Case Study Description of Hong Kong's Financial Crisis--1997-98
The Asian miracle turned into a nightmare in 1997. Thailand triggered the region's free-fall when the baht was delinked from the U.S. dollar in July. This sent other Asian currencies tumbling as speculators took advantage of profit opportunities. Hong Kong was not immune to the regional woes. The first attack on the Hong Kong dollar began in earnest in October 1997. As the crisis in Asia worsened, the impact on the HKSAR deepened. Hong Kong's stock market took a pounding as speculators mounted three more attacks in 1998. Faced with this scenario and the prospect of a worsening economy, on August 14, 1998, the government changed from being a passive regulator to an active market participant by accumulating large positions in local blue-chip stocks.
Swot Analysis of "Hong Kong's Financial Crisis--1997-98" written by John Whitman, Maria J. Cascales includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Speculators Hong facing as an external strategic factors. Some of the topics covered in Hong Kong's Financial Crisis--1997-98 case study are - Strategic Management Strategies, Financial markets, Government and Global Business.
Some of the macro environment factors that can be used to understand the Hong Kong's Financial Crisis--1997-98 casestudy better are - – supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, geopolitical disruptions, cloud computing is disrupting traditional business models,
increasing inequality as vast percentage of new income is going to the top 1%, technology disruption, etc
Introduction to SWOT Analysis of Hong Kong's Financial Crisis--1997-98
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hong Kong's Financial Crisis--1997-98 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Speculators Hong, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Speculators Hong operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Hong Kong's Financial Crisis--1997-98 can be done for the following purposes –
1. Strategic planning using facts provided in Hong Kong's Financial Crisis--1997-98 case study
2. Improving business portfolio management of Speculators Hong
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 Speculators Hong
Strengths Hong Kong's Financial Crisis--1997-98 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Speculators Hong in Hong Kong's Financial Crisis--1997-98 Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Hong Kong's Financial Crisis--1997-98 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.
Strong track record of project management
– Speculators Hong is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Speculators Hong is one of the leading recruiters in the industry. Managers in the Hong Kong's Financial Crisis--1997-98 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
– Speculators Hong has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Speculators Hong 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.
Training and development
– Speculators Hong has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Hong Kong's Financial Crisis--1997-98 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.
Ability to lead change in Global Business field
– Speculators Hong 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 Speculators Hong in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Speculators Hong 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 Speculators Hong is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Hong Kong's Financial Crisis--1997-98 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Global Business industry
– Hong Kong's Financial Crisis--1997-98 firm has clearly differentiated products in the market place. This has enabled Speculators Hong to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Speculators Hong to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Speculators Hong in the sector have low bargaining power. Hong Kong's Financial Crisis--1997-98 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Speculators Hong to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Speculators Hong 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.
Effective Research and Development (R&D)
– Speculators Hong has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Hong Kong's Financial Crisis--1997-98 - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Speculators Hong 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.
Weaknesses Hong Kong's Financial Crisis--1997-98 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hong Kong's Financial Crisis--1997-98 are -
High bargaining power of channel partners
– Because of the regulatory requirements, John Whitman, Maria J. Cascales suggests that, Speculators Hong 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.
Products dominated business model
– Even though Speculators Hong 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's Financial Crisis--1997-98 should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Hong Kong's Financial Crisis--1997-98 HBR case study mentions - Speculators Hong 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.
Slow decision making process
– As mentioned earlier in the report, Speculators Hong has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Speculators Hong even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High cash cycle compare to competitors
Speculators Hong 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.
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 Speculators Hong supply chain. Even after few cautionary changes mentioned in the HBR case study - Hong Kong's Financial Crisis--1997-98, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Speculators Hong vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Speculators Hong, firm in the HBR case study Hong Kong's Financial Crisis--1997-98 needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Speculators Hong 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.
Aligning sales with marketing
– It come across in the case study Hong Kong's Financial Crisis--1997-98 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 Hong Kong's Financial Crisis--1997-98 can leverage the sales team experience to cultivate customer relationships as Speculators Hong is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study Hong Kong's Financial Crisis--1997-98, 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 Hong Kong's Financial Crisis--1997-98, it seems that the employees of Speculators Hong 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.
Opportunities Hong Kong's Financial Crisis--1997-98 | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Hong Kong's Financial Crisis--1997-98 are -
Buying journey improvements
– Speculators Hong can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Hong Kong's Financial Crisis--1997-98 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Speculators Hong can use these opportunities to build new business models that can help the communities that Speculators Hong operates in. Secondly it can use opportunities from government spending in Global Business sector.
Creating value in data economy
– The success of analytics program of Speculators Hong has opened avenues for new revenue streams for the organization in the industry. This can help Speculators Hong to build a more holistic ecosystem as suggested in the Hong Kong's Financial Crisis--1997-98 case study. Speculators Hong can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Speculators Hong 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Speculators Hong 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 Speculators Hong in the consumer business. Now Speculators Hong can target international markets with far fewer capital restrictions requirements than the existing system.
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. Speculators Hong can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Speculators Hong 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Speculators Hong is facing challenges because of the dominance of functional experts in the organization. Hong Kong's Financial Crisis--1997-98 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.
Loyalty marketing
– Speculators Hong 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.
Learning at scale
– Online learning technologies has now opened space for Speculators Hong 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.
Better consumer reach
– The expansion of the 5G network will help Speculators Hong to increase its market reach. Speculators Hong 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Speculators Hong 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.
Threats Hong Kong's Financial Crisis--1997-98 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Hong Kong's Financial Crisis--1997-98 are -
Regulatory challenges
– Speculators Hong 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.
Consumer confidence and its impact on Speculators Hong 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.
Shortening product life cycle
– it is one of the major threat that Speculators Hong is facing in Global Business 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 Speculators Hong in the Global Business sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Speculators Hong with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Speculators Hong.
Environmental challenges
– Speculators Hong 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. Speculators Hong 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, Speculators Hong can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Hong Kong's Financial Crisis--1997-98 .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Hong Kong's Financial Crisis--1997-98, Speculators Hong 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 .
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Speculators Hong can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Increasing wage structure of Speculators Hong
– 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 Speculators Hong.
High dependence on third party suppliers
– Speculators Hong 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.
Weighted SWOT Analysis of Hong Kong's Financial Crisis--1997-98 Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Hong Kong's Financial Crisis--1997-98 needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Hong Kong's Financial Crisis--1997-98 is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Hong Kong's Financial Crisis--1997-98 is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Hong Kong's Financial Crisis--1997-98 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 Speculators Hong needs to make to build a sustainable competitive advantage.