Hutchison Whampoa Ltd. and the Cheung Kong Center SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Hutchison Whampoa Ltd. and the Cheung Kong Center
In mid-1993, Hutchison Whampoa Ltd. (HWL), a respected company based in Hong Kong, was planning to demolish the Hilton Hotel to make way for a highly lucrative office building. The Hilton Hotel was one of the territory's oldest and best-known landmarks. It was wholly owned by HWL. To proceed with the redevelopment plan, HWL proposed to compensate the Hilton Group for an early termination of its 50-year management contract. The cost for compensation was estimated to be around U.S. $125 million. Before approaching the Hilton Group for the buy-out, the chief development executive of HWL hoped to convince himself and the directors that the deal was necessary and that the redevelopment plan would be beneficial to both the group and its shareholders. This case explains the background to the Grade A office rental market in Hong Kong and provides statistics to illustrate the major trends in the market and causal factors over 20 years.
Swot Analysis of "Hutchison Whampoa Ltd. and the Cheung Kong Center" written by Frederik Pretorius, Mary Ho includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hwl Hilton facing as an external strategic factors. Some of the topics covered in Hutchison Whampoa Ltd. and the Cheung Kong Center case study are - Strategic Management Strategies, Financial management, Financial markets, Market research and Global Business.
Some of the macro environment factors that can be used to understand the Hutchison Whampoa Ltd. and the Cheung Kong Center casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, geopolitical disruptions, increasing energy prices, increasing household debt because of falling income levels, technology disruption, digital marketing is dominated by two big players Facebook and Google,
increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Hutchison Whampoa Ltd. and the Cheung Kong Center
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hutchison Whampoa Ltd. and the Cheung Kong Center case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hwl Hilton, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hwl Hilton 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 Hutchison Whampoa Ltd. and the Cheung Kong Center can be done for the following purposes –
1. Strategic planning using facts provided in Hutchison Whampoa Ltd. and the Cheung Kong Center case study
2. Improving business portfolio management of Hwl Hilton
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hwl Hilton
Strengths Hutchison Whampoa Ltd. and the Cheung Kong Center | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hwl Hilton in Hutchison Whampoa Ltd. and the Cheung Kong Center Harvard Business Review case study are -
High switching costs
– The high switching costs that Hwl Hilton 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.
Successful track record of launching new products
– Hwl Hilton has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hwl Hilton 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.
Organizational Resilience of Hwl Hilton
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Hwl Hilton does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Global Business field
– Hwl Hilton 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 Hwl Hilton in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Hwl Hilton 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.
Highly skilled collaborators
– Hwl Hilton 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 Hutchison Whampoa Ltd. and the Cheung Kong Center HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Hwl Hilton 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 Frederik Pretorius, Mary Ho 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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Hwl Hilton digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hwl Hilton 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.
Low bargaining power of suppliers
– Suppliers of Hwl Hilton in the sector have low bargaining power. Hutchison Whampoa Ltd. and the Cheung Kong Center has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hwl Hilton to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Hwl Hilton has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hwl Hilton to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Hwl Hilton 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 Hutchison Whampoa Ltd. and the Cheung Kong Center - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Hwl Hilton is present in almost all the verticals within the industry. This has provided firm in Hutchison Whampoa Ltd. and the Cheung Kong Center case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Weaknesses Hutchison Whampoa Ltd. and the Cheung Kong Center | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hutchison Whampoa Ltd. and the Cheung Kong Center are -
High bargaining power of channel partners
– Because of the regulatory requirements, Frederik Pretorius, Mary Ho suggests that, Hwl Hilton 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.
No frontier risks strategy
– After analyzing the HBR case study Hutchison Whampoa Ltd. and the Cheung Kong Center, it seems that company is thinking about the frontier risks that can impact Global Business 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Hutchison Whampoa Ltd. and the Cheung Kong Center, it seems that the employees of Hwl Hilton 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.
Skills based hiring
– The stress on hiring functional specialists at Hwl Hilton 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.
Aligning sales with marketing
– It come across in the case study Hutchison Whampoa Ltd. and the Cheung Kong Center 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 Hutchison Whampoa Ltd. and the Cheung Kong Center can leverage the sales team experience to cultivate customer relationships as Hwl Hilton is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Hutchison Whampoa Ltd. and the Cheung Kong Center 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 Hwl Hilton 's lucrative customers.
Slow to strategic competitive environment developments
– As Hutchison Whampoa Ltd. and the Cheung Kong Center HBR case study mentions - Hwl Hilton takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Hutchison Whampoa Ltd. and the Cheung Kong Center 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 Hwl Hilton has relatively successful track record of launching new products.
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 Hwl Hilton supply chain. Even after few cautionary changes mentioned in the HBR case study - Hutchison Whampoa Ltd. and the Cheung Kong Center, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hwl Hilton vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, Hwl Hilton 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, Hwl Hilton 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.
Opportunities Hutchison Whampoa Ltd. and the Cheung Kong Center | 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 Hutchison Whampoa Ltd. and the Cheung Kong Center are -
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Hwl Hilton can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hwl Hilton in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hwl Hilton 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 Hwl Hilton to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Hwl Hilton can use the latest technology developments to improve its manufacturing and designing process in Global Business 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hwl Hilton can use these opportunities to build new business models that can help the communities that Hwl Hilton operates in. Secondly it can use opportunities from government spending in Global Business sector.
Loyalty marketing
– Hwl Hilton 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.
Leveraging digital technologies
– Hwl Hilton 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.
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 Hwl Hilton in the consumer business. Now Hwl Hilton can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hwl Hilton 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hwl Hilton 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, Hutchison Whampoa Ltd. and the Cheung Kong Center, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Hwl Hilton 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hwl Hilton can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Hwl Hilton 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 Global Business segment.
Threats Hutchison Whampoa Ltd. and the Cheung Kong Center External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Hutchison Whampoa Ltd. and the Cheung Kong Center are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Hutchison Whampoa Ltd. and the Cheung Kong Center, Hwl Hilton may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
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 Hwl Hilton.
High dependence on third party suppliers
– Hwl Hilton 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.
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.
Environmental challenges
– Hwl Hilton 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. Hwl Hilton can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hwl Hilton 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 Hutchison Whampoa Ltd. and the Cheung Kong Center .
Technology acceleration in Forth Industrial Revolution
– Hwl Hilton has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Hwl Hilton needs to keep up with the evolution of technology in the Global Business 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 Hwl Hilton with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Hwl Hilton needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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.
Regulatory challenges
– Hwl Hilton 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 Global Business industry regulations.
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 Hwl Hilton 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 Hwl Hilton in the Global Business industry. The Global Business 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.
Weighted SWOT Analysis of Hutchison Whampoa Ltd. and the Cheung Kong Center 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 Hutchison Whampoa Ltd. and the Cheung Kong Center 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 Hutchison Whampoa Ltd. and the Cheung Kong Center 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 Hutchison Whampoa Ltd. and the Cheung Kong Center 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 Hutchison Whampoa Ltd. and the Cheung Kong Center 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 Hwl Hilton needs to make to build a sustainable competitive advantage.