china and returning back to their home villages after few years.
• Adopting a labor intensive approach introduces some variability in the production performance.
Opportunities:
• Increasing its capabilities in component manufacturing, BYD can strengthen its position to integrate further into the process of phone assembly. The addition of assembly services would allow BYD to offer a “one stop” solution to OEM’s for the outsourced manufacturing of their products.
• BYD can also explore new vertical opportunities by owning rather than contracting for assets putting more control under its whole supply chain. BYD can start expanding vertically to have a vertical integration of the whole supply chain. 95% of the work is done internally (e.g. design of tooling and molds) putting more processes under its control and allowing getting benefits in both cost and quality.
• Acquiring Qinchuan Auto:
– The assets