Hong Kong's Container Truckers: The Mid-Stream Fee Dispute SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Hong Kong's Container Truckers: The Mid-Stream Fee Dispute
In November 2000, the eight-member Hong Kong Mid-Stream Operators Association (HKMOA), which controlled 90% of the mid-stream container handling business in Hong Kong, announced that it would charge shippers an extra fee. When the shippers refused to pay that fee, the HKMOA asked the container truck drivers, who delivered the containers to the mid-stream depots, to pay it and then claim it back from the shippers. The truckers refused. A series of industrial actions ensued, and the government, shippers, and liners were involved in subsequent negotiations. The rounds of tussles between the HKMOA and the truckers lasted into 2001. Eventually, the HKMOA won: The truckers had to pay the mid-stream fee, although in many cases, could not recoup it from the shippers. Why did the truckers become the victims of the HKMOA? How could the mid-stream operators win? What could public policy makers do to prevent similar disputes from happening again? What could the truck drivers, who in many cases were self-employed, do to protect themselves from more new charges in the future?
Swot Analysis of "Hong Kong's Container Truckers: The Mid-Stream Fee Dispute" written by Michael J. Enright, Vincent Mak includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hkmoa Truckers facing as an external strategic factors. Some of the topics covered in Hong Kong's Container Truckers: The Mid-Stream Fee Dispute case study are - Strategic Management Strategies, Customers, Government, Negotiations and Technology & Operations.
Some of the macro environment factors that can be used to understand the Hong Kong's Container Truckers: The Mid-Stream Fee Dispute casestudy better are - – increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , geopolitical disruptions, increasing government debt because of Covid-19 spendings, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%,
digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Hong Kong's Container Truckers: The Mid-Stream Fee Dispute
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hong Kong's Container Truckers: The Mid-Stream Fee Dispute case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hkmoa Truckers, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hkmoa Truckers 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's Container Truckers: The Mid-Stream Fee Dispute can be done for the following purposes –
1. Strategic planning using facts provided in Hong Kong's Container Truckers: The Mid-Stream Fee Dispute case study
2. Improving business portfolio management of Hkmoa Truckers
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hkmoa Truckers
Strengths Hong Kong's Container Truckers: The Mid-Stream Fee Dispute | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hkmoa Truckers in Hong Kong's Container Truckers: The Mid-Stream Fee Dispute Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Hong Kong's Container Truckers: The Mid-Stream Fee Dispute 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.
Organizational Resilience of Hkmoa Truckers
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Hkmoa Truckers does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Hkmoa Truckers in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Hkmoa Truckers has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Hong Kong's Container Truckers: The Mid-Stream Fee Dispute 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.
Highly skilled collaborators
– Hkmoa Truckers 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's Container Truckers: The Mid-Stream Fee Dispute HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– Hkmoa Truckers 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's Container Truckers: The Mid-Stream Fee Dispute - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Hkmoa Truckers is one of the leading recruiters in the industry. Managers in the Hong Kong's Container Truckers: The Mid-Stream Fee Dispute are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Successful track record of launching new products
– Hkmoa Truckers has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hkmoa Truckers 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.
Cross disciplinary teams
– Horizontal connected teams at the Hkmoa Truckers 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.
High brand equity
– Hkmoa Truckers has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hkmoa Truckers to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Hkmoa Truckers 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.
Analytics focus
– Hkmoa Truckers is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Michael J. Enright, Vincent Mak 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.
Weaknesses Hong Kong's Container Truckers: The Mid-Stream Fee Dispute | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hong Kong's Container Truckers: The Mid-Stream Fee Dispute are -
Interest costs
– Compare to the competition, Hkmoa Truckers 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Hong Kong's Container Truckers: The Mid-Stream Fee Dispute has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Hkmoa Truckers 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Hong Kong's Container Truckers: The Mid-Stream Fee Dispute, in the dynamic environment Hkmoa Truckers has struggled to respond to the nimble upstart competition. Hkmoa Truckers has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Hong Kong's Container Truckers: The Mid-Stream Fee Dispute 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 Hkmoa Truckers has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the segment, Hkmoa Truckers 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's Container Truckers: The Mid-Stream Fee Dispute, it seems that company is thinking about the frontier risks that can impact Technology & Operations 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.
Increasing silos among functional specialists
– The organizational structure of Hkmoa Truckers is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Hkmoa Truckers needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hkmoa Truckers to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Hkmoa Truckers products
– To increase the profitability and margins on the products, Hkmoa Truckers needs to provide more differentiated products than what it is currently offering in the marketplace.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Hong Kong's Container Truckers: The Mid-Stream Fee Dispute, it seems that the employees of Hkmoa Truckers 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.
Need for greater diversity
– Hkmoa Truckers has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High bargaining power of channel partners
– Because of the regulatory requirements, Michael J. Enright, Vincent Mak suggests that, Hkmoa Truckers 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.
Opportunities Hong Kong's Container Truckers: The Mid-Stream Fee Dispute | 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's Container Truckers: The Mid-Stream Fee Dispute are -
Developing new processes and practices
– Hkmoa Truckers can develop new processes and procedures in Technology & Operations 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hkmoa Truckers 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.
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. Hkmoa Truckers can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Hkmoa Truckers can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Technology & Operations segment.
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 Hkmoa Truckers to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Hkmoa Truckers in the consumer business. Now Hkmoa Truckers can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Hkmoa Truckers to increase its market reach. Hkmoa Truckers 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.
Loyalty marketing
– Hkmoa Truckers 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.
Manufacturing automation
– Hkmoa Truckers can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hkmoa Truckers can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Hkmoa Truckers 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 Hkmoa Truckers 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hkmoa Truckers 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, Hong Kong's Container Truckers: The Mid-Stream Fee Dispute, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Hong Kong's Container Truckers: The Mid-Stream Fee Dispute 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's Container Truckers: The Mid-Stream Fee Dispute are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hkmoa Truckers 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's Container Truckers: The Mid-Stream Fee Dispute .
Environmental challenges
– Hkmoa Truckers 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. Hkmoa Truckers can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
Regulatory challenges
– Hkmoa Truckers 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 Technology & Operations industry regulations.
Increasing wage structure of Hkmoa Truckers
– 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 Hkmoa Truckers.
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 Hkmoa Truckers in the Technology & Operations sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Hkmoa Truckers 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.
Consumer confidence and its impact on Hkmoa Truckers 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 Hong Kong's Container Truckers: The Mid-Stream Fee Dispute, Hkmoa Truckers may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
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.
Shortening product life cycle
– it is one of the major threat that Hkmoa Truckers is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hkmoa Truckers in the Technology & Operations industry. The Technology & Operations 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 acceleration in Forth Industrial Revolution
– Hkmoa Truckers has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Hkmoa Truckers needs to keep up with the evolution of technology in the Technology & Operations 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.
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 Hkmoa Truckers.
Weighted SWOT Analysis of Hong Kong's Container Truckers: The Mid-Stream Fee Dispute 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's Container Truckers: The Mid-Stream Fee Dispute 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's Container Truckers: The Mid-Stream Fee Dispute 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's Container Truckers: The Mid-Stream Fee Dispute 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's Container Truckers: The Mid-Stream Fee Dispute 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 Hkmoa Truckers needs to make to build a sustainable competitive advantage.