OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank
A Singapore-based financial services company, the second largest lender in Southeast Asia, offered to acquire a Hong Kong bank, the eighth largest lender in the country, for a premium price per share. Three months later, a multi-billion hedge fund firm based in the United States had accumulated close to 8 per cent of the Hong Kong bank's shares. According to Hong Kong's securities law, the Singapore-based financial institution would have to acquire 90 per cent of the Hong Kong bank's shares to successfully take the bank private, and there were only 25 days left for the company to meet this requirement. The hedge fund firm's unspoken message was clear: raise your bid price to buy our shares or we will keep the company public at your expense. Emir HrnjiA‡ is affiliated with National University of Singapore. Han Dong is affiliated with National University of Singapore.
Swot Analysis of "OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank" written by Emir Hrnjic, Han Dong includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Singapore Hong facing as an external strategic factors. Some of the topics covered in OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank case study are - Strategic Management Strategies, and Finance & Accounting.
Some of the macro environment factors that can be used to understand the OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank casestudy better are - – digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, competitive advantages are harder to sustain because of technology dispersion, increasing energy prices,
talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Singapore Hong, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Singapore Hong operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank can be done for the following purposes –
1. Strategic planning using facts provided in OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank case study
2. Improving business portfolio management of Singapore Hong
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Singapore Hong
Strengths OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Singapore Hong in OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Singapore Hong in the sector have low bargaining power. OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Singapore Hong to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Finance & Accounting field
– Singapore Hong 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 Singapore Hong in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Singapore Hong has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Singapore Hong to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Singapore Hong is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Emir Hrnjic, Han Dong 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.
Learning organization
- Singapore Hong 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 Singapore Hong is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Singapore Hong in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Singapore Hong 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 OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Singapore Hong has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Ability to recruit top talent
– Singapore Hong is one of the leading recruiters in the industry. Managers in the OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Finance & Accounting industry
– OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank firm has clearly differentiated products in the market place. This has enabled Singapore Hong to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Singapore Hong to invest into research and development (R&D) and innovation.
Innovation driven organization
– Singapore Hong is one of the most innovative firm in sector. Manager in OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Singapore Hong is present in almost all the verticals within the industry. This has provided firm in OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank 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.
Weaknesses OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank, in the dynamic environment Singapore Hong has struggled to respond to the nimble upstart competition. Singapore Hong has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the segment, Singapore Hong needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank, it seems that the employees of Singapore Hong 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.
Slow to strategic competitive environment developments
– As OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank HBR case study mentions - Singapore Hong 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
Singapore Hong has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank 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 Singapore Hong has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Singapore Hong has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
No frontier risks strategy
– After analyzing the HBR case study OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank, it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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 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 Singapore Hong supply chain. Even after few cautionary changes mentioned in the HBR case study - OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Singapore Hong vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Singapore Hong is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Singapore Hong, firm in the HBR case study OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank | 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 OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Singapore Hong can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Singapore Hong is facing challenges because of the dominance of functional experts in the organization. OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank 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.
Using analytics as competitive advantage
– Singapore Hong has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Singapore Hong to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Singapore Hong can use these opportunities to build new business models that can help the communities that Singapore Hong operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
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 Singapore Hong in the consumer business. Now Singapore Hong can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Singapore Hong 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 Singapore Hong to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Singapore Hong 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Singapore Hong can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Singapore Hong can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Singapore Hong in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Buying journey improvements
– Singapore Hong can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank 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.
Leveraging digital technologies
– Singapore Hong can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Better consumer reach
– The expansion of the 5G network will help Singapore Hong to increase its market reach. Singapore Hong will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Threats OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank are -
Regulatory challenges
– Singapore Hong needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Finance & Accounting industry regulations.
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. Singapore Hong needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Singapore Hong can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Singapore Hong demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank, Singapore Hong may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Stagnating economy with rate increase
– Singapore Hong can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Singapore Hong can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank .
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 Singapore Hong.
Increasing wage structure of Singapore Hong
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Singapore Hong.
Shortening product life cycle
– it is one of the major threat that Singapore Hong is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Singapore Hong with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank 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 OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank 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 OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank 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 OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank 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 OCBC Versus Hedge Fund: Acquisition of Wing Hang Bank 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 Singapore Hong needs to make to build a sustainable competitive advantage.