Digital Transformation Challenges: Leasun Case Study Analysis

This case study examines the digital transformation of Leasun, a Chinese canned food company facing challenges in a dynamic market. Leasun, traditionally operating offline, seeks to leverage digital platforms to increase sales, retain customers, and overcome issues like unclear growth and low-profit margins. The analysis includes the company's situation, evaluation of problems, SWOT, PEST, and Porter's Five Forces frameworks. The case study proposes solutions such as adopting a lean transformational strategy, focusing on customer-oriented online platforms, and establishing an e-commerce presence. Financial analysis, including profitability ratios, is also provided. The study aims to provide insights into digital transformation challenges and offer recommendations for Leasun's sustainable growth in the competitive Chinese market.

Integrated Case Study

Executive summary
Digitally transformation of the businesses are mainly described as the process for
transforming and adopting various ways to increase the demand of the products offered to attain
and retaining the loyal consumers market while operating in dynamic surrounding as china. In
this report by analysing the Leasun issues with transforming the business at the digital platform
as for ever-increasing the sales of the product. The company is taking this decision as by facing
various issues mainly the unclear growth, offering low value added products and highly
homogeneous in nature with this it is able to earn the low profit margins while operating in the
competitive market and changing times. The Leasun is the food canned company established in
china and getting benefit from the government of the country for Selling canned food. With
adopting the online channels could mainly emphasize on using and adopting the large consumers
market as for improving the consumer's response by attracting large number. As by adopting the
lean transformational strategy for marketing the company products helped the company to grow
by emphasizing on customer oriented and using different digital platforms for increasing the
sales. Thus, with adopting various digital and establishing the shopping online supermarket
helped th company in attaining growth by increasing its sales.

TABLE OF CONTENT
INTRODUCTION ..........................................................................................................................4
MAIN BODY...................................................................................................................................4
Describing the situation of the case ............................................................................................4
Evaluation of the problems and plan of analysis:........................................................................6
An assessment of current position of the Leasun.........................................................................7
SWOT framework........................................................................................................................7
PEST framework..........................................................................................................................8
PORTER FIVE FORCES ...........................................................................................................9
Proposed solution to the problems ............................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Digital transformation is mainly the prices which aims in defining and using different
technologies as for promoting the business for meeting the changing needs and expectations of
the business in order to attain profits. The Leasun was mainly recognised as the canned food
manufacturing company which is located in the china and serving the food by producing the
yellow peaches and the canned fish to large number of consumers. Due to highly digitally
transformation of company by shifting the digital platform as it is mainly the traditional company
serving offline. But due to the changing times and the new technical advancements the company
is shifting at the online platform due to facing major issues of unclear growth, also by serving the
value added products and gaining low profit margin due to high homogenisation this results in
attaining low profits of the company while operating in highly developed market as china. As by
taking the decision for transforming the company at the digital platform from the traditional way
for ever-increasing the online sales of the products being offered to retain and increase the
consumers offering.
Aim: The aim of this case study is to research about the problems and issues and giving
solutions to overcome the issues faced by the Leasun located in china.
Objectives:
 To provide detail about the issues faced by the Leasun
 To analyse in detail concepts of digital transformation and its impact
 To recommend ways of overcoming the issues faced by Leasun.
Further more, this report is mainly structured including the executive summary, describing in
brief about the problem faced and proposing the plan for the problem with using relevant
literature. Also analysing the current position facing the company while operating in china.
Lastly, generating different ideas and solutions with adopting the ways to mitigate the issues and
limitations of the study.
MAIN BODY
Describing the situation of the case
Leasun was mainly recognized and established as the strongly canned food company.
Due to the transformation and the recent time with new introduction of technologies the
company decide to adapt and transform its operations by going digital. As while facing different
issues due to the digital technologies and the latest technical advancements, the company is

mainly facing the unclear growth, low value added products and earning the low profit margins
with earning only 5 percent. As With adopting the digital changes the company is mainly it
helped the company to attaining growth and become the leading Chinese brand for serving the
canned food to the consumers (Leasun: Digital Transformation of a Traditional Canned Food
Company, 2022). With the increase trends to the digital trends of using the internet , emerging e-
commerce platforms, also marketing and producing with using different strategies. Being
established in china it is gaining benefits from the government as it is attracting and funding
sources of highly investors.
Also, the issues facing about the servicing seasonally food and reducing the operational
risk the company adapted to balance its workloads as to serve the best canned food by
controlling quality with using the latest technologies. As the Leasun dilemma with relying on the
large supermarkets for promoting the brand helps in building the market leader. As by embracing
the internet and the internet and the digitalization in the company helped in earning growth with
improving the response gained from the market of the consumers (Agnihotri, 2021). Further
more, As by transforming digitally mainly induces the firm to opt for the lean digital
transformational stagy this helps in identifying needs for serving the best products with focusing
on the customer oriented online platform and digitalizing their internal operations. With
developing the e-commerce business and introduced the T-mall online supermarket for ever-
increasing the purchasing on using online platform. Also, the company mainly digitalized is data,
also data mining, digitalize its internal operations and involving different human resources with
transforming the human resources organizational structure by hiring the younger employees for
operating the new and online channels.
In the case of Lin Nan mentioned in the case study, the company owned by him that is
Dalian Leasun Food Co. Ltd. is a food canned company dealing with various food items. The
company has always focused on its digital transformation to expand its area of operations in the
online sector. The main motive of the firm is its growth rates in terms of both traditional
marketing and online reach (Appio and et.al., 2021). The demand for their products was quite
impressive and massive until the problems relating to the survival in the food industry began to
arise. The target consumers were always the younger generation in relation to which the digital
transformation was always focused on.

The company following the hierarchical structure in nature which aims in defining about
the chain of command and diversifying the positions in the company as for serving large number
of consumers in china. Further more for marketing the products as for attracting large number of
consumers for purchasing the canned food products (Ziółkowska, 2021). Also, the company is
mainly using the online and offline channels for distributing the products also by hiring the wide
range of distributors for serving wide of consumers while producing in the china. As with
charging the high prices with being established as the first canned food product industry helps in
gaining profit to the company.
The financial position of the company mainly aims in defining and projecting the balance
sheet, income statement and the ratios which helps in showing profitability:
Balance sheet:

Income statements:
Ratios:
Gross Profit Margin
Gross Profit 120000
Sales Revenue 200000
Formula GP/Sales Revenue*100
GP margin 60.00%
The gross profit margin is mainly used for describing the profit margin that the business
made after spending and paying all the direct costs for operating the business. Thus, the company
is attaining GP margin around 60% which is deriving the good position by deriving its earning.
Net profit margins
Net profit 92790

total revenue 120000
formula NP/total revenue*100
NP margin 77.33%
By calculating the net profit margins it helps in describing about the net profit earned while
operating businesses. With attaining 77% new profit margins displays about the company is
earning high money for operating and producing the products.
Return on assets
net income 92790
total assets 105650
formula net income/total assets
Return on assets 87.83%
Return on assets mainly aims in describing about the efficiency of the company while using its
assets which helps in generating profits. With earning the 87% return on the assets by the
company helps in defining the company is generating high profits.
inventory turnover:
COGS 80000
Average inventories 15000
formula COGS/average inventories
Inventory turnover: 5.3333333333
The inventory turnover ratio is mainly defined as the time and days taken to sell the products of
the company. With high turnover ratio represents high sales of the products being sold by the
company. With representing 5 times the company is able to restock and sell the products also
maintaining god inventory.
debt to asset ratio:
Total debt 7000
Total assets 105650
Formula total debt / total assets
Debt to asset ratio 0.0662565073

The company used to compare the debt obligations with the total company assets.
fixed assets turnover:
net sales 200000
average net fixed assets 60000
formula net sales/ average net fixed assets
fixed assets turnover: 3.3333333333
The fixed assets turnover ratio help in defining about the efficiency of the company by
generating sales from the fixed assets.
Current ratio
Current assets 46650
Current
liabilities 74000
formula current assets/current liabilities 0.6304054054
With calculating the current ratios helps in determining the ability repay the short term
obligations in a year by the company.
quick ratio
Current assets-
inventory 31650
current liabilities 74000
formula Current assets-inventory/current liabilities 0.4277027027
With calculating the quick ratio it determines the capacity of the company to pay the current
liabilities without obtaining any financing.
Thus, with determining the rations and displaying the income statement and the balance
sheet results in determining the financial position of the company while operating in dynamic
environment.

gross profit margins
net profit margins:
Return on assets:
return on net worth:
current ratio:
quick ratio:
inventory to net working capital:
debt to equity ratio
debt to asset ratio:
long term debt to equity ratio:
total assets turnover
fixed assets turnover:
inventory turnover:

Evaluation of the problems and plan of analysis:
In relation to their business expansion, the firm started to face many problems and issues
regarding both financial and non financial aspects. The political and legal amendments
concentrating on the food items were imposed that hit the firm's business operations in a
maximum limit. Since the firm did not have any other option rather than following these
amendments, it caused a major fall down in overall optimization of the resources. Apart from the
legalities and political issues, the firm even faced some economical and technological
imbalances in the course of their operations such as low growth rates, lack of proper industry
structure, poor inventory management, lack of proper utilization of innovational and
technological background, low annual income and revenue, low profit margins, high cost of
production and low output rates, etc. All these problems were related to one principal issue that
is improper decision-making strategies. The firm needs to make some changes in their decision-
making, so that they can again achieve that long lost image and sustainability in the food
industry if they want to continue their operations (Vial, 2021). The decision-making strategy was
not efficient enough and it was not properly analysed as to which areas need specific attention
and which areas are less affected. The improvements analysed were not effective enough and did
not even set a goal towards which the firm should direct its overall operational activities. Their

strategy of using offline mediums for their brand promotion did not succeed in this tech
innovative world of young generation.
From the analysis of problems mentioned in the case study, it has been observed that the
problems the firm is facing is due to the geographical changes and imbalances in the region it
operates in, because of which the technological an innovational activities are also inefficient to
bring back the growth opportunities for the firm. From carefully discovering problems
mentioned in the case it can be identified that the firm is easily prone to economical and
ecological variances that can occur unexpectedly in the internal environment and specific care
and awareness is needed to solve these (Dwivedi and et.al., 2021). The plan analysis says that
there are problems related to financial and profitability rates. Some factors that lead to financial
problems can be counted under the development and launching and introduction of advanced
production techniques. The technological and innovative tactics were formed in the way that
caused the firm high cost of production and the rate of output did not much. With these the
demand and supply rates for products increased and eventually, making the competitive levels to
increase at an intense rate. The target audience of the firm were young generation which
demanded more advanced distribution channels that could meet their requirements of the tech
and innovative environment (Nadkarni and Prügl, 2021). However, as a result of the financial
crisis, the firm had to go through the traditional way of reaching out to its customers in order to
save themselves from this crisis. These efforts were not appreciated by the customers, thus,
leading to the downfall of the firm. If the firm wants to put an end to the above mentioned
problems and issues faced, it must go for an effective marketing strategies, understand the
importance of planning and organizing the activities of each factor affecting the business
operations.
Analysis and findings
An assessment of current position of the Leasun
For currently assessing the position of the Leasun with using different concepts, models
and theories. As for transforming the company for shifting as for transforming on using the
online platform.
SWOT framework
Strengths
 Being operated as one of the largest
Weakness
 with wide range of availability of

canned food products with serving wide
range of consumers while operating in
the dynamic market.
 High available of the materials to bes
served for majorly producing the
canned food products helps in globally
recognising while operating in the
dynamic market.
 With gaining benefits from the
government with the high level of
investment helps in gaining the large
market share for serving wide range of
consumers.
 Adopting wide range of innovation
techniques help the company to grow
and serve the large market with the
canned food products.
seasonal food products impact the
company and its operations with
earning profits.
 With transforming the business it
reduced the profits by adopting wide
range of technologies for growing sales.
 The lack of resources to adopt and
transform the environment of business
impacts its operations.
Opportunities
 while entering and transforming the
business into the online Selling with
adopting the social media and using
websites helps in growing sales of the
company to attain wide range of profits.
 With transforming and adopting
various digital methods help in
attracting large number of younger
consumers in the china market.
Threats
 With complying all the changing rules
an relation to the government impacts
its business and internal operations.
 covid pandemic impacted the company
and its operations.
 With revising the organizational
structure it impacts in serving and its
internal resources.
PEST framework
Political factor: While operating in the china market, the changing rules and regulation
of the government impacts the company and its internal operations in serving the canned food

products to wide range of consumers while serving in the dynamic market (Verhoef and et.al.,
2021). Also the new taxes and higher imposition of the laws for operating the business impact in
serving the canned products while operating in the dynamic market, for this the political stability
helps in operating and serving the products in china.
Economic factors: The pricing of food products being served in china and the income
level of the individual involving in the country impact in obtaining the products (Tomyuk,
Diachkova and Novgorodtseva, 2022). The wages, inflation rates and Exchange rates impact the
canned food business to wider extent.
Social factors: The changes in the demographic structure of the country, with the
changing demand of the consumers and their taste and preferences also their lifestyle patterns
impacts the company to attract the youth age and serve these consumers for attaining higher
sales.
Technical factors : Due to the technical changes while operating and serving in the
dynamic market, the main factor impacting the company is to operate with using the traditional
means by serving offline with al the products (Ebert and Duarte, 2018). With the internet and
digitalisation trends grown in market impact th company and its operations o adopt the online
channels as to serve large number of consumers in the dynamic market as to grow the sales and
earn high level of revenue by being established as the first and highly demanded canned food
industry.
Thus, with analysing and using the pest helps in defining the factors impacting the
company by being operated in the dynamic market.
Porter five forces
Porter five forces is mainly used for analysing the competitiveness of the company while
operating in the dynamic market.
Competitors rivalry
The competitors level in the chin a market mainly aims in defining the position, as while
operating with low level of competitive with establishing the one of the largest canned food
industry helps in attaining competitiveness by being the only produced to sell the canned food
products.
Substitute products

The substitute level of products mainly defined about the products which attract the
consumers to purchase and switch o the another company as for purchasing the products, but by
being established as the one of the largest manufacturer to produce the canned food products in
the china market helps in attaining competitiveness.
Bargaining power of buyers
The bargaining power of the buyers is mainly defining about the availability of the are
number of buyers for purchasing the products in the dynamic market for purchasing the products
to the company. With establishing the high prices for being the most largest company helps in
describing and attaining competitive position by serving the target consumers market with
attracting the youth age.
Bargaining power of suppliers
The bargaining power of suppliers is low this helps in attaining competitiveness by serving and
attain raw material at low cost.
Threat of new entrants
The thereat of new entrants for establishing the canned food products, with the low
number of new entrants helps in targeting and gaining the large market share by serving the large
consumers market in china helps in gaining support from the government institutions.
Proposed solution to the problems
The Leasun Is facing wide range of challenge while operating in Chinese market. The
solutions for all the problems being faced as:
With facing the unclear growth in the company and experiencing low profit margins, the solution
is to transform and adapt the latest digitalization and technologies for growing and attracting the
new market by serving the canned food (Feroz, Zo and Chiravuri, 2021). Also, for minimizing
the limitation of the human resources, the company is mainly revising its structure for serving
with using the online channels and hiring the younger employees for marketing and promoting
the products as for growing the market and motivating the employees to work.
Further more with the huge financial investment and lack of resources, for this the
company must use the existing resources and capabilities for directing the company and working
to serve in the new direction by reducing the operational cost for improving the performance and
selecting the best alternative for taking decisions. The main limitation of the company is serving
with using traditional methods, for this mainly transforming with using digital platform. The

company must emphasize on using the customer oriented online platform and conducting the e-
commerce business as by partnering with the T mall stores and JD. com this helps the company
in diversifying its range of products and attracting the youth age to purchase the canned food
products.
Recommendation
 As for diversifying and attracting with adopting the new structure the company must
adopt the new packaging with redesigning the caned food products helps in making
transportation in easier manner.
 For fulfilling all the orders for managing the businesses the company must adopt the
tracking system which helps in analysing the required raw materials to produce the
canned products for the offline and online orders.
 Also the Leasun must collaborate with the best and low cost offering suppliers for
obtaining raw materials this helps in attaining high profit margins for the firm which
helps in enchaining the operational capacities.
Thus, with adopting all the solutions helps in minimising the challenges faced by the
Leasun while serving and operating in dynamic market.

REFERENCES
Books and Journals
Agnihotri, R., 2021. From sales force automation to digital transformation: how social media,
social CRM, and artificial intelligence technologies are influencing the sales process. A
Research Agenda for Sales. pp.21-47.
Appio, F.P and et.al., 2021. Digital transformation and innovation management: A synthesis of
existing research and an agenda for future studies. Journal of Product Innovation
Management. 38(1). pp.4-20.
Dwivedi, Y. K and et.al., 2021. Social media adoption, usage and impact in business-to-business
(B2B) context: A state-of-the-art literature review. Information Systems Frontiers. pp.1-
23.
Ebert, C. and Duarte, C.H.C., 2018. Digital transformation. IEEE Softw.. 35(4). pp.16-21.
Feroz, A. K., Zo, H. and Chiravuri, A., 2021. Digital transformation and environmental
sustainability: A review and research agenda. Sustainability. 13(3). p.1530.
Nadkarni, S. and Prügl, R., 2021. Digital transformation: a review, synthesis and opportunities
for future research. Management Review Quarterly. 71(2). pp.233-341.
Tomyuk, O. N., Diachkova, A. V. and Novgorodtseva, A. N., 2022. Global trends in digital
transformation and media positioning of universities in social networks. Цифровая
социология. 5(1). pp.64-75.
Verhoef, P. C and et.al., 2021. Digital transformation: A multidisciplinary reflection and
research agenda. Journal of Business Research. 122. pp.889-901.
Vial, G., 2021. Understanding digital transformation: A review and a research agenda. Managing
Digital Transformation. pp.13-66.
Ziółkowska, M. J., 2021. Digital transformation and marketing activities in small and medium-
sized enterprises. Sustainability. 13(5). p.2512.
Online
Leasun: Digital Transformation of a Traditional Canned Food Company.2022.[Online].
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