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