Capitalising on a World-Class Securities Trading System: HKEx's AMS/3 SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Capitalising on a World-Class Securities Trading System: HKEx's AMS/3
It was June 2001, seven months after the launch of AMS/3 by Hong Kong Exchanges and Clearing (HKEx). The development of AMS/3, the third generation of HKEx's electronic trading system, was the biggest project undertaken by HKEx thus far. It was designed as a tool for HKEx to compete with other established and technologically advanced stock exchanges. Despite the size and complexity of the project, AMS/3 was launched on schedule. Now, HKEx's challenge is to devise a strategy to steer HKEx toward becoming a global exchange with the right products and the right strategic partners, as well as to create sustainable competitive advantages to anchor Hong Kong's position as one of the most important financial centers in the world. This case is about strategic management of stock exchanges.
Authors :: Ali F. Farhoomand, Eva Y.H. Kwan, Pauline Ng
Swot Analysis of "Capitalising on a World-Class Securities Trading System: HKEx's AMS/3" written by Ali F. Farhoomand, Eva Y.H. Kwan, Pauline Ng includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ams Hkex facing as an external strategic factors. Some of the topics covered in Capitalising on a World-Class Securities Trading System: HKEx's AMS/3 case study are - Strategic Management Strategies, Financial markets, Internet and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Capitalising on a World-Class Securities Trading System: HKEx's AMS/3 casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, technology disruption, supply chains are disrupted by pandemic , increasing household debt because of falling income levels, geopolitical disruptions, central banks are concerned over increasing inflation,
increasing transportation and logistics costs, increasing commodity prices, etc
Introduction to SWOT Analysis of Capitalising on a World-Class Securities Trading System: HKEx's AMS/3
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Capitalising on a World-Class Securities Trading System: HKEx's AMS/3 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ams Hkex, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ams Hkex 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 Capitalising on a World-Class Securities Trading System: HKEx's AMS/3 can be done for the following purposes –
1. Strategic planning using facts provided in Capitalising on a World-Class Securities Trading System: HKEx's AMS/3 case study
2. Improving business portfolio management of Ams Hkex
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 Ams Hkex
Strengths Capitalising on a World-Class Securities Trading System: HKEx's AMS/3 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ams Hkex in Capitalising on a World-Class Securities Trading System: HKEx's AMS/3 Harvard Business Review case study are -
High brand equity
– Ams Hkex has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ams Hkex to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Strategy & Execution field
– Ams Hkex 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 Ams Hkex 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
– Ams Hkex has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ams Hkex 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 Ams Hkex in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Ams Hkex is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Ams Hkex
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ams Hkex does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Ams Hkex 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 Capitalising on a World-Class Securities Trading System: HKEx's AMS/3 - 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
– Ams Hkex is present in almost all the verticals within the industry. This has provided firm in Capitalising on a World-Class Securities Trading System: HKEx's AMS/3 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.
Sustainable margins compare to other players in Strategy & Execution industry
– Capitalising on a World-Class Securities Trading System: HKEx's AMS/3 firm has clearly differentiated products in the market place. This has enabled Ams Hkex to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Ams Hkex to invest into research and development (R&D) and innovation.
Learning organization
- Ams Hkex is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Ams Hkex is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Capitalising on a World-Class Securities Trading System: HKEx's AMS/3 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the Capitalising on a World-Class Securities Trading System: HKEx's AMS/3 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.
Highly skilled collaborators
– Ams Hkex 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 Capitalising on a World-Class Securities Trading System: HKEx's AMS/3 HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Capitalising on a World-Class Securities Trading System: HKEx's AMS/3 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Capitalising on a World-Class Securities Trading System: HKEx's AMS/3 are -
Aligning sales with marketing
– It come across in the case study Capitalising on a World-Class Securities Trading System: HKEx's AMS/3 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 Capitalising on a World-Class Securities Trading System: HKEx's AMS/3 can leverage the sales team experience to cultivate customer relationships as Ams Hkex is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Ams Hkex has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High cash cycle compare to competitors
Ams Hkex 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.
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 Ams Hkex supply chain. Even after few cautionary changes mentioned in the HBR case study - Capitalising on a World-Class Securities Trading System: HKEx's AMS/3, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ams Hkex vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Capitalising on a World-Class Securities Trading System: HKEx's AMS/3 HBR case study mentions - Ams Hkex takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
No frontier risks strategy
– After analyzing the HBR case study Capitalising on a World-Class Securities Trading System: HKEx's AMS/3, 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Capitalising on a World-Class Securities Trading System: HKEx's AMS/3, in the dynamic environment Ams Hkex has struggled to respond to the nimble upstart competition. Ams Hkex has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Capitalising on a World-Class Securities Trading System: HKEx's AMS/3, it seems that the employees of Ams Hkex don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Workers concerns about automation
– As automation is fast increasing in the segment, Ams Hkex 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Capitalising on a World-Class Securities Trading System: HKEx's AMS/3 HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Ams Hkex has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ams Hkex is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Capitalising on a World-Class Securities Trading System: HKEx's AMS/3 can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Capitalising on a World-Class Securities Trading System: HKEx's AMS/3 | 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 Capitalising on a World-Class Securities Trading System: HKEx's AMS/3 are -
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. Ams Hkex can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Ams Hkex in the consumer business. Now Ams Hkex can target international markets with far fewer capital restrictions requirements than the existing system.
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 Ams Hkex 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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Ams Hkex can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Ams Hkex 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. Ams Hkex 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ams Hkex 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.
Leveraging digital technologies
– Ams Hkex 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.
Learning at scale
– Online learning technologies has now opened space for Ams Hkex 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ams Hkex can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Manufacturing automation
– Ams Hkex 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.
Better consumer reach
– The expansion of the 5G network will help Ams Hkex to increase its market reach. Ams Hkex 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ams Hkex can use these opportunities to build new business models that can help the communities that Ams Hkex operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Developing new processes and practices
– Ams Hkex 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.
Threats Capitalising on a World-Class Securities Trading System: HKEx's AMS/3 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Capitalising on a World-Class Securities Trading System: HKEx's AMS/3 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.
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 Ams Hkex in the Strategy & Execution sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Ams Hkex 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ams Hkex with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Consumer confidence and its impact on Ams Hkex 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.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Ams Hkex needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Increasing wage structure of Ams Hkex
– 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 Ams Hkex.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ams Hkex 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 Capitalising on a World-Class Securities Trading System: HKEx's AMS/3 .
Shortening product life cycle
– it is one of the major threat that Ams Hkex is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Ams Hkex has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Ams Hkex needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Capitalising on a World-Class Securities Trading System: HKEx's AMS/3, Ams Hkex 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 .
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 Ams Hkex business can come under increasing regulations regarding data privacy, data security, etc.
Weighted SWOT Analysis of Capitalising on a World-Class Securities Trading System: HKEx's AMS/3 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 Capitalising on a World-Class Securities Trading System: HKEx's AMS/3 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 Capitalising on a World-Class Securities Trading System: HKEx's AMS/3 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 Capitalising on a World-Class Securities Trading System: HKEx's AMS/3 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 Capitalising on a World-Class Securities Trading System: HKEx's AMS/3 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 Ams Hkex needs to make to build a sustainable competitive advantage.
