TO: SIR AZFAR WASIM

BY: HAROON SHERAZ (01-396222-009)

SUBJECT: FUNDAMENTALS OF SCM

1/13/2023
DALIAN TALENT: STRATEGIC
BUSINESS CO-OPERATION AND
COLLABORATION
Case Study
HAROON SHERAZ (01-396222-009)

Table of Contents
Summary of Whole Case Study....................................................................................................... 2
SWOT ANALYSIS .............................................................................................................................. 3
Dalian Talent Co. Ltd. (Talent) .................................................................................................... 3
Strengths: ................................................................................................................................ 3
Weaknesses: ........................................................................................................................... 3
Opportunities: ......................................................................................................................... 3
Threats: ................................................................................................................................... 3
Daytoy Group (Daytoy) ............................................................................................................... 4
Strengths: ................................................................................................................................ 4
Weaknesses: ........................................................................................................................... 4
Opportunities: ......................................................................................................................... 4
Threats: ................................................................................................................................... 4
HAROON SHERAZ (01-396222-009)

Summary of Whole Case Study

The case study details the history and development of two companies, Dalian Talent Co. Ltd.
(Talent) and Daytoy Group (Daytoy), and their strategic business partnership.

It begins with the early days of Talent, when its founder, Wang, was still working for another
company and began informally consulting for Daytoy's founder, Joly, on product development.
Eventually, Wang left his job to start his own factory, which began exporting candle products to
Daytoy. However, a major manufacturing problem led to a loss of $300,000 and prompted Wang
to establish his own company, Talent, which aimed to improve upon the poor quality and lack of
expertise of China's candle industry at the time.

As the global economy boomed in the late 1990s, Talent and Daytoy both experienced rapid
growth. Talent took advantage of China's reform and opening up policies, and the high demand
for candles in Europe and the United States. However, Daytoy faced accusations of exploitive
employment practices and environmental issues related to its materials. To address these
concerns, Daytoy implemented a new corporate sustainable development strategy, the Daytoy
Way (Dway), which placed strict requirements on its suppliers, including Talent. Talent was able
to meet these requirements and improve its own business processes to become certified in
various systems and a member of the International RSPO.

However, the candle industry faced a major setback in 2005 when the United States launched an
antidumping inquiry against Chinese candle imports, followed by similar inquiries in Europe. This
greatly affected the competitiveness of Chinese companies in these markets, and Talent's exports
fell by 70% and its workforce was reduced. In order to overcome this obstacle, Talent decided to
rebuild overseas by setting up factories in Thailand and Poland, taking advantage of the lower
tariffs and other benefits in those countries. During this expansion period, Daytoy provided
Talent with professional support, technical expertise, legal advice, and financial support.

In 2017, Talent adopted a new development strategy to make its brand, Aroma Naturals, a world-
class fragrance brand, emphasizing art, nature, and harmony. However, Daytoy was beginning to
lag in terms of innovation and its founder's mindset was becoming outdated. Talent helped
Daytoy implement various innovations to improve its work efficiency and shorten its
development cycle. Talent also took on more initiative in the partnership, and its responsibility
shifted from original equipment manufacturer to original design manufacturer.
HAROON SHERAZ (01-396222-009)

SWOT ANALYSIS
Based on the information provided in the case study, a SWOT analysis of Dalian Talent Co. Ltd.
(Talent) and Daytoy Group (Daytoy) would be:

Dalian Talent Co. Ltd. (Talent)

Strengths:
• Strong and long-standing relationship with Daytoy Group, a leading global furniture and
home furnishing retailer

• Strong supply chain management, manufacturing technique, and production capacity

• Strong focus on sustainability and corporate social responsibility

• Ability to adapt to changing market conditions and tariffs through global expansion and
development of new technologies

• Strong reputation and brand recognition in the international market

Weaknesses:
• Heavy reliance on Daytoy as a client, with orders from Daytoy accounting for 25% of all
volume

• Limited production capacity, which could be a problem in fulfilling large new orders

• Dependence on international market, which could be affected by protectionist measures

Opportunities:
• Potential to expand production capacity by adding facilities and workers

• Potential for growth in the international market for candles

• Potential for new partnerships with other international retail chain enterprises

Threats:
• Competition from other candle manufacturers in the international market

• Changes in demand for candles due to shifts in consumer preferences

• Tariffs and other protectionist measures in key markets such as the United States and
Europe

• Possibility of negative impact on relationship with Daytoy if they are unable to fulfill new
order
HAROON SHERAZ (01-396222-009)

Daytoy Group (Daytoy)

Strengths:
• Strong reputation and brand recognition in the international market

• Strong focus on sustainability and corporate social responsibility through Dway strategy

• Strong and long-standing relationship with Dalian Talent Co. Ltd. (Talent), a reliable
supplier for candles

• Widely expanded internationally and established a strong presence in key markets such
as the United States, Germany, Spain, and the United Kingdom

• Strong focus on customer needs and innovative design concepts

Weaknesses:
• Reliance on suppliers from Asia-Pacific region, which can be affected by changes in
demand, tariffs and other protectionist measures

• Accused of exploitive employment practices and environmental issues in the past

• Limited control over the production process as they rely on suppliers to produce the
candles

Opportunities:
• Potential for new partnerships with other suppliers and manufacturers

• Potential for growth in the international market for candles

• Potential for new product development and innovation

Threats:
• Competition from other furniture and home furnishing retailers

• Changes in demand for candles due to shifts in consumer preferences

• Tariffs and other protectionist measures in key markets such as the United States and
Europe

• Possibility of negative impact on relationship with Talent if they are unable to fulfill new
order