SWOT of Haidilao
SWOT is a strategic framework that stands for Strengths, Weaknesses, Opportunities, and
Threats that companies face in both their macro and internal environment in which they
operate. In most cases, Weaknesses and Strengths are confined to the company’s internal-
resources, limitations and skills. On the other hand, Threats and Opportunities refer to
factors which are evaluated in light of the existing market conditions alongside factors such
as economical, political, technological, health& safety, legal and environmental
1. Strengths 2. Weakness
Uniqueness of service Business model can be easily
High quality of product replicated
(original taste of their own High labor cost
condiments and soup bases) Organization culture
Strong brand image
Intellectual property
3. Opportunities 4. Threats
Hyper competition in hotpot
Technology industry
Vietnam's GDP growth rate is Covid 19 (economic depression,
high change eating habit)
Hot pot as a local characteristic, Strict government regulations
popular in VietNam (labor, food safety ,etc)
1. Strengths
Among Haidilao’s Strengths is its superior service and product quality.
About service, customer who ever come to Haidilao always impressed by their unique
services. Because too popular, many people are waiting for the seat and normally the
waiting will last an hour. During the waiting, server will polish your shoes, manicure your
nails, and deliver special snacks etc. Last but not least, the smile of the server in
HaiDiLao transfers happiness to you. All these characters are highly speaking both by its
customers and competitors. Moreover, Haidilao's food and beverages served in their
restaurants are considered valuable due to its original taste of their own condiments
and soup bases that it is developed by the R&D department. In-house developed and
produced goods enhance the independence of the firm from its food suppliers and
contribute to the standardization of the ordering system, which is rare and difficult to
imitate at the same time. This is among the features that have enhanced customer
loyalty towards the company. According to a survey, Haidilao emphasis on providing
quality of services and products has worked for its own good. Accordingly, Haidilao is
able to compete successfully on the hotpot industry market.
The Haidilao is one of the hotpot company most premium, well known and famous
brands. The organization has a developing populace of steadfast clients, which adds to
the soundness of the business. In Hanoi, despite the complicated covid 19 situation,
Haidilao still works well and opens 3 more restaurants in 2021.
Haidilao’s intellectual property has also been its source of strength which has propelled
it to a higher competitive position. Currently, this company harbors an array of
copyrights and patents some of which are both from creators while others are gained
through innovation. This has helped in motivating its people, improving its customer
service as well as leverage on its competitive strategy.
2. Weakness
Haidilao’s business model is easily replicable despite the high number of copyrights
and patents that the firm harbors. With the industry which this firm operates it, the
intellectual property rights are difficult to be implemented. Though effective in
thwarting same size competition, it is not easy to stop start-ups from disrupting the
markets at different levels.
Haidilao’s labour cost as a percentage of sales is high relative to peers. As Haidilao
may not want to compromise on its service quality, the company could face more
labor cost pressures ahead.
Haidilaos organization culture has also proved to be its source of weakness. In
particular, the culture has create wars within its different departments, making some
managers unwilling to share some crucial information. This could subsequently lead
to limitations on future development since the withheld information could reduce
opportunities in the market base.
3. Opportunities
The development of information and communication technologies has led towards
the adoption of innovative marketing techniques to enhance collaboration with
customers. Use of social media has become common in a modern business
environment. Haidilao can leverage the opportunities offered by social media
marketing to improve business performance. Technological trends can be used to
start the creative social media campaigns for developing online brand communities.
Haidilao needs to consider how new technologies influence the firm’s value chain
and prevailing cost structure. Research and development activities are highly
important in an environment characterized by creative. In such an environment,
Haidilao should invest in disruptive technologies to maximize the profits and re-
invest the profits for future disruptive technologies.
The economic development of a country directly affects the operation of the
organization. Vietnam's economy is developing (the GDP growth rate is among the
top in the world) which offers extensive development opportunities for Haidilao. This
leads to consumers spending more on more premium services like haidilao's target
audience.
It can be seen that, in Vietnam, in the top choices of people when going out to eat
and gather, especially young people, hot pot is always a top priority.
4. Threats
Nowadays, the competition in the hot pot industry has increased significantly lead to
reducing the cost. Haidilao can exploit the use of e-commerce and social media to
reach its customers, most of its competitors can too. Many brands like Manwah,
Kichi, Hutong also offer the same quality as Haidilao but at a slightly lower price. In
addition, the standard pricing culture in the industry in which Haidilao operates is
also an obstacle to its growth. Therefore, the company cannot raise prices even if its
premium services are worth it.
Haidilao's profitability could be threatened by the economic downturn caused by
covid 19 from 2019 up to now. When consumers have reduced incomes, they will
look for a brand with lower quality but cheaper price to match their budgets during a
recession. In addition, during the epidemic period, the government encourages
people to limit eating and gathering. This changes the eating habits of most people.
They will just have meals at home or order fast food through apps like now, grab,
beamin instead of going to Haidilao.
The issue of government regulations is also a matter of concern for companies such
as Haidilao. The fast changing government regulations especially those related to
labor safety, food safety and environmental concerns warrants operational and
management changes that could be costly to the firm.
