Hong Kong Dragon Airlines Limited (B): Lease vs. Buy Decision SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Hong Kong Dragon Airlines Limited (B): Lease vs. Buy Decision
In early 2006, a taskforce at the Hong Kong Dragon Airlines ("Dragonair") was formed to evaluate alternative ways to replace a spare engine. The potential options were to either purchase the engine outright or to lease the engine via a direct lease or a sale-and-leaseback arrangement. However, to assess and compare the attractiveness of each option, the taskforce must first determine an appropriate discount rate to use.
Swot Analysis of "Hong Kong Dragon Airlines Limited (B): Lease vs. Buy Decision" written by Su Han Chan, Ko Wang, Andrew Lee includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Taskforce Lease facing as an external strategic factors. Some of the topics covered in Hong Kong Dragon Airlines Limited (B): Lease vs. Buy Decision case study are - Strategic Management Strategies, Costs and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Hong Kong Dragon Airlines Limited (B): Lease vs. Buy Decision casestudy better are - – central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, increasing commodity prices, technology disruption,
increasing household debt because of falling income levels, wage bills are increasing, etc
Introduction to SWOT Analysis of Hong Kong Dragon Airlines Limited (B): Lease vs. Buy Decision
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hong Kong Dragon Airlines Limited (B): Lease vs. Buy Decision case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Taskforce Lease, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Taskforce Lease 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 Dragon Airlines Limited (B): Lease vs. Buy Decision can be done for the following purposes –
1. Strategic planning using facts provided in Hong Kong Dragon Airlines Limited (B): Lease vs. Buy Decision case study
2. Improving business portfolio management of Taskforce Lease
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 Taskforce Lease
Strengths Hong Kong Dragon Airlines Limited (B): Lease vs. Buy Decision | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Taskforce Lease in Hong Kong Dragon Airlines Limited (B): Lease vs. Buy Decision Harvard Business Review case study are -
High brand equity
– Taskforce Lease has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Taskforce Lease to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Taskforce Lease 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.
Training and development
– Taskforce Lease has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Hong Kong Dragon Airlines Limited (B): Lease vs. Buy Decision 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.
Effective Research and Development (R&D)
– Taskforce Lease 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 Dragon Airlines Limited (B): Lease vs. Buy Decision - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Analytics focus
– Taskforce Lease 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 Su Han Chan, Ko Wang, Andrew Lee 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
- Taskforce Lease 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 Taskforce Lease is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Hong Kong Dragon Airlines Limited (B): Lease vs. Buy Decision Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Taskforce Lease in the sector have low bargaining power. Hong Kong Dragon Airlines Limited (B): Lease vs. Buy Decision has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Taskforce Lease to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the Hong Kong Dragon Airlines Limited (B): Lease vs. Buy Decision 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.
Ability to lead change in Finance & Accounting field
– Taskforce Lease 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 Taskforce Lease in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Taskforce Lease is one of the leading recruiters in the industry. Managers in the Hong Kong Dragon Airlines Limited (B): Lease vs. Buy Decision 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
– Taskforce Lease has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Taskforce Lease 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Hong Kong Dragon Airlines Limited (B): Lease vs. Buy Decision firm has clearly differentiated products in the market place. This has enabled Taskforce Lease to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Taskforce Lease to invest into research and development (R&D) and innovation.
Weaknesses Hong Kong Dragon Airlines Limited (B): Lease vs. Buy Decision | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hong Kong Dragon Airlines Limited (B): Lease vs. Buy Decision are -
Workers concerns about automation
– As automation is fast increasing in the segment, Taskforce Lease 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Su Han Chan, Ko Wang, Andrew Lee suggests that, Taskforce Lease 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.
Interest costs
– Compare to the competition, Taskforce Lease 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Taskforce Lease is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Hong Kong Dragon Airlines Limited (B): Lease vs. Buy Decision can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, Taskforce Lease 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.
Products dominated business model
– Even though Taskforce Lease 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 - Hong Kong Dragon Airlines Limited (B): Lease vs. Buy Decision 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 Hong Kong Dragon Airlines Limited (B): Lease vs. Buy Decision, is just above the industry average. Taskforce Lease 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.
Low market penetration in new markets
– Outside its home market of Taskforce Lease, firm in the HBR case study Hong Kong Dragon Airlines Limited (B): Lease vs. Buy Decision needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, firm in the HBR case study Hong Kong Dragon Airlines Limited (B): Lease vs. Buy Decision 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 Taskforce Lease 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study Hong Kong Dragon Airlines Limited (B): Lease vs. Buy Decision, 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.
Need for greater diversity
– Taskforce Lease 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.
Opportunities Hong Kong Dragon Airlines Limited (B): Lease vs. Buy Decision | 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 Dragon Airlines Limited (B): Lease vs. Buy Decision are -
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. Taskforce Lease can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Taskforce Lease can use these opportunities to build new business models that can help the communities that Taskforce Lease operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Using analytics as competitive advantage
– Taskforce Lease 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 Hong Kong Dragon Airlines Limited (B): Lease vs. Buy Decision - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Taskforce Lease to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Taskforce Lease 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.
Loyalty marketing
– Taskforce Lease 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.
Building a culture of innovation
– managers at Taskforce Lease 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 Finance & Accounting segment.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Taskforce Lease 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 Dragon Airlines Limited (B): Lease vs. Buy Decision, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Taskforce Lease can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Taskforce Lease can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Taskforce Lease is facing challenges because of the dominance of functional experts in the organization. Hong Kong Dragon Airlines Limited (B): Lease vs. Buy Decision 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Taskforce Lease 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.
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 Taskforce Lease in the consumer business. Now Taskforce Lease can target international markets with far fewer capital restrictions requirements than the existing system.
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 Taskforce Lease 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.
Developing new processes and practices
– Taskforce Lease can develop new processes and procedures in Finance & Accounting 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.
Threats Hong Kong Dragon Airlines Limited (B): Lease vs. Buy Decision 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 Dragon Airlines Limited (B): Lease vs. Buy Decision are -
Technology acceleration in Forth Industrial Revolution
– Taskforce Lease has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Taskforce Lease 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Taskforce Lease with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Taskforce Lease 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 Dragon Airlines Limited (B): Lease vs. Buy Decision .
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 Taskforce Lease is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Taskforce Lease in the Finance & Accounting sector and impact the bottomline of the organization.
Increasing wage structure of Taskforce Lease
– 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 Taskforce Lease.
Consumer confidence and its impact on Taskforce Lease 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.
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 Taskforce Lease business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Taskforce Lease in the Finance & Accounting industry. The Finance & Accounting 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.
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. Taskforce Lease needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Regulatory challenges
– Taskforce Lease 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.
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.
Weighted SWOT Analysis of Hong Kong Dragon Airlines Limited (B): Lease vs. Buy Decision 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 Dragon Airlines Limited (B): Lease vs. Buy Decision 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 Dragon Airlines Limited (B): Lease vs. Buy Decision 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 Dragon Airlines Limited (B): Lease vs. Buy Decision 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 Dragon Airlines Limited (B): Lease vs. Buy Decision 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 Taskforce Lease needs to make to build a sustainable competitive advantage.