Sun Hung Kai: A Governance Crisis in a Family Firm SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Sun Hung Kai: A Governance Crisis in a Family Firm
The case study documents an incident involving one of the world's largest family-owned, publicly traded firms. The case is set in Hong Kong, where Chinese, Western, and local cultures intermingle, affecting the way corruption is viewed and dealt with. It involves issues related to conflicts within a prominent family leading to a high-profile scandal, describing tensions between the desire to maintain family control over the firm and the need to maintain proper governance and transparency for financial markets, respond to social pressure from a society that deals aggressively with corruption, and deal with a criminal inquiry that could lead to years in prison. This was all happening while complex political issues simmered in the background.
Swot Analysis of "Sun Hung Kai: A Governance Crisis in a Family Firm" written by Gilles Hilary includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Family Corruption facing as an external strategic factors. Some of the topics covered in Sun Hung Kai: A Governance Crisis in a Family Firm case study are - Strategic Management Strategies, Crisis management, Ethics, Risk management and Communication.
Some of the macro environment factors that can be used to understand the Sun Hung Kai: A Governance Crisis in a Family Firm casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, technology disruption, there is increasing trade war between United States & China, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, etc
Introduction to SWOT Analysis of Sun Hung Kai: A Governance Crisis in a Family Firm
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Sun Hung Kai: A Governance Crisis in a Family Firm case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Family Corruption, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Family Corruption 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 Sun Hung Kai: A Governance Crisis in a Family Firm can be done for the following purposes –
1. Strategic planning using facts provided in Sun Hung Kai: A Governance Crisis in a Family Firm case study
2. Improving business portfolio management of Family Corruption
3. Assessing feasibility of the new initiative in Communication field.
4. Making a Communication topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Family Corruption
Strengths Sun Hung Kai: A Governance Crisis in a Family Firm | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Family Corruption in Sun Hung Kai: A Governance Crisis in a Family Firm Harvard Business Review case study are -
Innovation driven organization
– Family Corruption is one of the most innovative firm in sector. Manager in Sun Hung Kai: A Governance Crisis in a Family Firm Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Communication segment
- digital transformation varies from industry to industry. For Family Corruption digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Family Corruption 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.
Diverse revenue streams
– Family Corruption is present in almost all the verticals within the industry. This has provided firm in Sun Hung Kai: A Governance Crisis in a Family Firm 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.
Organizational Resilience of Family Corruption
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Family Corruption does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Low bargaining power of suppliers
– Suppliers of Family Corruption in the sector have low bargaining power. Sun Hung Kai: A Governance Crisis in a Family Firm has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Family Corruption to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Family Corruption is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Family Corruption has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Sun Hung Kai: A Governance Crisis in a Family Firm 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.
High switching costs
– The high switching costs that Family Corruption 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.
Learning organization
- Family Corruption 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 Family Corruption is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Sun Hung Kai: A Governance Crisis in a Family Firm Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Family Corruption has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Family Corruption 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.
Ability to lead change in Communication field
– Family Corruption 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 Family Corruption in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Family Corruption 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 Sun Hung Kai: A Governance Crisis in a Family Firm HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Sun Hung Kai: A Governance Crisis in a Family Firm | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sun Hung Kai: A Governance Crisis in a Family Firm are -
Slow to strategic competitive environment developments
– As Sun Hung Kai: A Governance Crisis in a Family Firm HBR case study mentions - Family Corruption 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.
Interest costs
– Compare to the competition, Family Corruption 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.
Increasing silos among functional specialists
– The organizational structure of Family Corruption is dominated by functional specialists. It is not different from other players in the Communication segment. Family Corruption needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Family Corruption to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Family Corruption 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 - Sun Hung Kai: A Governance Crisis in a Family Firm should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Sun Hung Kai: A Governance Crisis in a Family Firm, is just above the industry average. Family Corruption 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.
High cash cycle compare to competitors
Family Corruption 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Family Corruption is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Sun Hung Kai: A Governance Crisis in a Family Firm can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Family Corruption 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.
Capital Spending Reduction
– Even during the low interest decade, Family Corruption 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.
Low market penetration in new markets
– Outside its home market of Family Corruption, firm in the HBR case study Sun Hung Kai: A Governance Crisis in a Family Firm needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Sun Hung Kai: A Governance Crisis in a Family Firm, in the dynamic environment Family Corruption has struggled to respond to the nimble upstart competition. Family Corruption has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Sun Hung Kai: A Governance Crisis in a Family Firm | 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 Sun Hung Kai: A Governance Crisis in a Family Firm are -
Buying journey improvements
– Family Corruption can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Sun Hung Kai: A Governance Crisis in a Family Firm 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.
Learning at scale
– Online learning technologies has now opened space for Family Corruption 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.
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. Family Corruption can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Family Corruption 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, Sun Hung Kai: A Governance Crisis in a Family Firm, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Family Corruption 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 Family Corruption to hire the very best people irrespective of their geographical location.
Creating value in data economy
– The success of analytics program of Family Corruption has opened avenues for new revenue streams for the organization in the industry. This can help Family Corruption to build a more holistic ecosystem as suggested in the Sun Hung Kai: A Governance Crisis in a Family Firm case study. Family Corruption can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Family Corruption can use these opportunities to build new business models that can help the communities that Family Corruption operates in. Secondly it can use opportunities from government spending in Communication sector.
Loyalty marketing
– Family Corruption 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.
Using analytics as competitive advantage
– Family Corruption 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 Sun Hung Kai: A Governance Crisis in a Family Firm - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Family Corruption to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Family Corruption to increase its market reach. Family Corruption 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Family Corruption 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
– Family Corruption 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.
Building a culture of innovation
– managers at Family Corruption 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 Communication segment.
Threats Sun Hung Kai: A Governance Crisis in a Family Firm External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Sun Hung Kai: A Governance Crisis in a Family Firm are -
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.
High dependence on third party suppliers
– Family Corruption 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.
Regulatory challenges
– Family Corruption 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 Communication industry regulations.
Stagnating economy with rate increase
– Family Corruption 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.
Environmental challenges
– Family Corruption 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. Family Corruption can take advantage of this fund but it will also bring new competitors in the Communication 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.
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. Family Corruption needs to understand the core reasons impacting the Communication industry. This will help it in building a better workplace.
Increasing wage structure of Family Corruption
– 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 Family Corruption.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Sun Hung Kai: A Governance Crisis in a Family Firm, Family Corruption may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Communication .
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Family Corruption business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Family Corruption has witnessed rapid integration of technology during Covid-19 in the Communication industry. As one of the leading players in the industry, Family Corruption needs to keep up with the evolution of technology in the Communication 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.
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 Family Corruption in the Communication sector and impact the bottomline of the organization.
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. Family Corruption 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.
Weighted SWOT Analysis of Sun Hung Kai: A Governance Crisis in a Family Firm 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 Sun Hung Kai: A Governance Crisis in a Family Firm 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 Sun Hung Kai: A Governance Crisis in a Family Firm 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 Sun Hung Kai: A Governance Crisis in a Family Firm 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 Sun Hung Kai: A Governance Crisis in a Family Firm 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 Family Corruption needs to make to build a sustainable competitive advantage.