Divestment of Changi International Airport Services by Temasek Holdings SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Divestment of Changi International Airport Services by Temasek Holdings
In May 2004, Temasek Holdings (Temasek) initiates the divestment of Changi International Airport Services (CIAS), following the issuance of a third ground handling license to Swissport. Since its inception in 1977, CIAS had built a reputation of a successful and competitive operator at Changi Airport, despite having a competitive incumbent like Singapore Airport Terminal Services (SATS), which had almost 80% market share. Should Temasek sell its stake just because there is going to be a new player in the industry? The long-standing senior management team at CAIS will be key to the divestment process - Temasek would be relying on them and their team to produce financial forecasts for the potential bidders to estimate the price they would pay for this business. However, could the current management be replaced by the new owner? What motivation would be senior management team have to help sell the company and potentially end their career at CIAS? With Temasek divesting their stake, would the other shareholders - Air France, KLM, Lufthansa, China Airlines and Garuda - also follow suit? If so, how would that change the dynamics of their relationships with these airlines, and would they cease to be customers after exiting from the business?
Authors :: Terence P.C. Fan, Chang Hyun Kim, Chaik Ming Koh
Swot Analysis of "Divestment of Changi International Airport Services by Temasek Holdings" written by Terence P.C. Fan, Chang Hyun Kim, Chaik Ming Koh includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Temasek Changi facing as an external strategic factors. Some of the topics covered in Divestment of Changi International Airport Services by Temasek Holdings case study are - Strategic Management Strategies, Financial analysis, Financial management, Mergers & acquisitions and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Divestment of Changi International Airport Services by Temasek Holdings casestudy better are - – there is backlash against globalization, increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, geopolitical disruptions, increasing energy prices,
increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Divestment of Changi International Airport Services by Temasek Holdings
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Divestment of Changi International Airport Services by Temasek Holdings case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Temasek Changi, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Temasek Changi 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 Divestment of Changi International Airport Services by Temasek Holdings can be done for the following purposes –
1. Strategic planning using facts provided in Divestment of Changi International Airport Services by Temasek Holdings case study
2. Improving business portfolio management of Temasek Changi
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 Temasek Changi
Strengths Divestment of Changi International Airport Services by Temasek Holdings | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Temasek Changi in Divestment of Changi International Airport Services by Temasek Holdings Harvard Business Review case study are -
Diverse revenue streams
– Temasek Changi is present in almost all the verticals within the industry. This has provided firm in Divestment of Changi International Airport Services by Temasek Holdings 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.
Effective Research and Development (R&D)
– Temasek Changi 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 Divestment of Changi International Airport Services by Temasek Holdings - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Temasek Changi has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Divestment of Changi International Airport Services by Temasek Holdings 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.
Superior customer experience
– The customer experience strategy of Temasek Changi in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Sustainable margins compare to other players in Finance & Accounting industry
– Divestment of Changi International Airport Services by Temasek Holdings firm has clearly differentiated products in the market place. This has enabled Temasek Changi to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Temasek Changi to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Temasek Changi in the sector have low bargaining power. Divestment of Changi International Airport Services by Temasek Holdings has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Temasek Changi to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Temasek Changi is one of the most innovative firm in sector. Manager in Divestment of Changi International Airport Services by Temasek Holdings Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Temasek Changi
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Temasek Changi does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Temasek Changi has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Temasek Changi to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Temasek Changi 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 Divestment of Changi International Airport Services by Temasek Holdings HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Temasek Changi digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Temasek Changi 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.
Ability to lead change in Finance & Accounting field
– Temasek Changi 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 Temasek Changi in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Divestment of Changi International Airport Services by Temasek Holdings | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Divestment of Changi International Airport Services by Temasek Holdings are -
Aligning sales with marketing
– It come across in the case study Divestment of Changi International Airport Services by Temasek Holdings 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 Divestment of Changi International Airport Services by Temasek Holdings can leverage the sales team experience to cultivate customer relationships as Temasek Changi is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Temasek Changi, firm in the HBR case study Divestment of Changi International Airport Services by Temasek Holdings needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Lack of clear differentiation of Temasek Changi products
– To increase the profitability and margins on the products, Temasek Changi 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 Divestment of Changi International Airport Services by Temasek Holdings, it seems that the employees of Temasek Changi 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.
Capital Spending Reduction
– Even during the low interest decade, Temasek Changi 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Terence P.C. Fan, Chang Hyun Kim, Chaik Ming Koh suggests that, Temasek Changi 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.
Skills based hiring
– The stress on hiring functional specialists at Temasek Changi has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Divestment of Changi International Airport Services by Temasek Holdings, 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 Temasek Changi supply chain. Even after few cautionary changes mentioned in the HBR case study - Divestment of Changi International Airport Services by Temasek Holdings, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Temasek Changi vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Divestment of Changi International Airport Services by Temasek Holdings HBR case study mentions - Temasek Changi 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Divestment of Changi International Airport Services by Temasek Holdings, is just above the industry average. Temasek Changi 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.
Opportunities Divestment of Changi International Airport Services by Temasek Holdings | 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 Divestment of Changi International Airport Services by Temasek Holdings are -
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. Temasek Changi can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Temasek Changi 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 Divestment of Changi International Airport Services by Temasek Holdings - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Temasek Changi to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Temasek Changi 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.
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. Temasek Changi can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Temasek Changi has opened avenues for new revenue streams for the organization in the industry. This can help Temasek Changi to build a more holistic ecosystem as suggested in the Divestment of Changi International Airport Services by Temasek Holdings case study. Temasek Changi can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Temasek Changi can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Temasek Changi to increase its market reach. Temasek Changi 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
– Temasek Changi 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.
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 Temasek Changi in the consumer business. Now Temasek Changi can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Temasek Changi can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Learning at scale
– Online learning technologies has now opened space for Temasek Changi 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Temasek Changi is facing challenges because of the dominance of functional experts in the organization. Divestment of Changi International Airport Services by Temasek Holdings 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.
Leveraging digital technologies
– Temasek Changi can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Threats Divestment of Changi International Airport Services by Temasek Holdings External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Divestment of Changi International Airport Services by Temasek Holdings are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Temasek Changi 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 Divestment of Changi International Airport Services by Temasek Holdings .
Shortening product life cycle
– it is one of the major threat that Temasek Changi is facing in Finance & Accounting 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 Divestment of Changi International Airport Services by Temasek Holdings, Temasek Changi 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 .
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 Temasek Changi in the Finance & Accounting sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Temasek Changi has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Temasek Changi needs to keep up with the evolution of technology in the Finance & Accounting 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.
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. Temasek Changi needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Consumer confidence and its impact on Temasek Changi 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.
Environmental challenges
– Temasek Changi 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. Temasek Changi can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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. Temasek Changi 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.
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. Temasek Changi can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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 Temasek Changi business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Temasek Changi
– 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 Temasek Changi.
Weighted SWOT Analysis of Divestment of Changi International Airport Services by Temasek Holdings 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 Divestment of Changi International Airport Services by Temasek Holdings 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 Divestment of Changi International Airport Services by Temasek Holdings 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 Divestment of Changi International Airport Services by Temasek Holdings 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 Divestment of Changi International Airport Services by Temasek Holdings 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 Temasek Changi needs to make to build a sustainable competitive advantage.
