Tale of Two Cities: Water Supply in Hong Kong and Macau SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Tale of Two Cities: Water Supply in Hong Kong and Macau
Investigates the role of the private sector in improving the operating performance of a water utility. Compares the productivity of Water Supply Department and Macau's Water Supply Co. in supplying water to Hong Kong and Macau, respectively. Water service in Hong Kong is vertically separated into potable water supply, sewage treatment, and drainage, each carried out by different government departments. Identifies reasons for inefficiencies in Hong Kong's publicly owned water utility. Describes successful privatization experience for vertically integrated water utilities in the United Kingdom and other contractual models of water services provision in France and the United States. The findings provide a factual base for discussions on government policy and business strategy.
Authors :: Yue-Cheong Chan, Pun-Lee Lam, Alexandra Yiu, Ka-Fu Wong
Swot Analysis of "Tale of Two Cities: Water Supply in Hong Kong and Macau" written by Yue-Cheong Chan, Pun-Lee Lam, Alexandra Yiu, Ka-Fu Wong includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Water Hong facing as an external strategic factors. Some of the topics covered in Tale of Two Cities: Water Supply in Hong Kong and Macau case study are - Strategic Management Strategies, Mergers & acquisitions and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Tale of Two Cities: Water Supply in Hong Kong and Macau casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, wage bills are increasing,
there is increasing trade war between United States & China, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Tale of Two Cities: Water Supply in Hong Kong and Macau
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Tale of Two Cities: Water Supply in Hong Kong and Macau case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Water Hong, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Water Hong operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Tale of Two Cities: Water Supply in Hong Kong and Macau can be done for the following purposes –
1. Strategic planning using facts provided in Tale of Two Cities: Water Supply in Hong Kong and Macau case study
2. Improving business portfolio management of Water Hong
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Water Hong
Strengths Tale of Two Cities: Water Supply in Hong Kong and Macau | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Water Hong in Tale of Two Cities: Water Supply in Hong Kong and Macau Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Water Hong are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Training and development
– Water Hong has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Tale of Two Cities: Water Supply in Hong Kong and Macau Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
High switching costs
– The high switching costs that Water Hong has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Effective Research and Development (R&D)
– Water Hong has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Tale of Two Cities: Water Supply in Hong Kong and Macau - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Water Hong has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Water Hong to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Water Hong is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Yue-Cheong Chan, Pun-Lee Lam, Alexandra Yiu, Ka-Fu Wong can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Operational resilience
– The operational resilience strategy in the Tale of Two Cities: Water Supply in Hong Kong and Macau Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Low bargaining power of suppliers
– Suppliers of Water Hong in the sector have low bargaining power. Tale of Two Cities: Water Supply in Hong Kong and Macau has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Water Hong to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Water Hong is one of the leading recruiters in the industry. Managers in the Tale of Two Cities: Water Supply in Hong Kong and Macau are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Water Hong in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Strategy & Execution industry
– Tale of Two Cities: Water Supply in Hong Kong and Macau firm has clearly differentiated products in the market place. This has enabled Water Hong to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Water Hong to invest into research and development (R&D) and innovation.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Water Hong digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Water Hong has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Weaknesses Tale of Two Cities: Water Supply in Hong Kong and Macau | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Tale of Two Cities: Water Supply in Hong Kong and Macau are -
Workers concerns about automation
– As automation is fast increasing in the segment, Water Hong needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Water Hong is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Tale of Two Cities: Water Supply in Hong Kong and Macau can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Tale of Two Cities: Water Supply in Hong Kong and Macau, is just above the industry average. Water Hong needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High cash cycle compare to competitors
Water Hong has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Interest costs
– Compare to the competition, Water Hong has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Water Hong supply chain. Even after few cautionary changes mentioned in the HBR case study - Tale of Two Cities: Water Supply in Hong Kong and Macau, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Water Hong vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Water Hong has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Water Hong even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Products dominated business model
– Even though Water Hong has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Tale of Two Cities: Water Supply in Hong Kong and Macau should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Water Hong products
– To increase the profitability and margins on the products, Water Hong needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study Tale of Two Cities: Water Supply in Hong Kong and Macau has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Water Hong 's lucrative customers.
Aligning sales with marketing
– It come across in the case study Tale of Two Cities: Water Supply in Hong Kong and Macau that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Tale of Two Cities: Water Supply in Hong Kong and Macau can leverage the sales team experience to cultivate customer relationships as Water Hong is planning to shift buying processes online.
Opportunities Tale of Two Cities: Water Supply in Hong Kong and Macau | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Tale of Two Cities: Water Supply in Hong Kong and Macau are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Water Hong can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Tale of Two Cities: Water Supply in Hong Kong and Macau, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Water Hong has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Water Hong is facing challenges because of the dominance of functional experts in the organization. Tale of Two Cities: Water Supply in Hong Kong and Macau case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Water Hong can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Water Hong can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Water Hong in the consumer business. Now Water Hong can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Water Hong can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Water Hong in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Water Hong has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Tale of Two Cities: Water Supply in Hong Kong and Macau - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Water Hong to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Water Hong can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Water Hong to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Leveraging digital technologies
– Water Hong can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Better consumer reach
– The expansion of the 5G network will help Water Hong to increase its market reach. Water Hong will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Threats Tale of Two Cities: Water Supply in Hong Kong and Macau External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Tale of Two Cities: Water Supply in Hong Kong and Macau are -
High dependence on third party suppliers
– Water Hong high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Consumer confidence and its impact on Water Hong demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Water Hong can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Tale of Two Cities: Water Supply in Hong Kong and Macau .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Water Hong with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Tale of Two Cities: Water Supply in Hong Kong and Macau, Water Hong may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Increasing wage structure of Water Hong
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Water Hong.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Water Hong business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Water Hong can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Regulatory challenges
– Water Hong needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Shortening product life cycle
– it is one of the major threat that Water Hong is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Environmental challenges
– Water Hong needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Water Hong can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Water Hong in the Strategy & Execution sector and impact the bottomline of the organization.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Weighted SWOT Analysis of Tale of Two Cities: Water Supply in Hong Kong and Macau Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Tale of Two Cities: Water Supply in Hong Kong and Macau needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Tale of Two Cities: Water Supply in Hong Kong and Macau is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Tale of Two Cities: Water Supply in Hong Kong and Macau is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Tale of Two Cities: Water Supply in Hong Kong and Macau is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Water Hong needs to make to build a sustainable competitive advantage.
