Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector
Ho Chi Minh Securities Corporation (HSC) was established in April of 2003. At the time, it was the 11th securities company to be founded in the Vietnam. From the outset, HSC provided a full range of securities trading and investment banking-related services. HSC was established to help restructure SOEs and to raise capital for development projects. That is, it was founded as a joint-stock company with the largest of the original investors being the Ho Chi Minh City Investment Fund for Urban Development (HIFU). In May of 2007, the Dragon Capital Group (Dragon Capital), a UK-based fund manager that had already established a foothold in Vietnam, took on just under 30% of HSC's shares. That change in ownership structure of HSC prompted a change in the composition of the board of directors and of the management team. The new team took a range of steps to strengthen the company and help distinguish it from rivals. They articulated a set of organisational values and took steps to shape an organisational culture. They shored up the financial foundation of the firm. They deepened and broadened the expertise embedded in different departments of the company. They introduced new products and services in order to penetrate new market segments. Despite a turbulent external environment, at the end of 2008, the team charted a strategy which called for HSC to increase market share.
Swot Analysis of "Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector" written by Michael J. Fratantuono, Luan Nguyen includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hsc Minh facing as an external strategic factors. Some of the topics covered in Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector case study are - Strategic Management Strategies, Emerging markets, Financial management, Financial markets, Policy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector casestudy better are - – challanges to central banks by blockchain based private currencies, increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, technology disruption, increasing commodity prices, increasing energy prices, cloud computing is disrupting traditional business models,
wage bills are increasing, geopolitical disruptions, etc
Introduction to SWOT Analysis of Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hsc Minh, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hsc Minh 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 Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector can be done for the following purposes –
1. Strategic planning using facts provided in Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector case study
2. Improving business portfolio management of Hsc Minh
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 Hsc Minh
Strengths Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hsc Minh in Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector Harvard Business Review case study are -
High switching costs
– The high switching costs that Hsc Minh 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.
Organizational Resilience of Hsc Minh
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Hsc Minh does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Hsc Minh 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 Michael J. Fratantuono, Luan Nguyen 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.
Training and development
– Hsc Minh has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector 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.
Innovation driven organization
– Hsc Minh is one of the most innovative firm in sector. Manager in Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Hsc Minh 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 Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Hsc Minh is present in almost all the verticals within the industry. This has provided firm in Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Ability to lead change in Strategy & Execution field
– Hsc Minh is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Hsc Minh in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– Hsc Minh has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hsc Minh has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Superior customer experience
– The customer experience strategy of Hsc Minh in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Hsc Minh has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector 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.
Weaknesses Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector are -
Capital Spending Reduction
– Even during the low interest decade, Hsc Minh has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Hsc Minh is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Hsc Minh products
– To increase the profitability and margins on the products, Hsc Minh needs to provide more differentiated products than what it is currently offering in the marketplace.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector, is just above the industry average. Hsc Minh 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 bargaining power of channel partners
– Because of the regulatory requirements, Michael J. Fratantuono, Luan Nguyen suggests that, Hsc Minh is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Need for greater diversity
– Hsc Minh has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Low market penetration in new markets
– Outside its home market of Hsc Minh, firm in the HBR case study Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Interest costs
– Compare to the competition, Hsc Minh 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.
No frontier risks strategy
– After analyzing the HBR case study Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High cash cycle compare to competitors
Hsc Minh 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector, in the dynamic environment Hsc Minh has struggled to respond to the nimble upstart competition. Hsc Minh has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector | 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 Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hsc Minh can use these opportunities to build new business models that can help the communities that Hsc Minh operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Leveraging digital technologies
– Hsc Minh 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.
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 Hsc Minh 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.
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 Hsc Minh in the consumer business. Now Hsc Minh can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Hsc Minh to increase its market reach. Hsc Minh 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.
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. Hsc Minh 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
– Hsc Minh 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.
Using analytics as competitive advantage
– Hsc Minh 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 Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hsc Minh to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Hsc Minh can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Hsc Minh can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hsc Minh 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, Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Buying journey improvements
– Hsc Minh can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Loyalty marketing
– Hsc Minh 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.
Learning at scale
– Online learning technologies has now opened space for Hsc Minh to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Threats Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector are -
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Increasing wage structure of Hsc Minh
– 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 Hsc Minh.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hsc Minh in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Consumer confidence and its impact on Hsc Minh 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.
Stagnating economy with rate increase
– Hsc Minh 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.
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 Hsc Minh in the Strategy & Execution sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Hsc Minh can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Hsc Minh will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Hsc Minh with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Hsc Minh business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Hsc Minh 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector, Hsc Minh 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 international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hsc Minh 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 Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector .
Weighted SWOT Analysis of Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector 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 Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector 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 Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector 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 Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector 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 Ho Chi Minh Securities Corporation: Seeking Competitive Advantage in Vietnam's Evolving Financial Sector 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 Hsc Minh needs to make to build a sustainable competitive advantage.
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