Swot Analysis of "Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B)" written by Jan Damsgaard, Ali F. Farhoomand includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Electronic Commerce facing as an external strategic factors. Some of the topics covered in Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B) case study are - Strategic Management Strategies, Joint ventures and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B) casestudy better are - – technology disruption, increasing energy prices, supply chains are disrupted by pandemic , there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google,
competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Electronic Commerce, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Electronic Commerce 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 Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B) can be done for the following purposes –
1. Strategic planning using facts provided in Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B) case study
2. Improving business portfolio management of Electronic Commerce
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 Electronic Commerce
Strengths Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Electronic Commerce in Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B) Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Electronic Commerce in the sector have low bargaining power. Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Electronic Commerce to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Strategy & Execution industry
– Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B) firm has clearly differentiated products in the market place. This has enabled Electronic Commerce to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Electronic Commerce to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Electronic Commerce 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 Electronic Commerce
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Electronic Commerce does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Electronic Commerce has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Electronic Commerce to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Learning organization
- Electronic Commerce 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 Electronic Commerce is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Electronic Commerce in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B) 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.
Innovation driven organization
– Electronic Commerce is one of the most innovative firm in sector. Manager in Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B) 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)
– Electronic Commerce 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 Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Electronic Commerce is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Electronic Commerce is one of the leading recruiters in the industry. Managers in the Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B) are -
Aligning sales with marketing
– It come across in the case study Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B) 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 Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B) can leverage the sales team experience to cultivate customer relationships as Electronic Commerce is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Electronic Commerce is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B) 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 Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B), is just above the industry average. Electronic Commerce 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.
Slow to strategic competitive environment developments
– As Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B) HBR case study mentions - Electronic Commerce 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.
High cash cycle compare to competitors
Electronic Commerce 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 star products
– The top 2 products and services of the firm as mentioned in the Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B) 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 Electronic Commerce has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Electronic Commerce is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Electronic Commerce needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Electronic Commerce to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Electronic Commerce 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.
Lack of clear differentiation of Electronic Commerce products
– To increase the profitability and margins on the products, Electronic Commerce needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Electronic Commerce 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 - Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B) should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– After analyzing the HBR case study Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B), 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.
Opportunities Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B) | 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 Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B) are -
Learning at scale
– Online learning technologies has now opened space for Electronic Commerce 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.
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. Electronic Commerce 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. Electronic Commerce 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.
Buying journey improvements
– Electronic Commerce can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B) 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Electronic Commerce 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 Electronic Commerce 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 Electronic Commerce 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.
Creating value in data economy
– The success of analytics program of Electronic Commerce has opened avenues for new revenue streams for the organization in the industry. This can help Electronic Commerce to build a more holistic ecosystem as suggested in the Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B) case study. Electronic Commerce can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Electronic Commerce 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.
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. Electronic Commerce can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Electronic Commerce 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Electronic Commerce 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, Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Electronic Commerce to increase its market reach. Electronic Commerce 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Electronic Commerce 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
– Electronic Commerce 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 Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Electronic Commerce to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B) are -
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. Electronic Commerce can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Electronic Commerce 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.
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 Electronic Commerce.
Technology acceleration in Forth Industrial Revolution
– Electronic Commerce has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Electronic Commerce 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.
Shortening product life cycle
– it is one of the major threat that Electronic Commerce is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B), Electronic Commerce 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 .
Environmental challenges
– Electronic Commerce 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. Electronic Commerce can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Electronic Commerce 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.
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.
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. Electronic Commerce needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
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 Electronic Commerce in the Strategy & Execution sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Electronic Commerce 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.
Increasing wage structure of Electronic Commerce
– 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 Electronic Commerce.
Weighted SWOT Analysis of Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B) 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 Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B) 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 Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B) 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 Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B) 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 Building Electronic Commerce Infrastructure: Hong Kong Consumer Goods Distribution (B) 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 Electronic Commerce needs to make to build a sustainable competitive advantage.
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