Hong Kong Economic Times Group: Diversification and Differentiation SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Hong Kong Economic Times Group: Diversification and Differentiation
Founded in 1988 and chaired by Lawrence Fung, the Hong Kong Economic Times Group ("HKET Group") started off as a publisher of Hong Kong Economics Times (HKET)-the first Chinese-language financial newspaper in Hong Kong. Launched when the city's economy was booming, the newspaper set out to be the Chinese-language equivalent of the Financial Times and to become one of the pre-eminent financial and business information and service providers in Greater China. Widely recognized for its quality content and leading market status, Hong Kong Economic Times has evolved closely with the economic and business environment of the city, catering to the changing needs of the local business community, such as the addition of a property section during the rise of the property market in the early 1990s and an IT section during the dotcom bubble in the mid- to late 1990s. In the face of new challenges to traditional newspaper industry like the proliferation of the Internet, the HKET Group responds by focusing on two fundamental driving forces that have become the pillars to its success: diversification and differentiation. With a vision to becoming a diversified media group, HKET has branched out to book publishing, multimedia services, electronic information services, recruitment advertising and training. Set in 2006, this case addresses the changes faced by the print newspaper industry and HKET's market positioning amid such changes. The case explores the role of creativity, especially in the context of Blue Ocean Strategy. It can also be used to teach differentiation strategy and entrepreneurship. All of these concepts can be discussed within the context of a corporate culture that creates a healthy environment for business growth.
Authors :: Ali Farhoomand, Yuen-ming Chan, Pauline Ng
Swot Analysis of "Hong Kong Economic Times Group: Diversification and Differentiation" written by Ali Farhoomand, Yuen-ming Chan, Pauline Ng includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hket Newspaper facing as an external strategic factors. Some of the topics covered in Hong Kong Economic Times Group: Diversification and Differentiation case study are - Strategic Management Strategies, Diversity, Financial management, Growth strategy, Sales and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Hong Kong Economic Times Group: Diversification and Differentiation casestudy better are - – increasing household debt because of falling income levels, central banks are concerned over increasing inflation, supply chains are disrupted by pandemic , increasing commodity prices, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, increasing energy prices,
wage bills are increasing, there is backlash against globalization, etc
Introduction to SWOT Analysis of Hong Kong Economic Times Group: Diversification and Differentiation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hong Kong Economic Times Group: Diversification and Differentiation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hket Newspaper, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hket Newspaper 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 Hong Kong Economic Times Group: Diversification and Differentiation can be done for the following purposes –
1. Strategic planning using facts provided in Hong Kong Economic Times Group: Diversification and Differentiation case study
2. Improving business portfolio management of Hket Newspaper
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 Hket Newspaper
Strengths Hong Kong Economic Times Group: Diversification and Differentiation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hket Newspaper in Hong Kong Economic Times Group: Diversification and Differentiation Harvard Business Review case study are -
Successful track record of launching new products
– Hket Newspaper has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hket Newspaper 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.
Analytics focus
– Hket Newspaper 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 Ali Farhoomand, Yuen-ming Chan, Pauline Ng 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.
Ability to lead change in Strategy & Execution field
– Hket Newspaper 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 Hket Newspaper in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Hket Newspaper 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
– Hket Newspaper has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Hong Kong Economic Times Group: Diversification and Differentiation 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.
Effective Research and Development (R&D)
– Hket Newspaper 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 Hong Kong Economic Times Group: Diversification and Differentiation - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the Hong Kong Economic Times Group: Diversification and Differentiation 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.
Learning organization
- Hket Newspaper 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 Hket Newspaper is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Hong Kong Economic Times Group: Diversification and Differentiation Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Hket Newspaper is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Hket Newspaper 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 Hong Kong Economic Times Group: Diversification and Differentiation HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Hket Newspaper digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hket Newspaper 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.
High switching costs
– The high switching costs that Hket Newspaper 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.
Weaknesses Hong Kong Economic Times Group: Diversification and Differentiation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hong Kong Economic Times Group: Diversification and Differentiation are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Hong Kong Economic Times Group: Diversification and Differentiation, is just above the industry average. Hket Newspaper 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.
Capital Spending Reduction
– Even during the low interest decade, Hket Newspaper 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.
Aligning sales with marketing
– It come across in the case study Hong Kong Economic Times Group: Diversification and Differentiation 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 Hong Kong Economic Times Group: Diversification and Differentiation can leverage the sales team experience to cultivate customer relationships as Hket Newspaper is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Hket Newspaper 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.
No frontier risks strategy
– After analyzing the HBR case study Hong Kong Economic Times Group: Diversification and Differentiation, 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.
Interest costs
– Compare to the competition, Hket Newspaper 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Hong Kong Economic Times Group: Diversification and Differentiation, it seems that the employees of Hket Newspaper 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Ali Farhoomand, Yuen-ming Chan, Pauline Ng suggests that, Hket Newspaper 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.
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 Hket Newspaper supply chain. Even after few cautionary changes mentioned in the HBR case study - Hong Kong Economic Times Group: Diversification and Differentiation, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hket Newspaper vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Hong Kong Economic Times Group: Diversification and Differentiation HBR case study mentions - Hket Newspaper 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.
Skills based hiring
– The stress on hiring functional specialists at Hket Newspaper 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.
Opportunities Hong Kong Economic Times Group: Diversification and Differentiation | 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 Hong Kong Economic Times Group: Diversification and Differentiation are -
Loyalty marketing
– Hket Newspaper 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hket Newspaper to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Hket Newspaper to hire the very best people irrespective of their geographical location.
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 Hket Newspaper 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hket Newspaper is facing challenges because of the dominance of functional experts in the organization. Hong Kong Economic Times Group: Diversification and Differentiation 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. Hket Newspaper 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
– Hket Newspaper 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hket Newspaper 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.
Buying journey improvements
– Hket Newspaper can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Hong Kong Economic Times Group: Diversification and Differentiation 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.
Developing new processes and practices
– Hket Newspaper 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.
Learning at scale
– Online learning technologies has now opened space for Hket Newspaper 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hket Newspaper can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Hket Newspaper has opened avenues for new revenue streams for the organization in the industry. This can help Hket Newspaper to build a more holistic ecosystem as suggested in the Hong Kong Economic Times Group: Diversification and Differentiation case study. Hket Newspaper can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Hket Newspaper 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.
Threats Hong Kong Economic Times Group: Diversification and Differentiation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Hong Kong Economic Times Group: Diversification and Differentiation are -
Technology acceleration in Forth Industrial Revolution
– Hket Newspaper has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Hket Newspaper 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.
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. Hket Newspaper 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.
High dependence on third party suppliers
– Hket Newspaper 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.
Environmental challenges
– Hket Newspaper 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. Hket Newspaper can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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 Hket Newspaper in the Strategy & Execution sector and impact the bottomline of the organization.
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. Hket Newspaper needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Regulatory challenges
– Hket Newspaper 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.
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. Hket Newspaper can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Hket Newspaper with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Hket Newspaper.
Stagnating economy with rate increase
– Hket Newspaper 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hket Newspaper 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 Hong Kong Economic Times Group: Diversification and Differentiation .
Weighted SWOT Analysis of Hong Kong Economic Times Group: Diversification and Differentiation 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 Hong Kong Economic Times Group: Diversification and Differentiation 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 Hong Kong Economic Times Group: Diversification and Differentiation 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 Hong Kong Economic Times Group: Diversification and Differentiation 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 Hong Kong Economic Times Group: Diversification and Differentiation 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 Hket Newspaper needs to make to build a sustainable competitive advantage.