Trade Restrictions and Hong Kong's Textiles and Clothing Industry SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Trade Restrictions and Hong Kong's Textiles and Clothing Industry
Since 1974, the Multifibre Arrangement (MFA) had been the systematic means for developed countries to restrict textiles and clothing imports from developing countries, which did not conform to the GATT/WTO rules. In 1994, however, the Agreement on Textiles and Clothing was signed, prescribing a 10-year progressive phase-out of the MFA and integration of GATT 1994 rules. By late 2004, the complete phase-out of the MFA on January 1, 2005 had rekindled the debate between protectionists and free-trade advocates. Meanwhile, firms in Hong Kong, one of the world's major textiles and clothing exporting nations, were gearing up for the change.
Swot Analysis of "Trade Restrictions and Hong Kong's Textiles and Clothing Industry" written by Ka-Fu Wong, Richard Wong, Andrew Lee includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Textiles Mfa facing as an external strategic factors. Some of the topics covered in Trade Restrictions and Hong Kong's Textiles and Clothing Industry case study are - Strategic Management Strategies, Globalization and Global Business.
Some of the macro environment factors that can be used to understand the Trade Restrictions and Hong Kong's Textiles and Clothing Industry casestudy better are - – increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, increasing transportation and logistics costs,
there is backlash against globalization, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of Trade Restrictions and Hong Kong's Textiles and Clothing Industry
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Trade Restrictions and Hong Kong's Textiles and Clothing Industry case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Textiles Mfa, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Textiles Mfa 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 Trade Restrictions and Hong Kong's Textiles and Clothing Industry can be done for the following purposes –
1. Strategic planning using facts provided in Trade Restrictions and Hong Kong's Textiles and Clothing Industry case study
2. Improving business portfolio management of Textiles Mfa
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 Textiles Mfa
Strengths Trade Restrictions and Hong Kong's Textiles and Clothing Industry | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Textiles Mfa in Trade Restrictions and Hong Kong's Textiles and Clothing Industry Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Textiles Mfa 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.
Successful track record of launching new products
– Textiles Mfa has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Textiles Mfa 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.
High brand equity
– Textiles Mfa has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Textiles Mfa to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Textiles Mfa
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Textiles Mfa does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Textiles Mfa 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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Textiles Mfa digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Textiles Mfa 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 Global Business field
– Textiles Mfa 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 Textiles Mfa 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
– Textiles Mfa is one of the leading recruiters in the industry. Managers in the Trade Restrictions and Hong Kong's Textiles and Clothing Industry are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Textiles Mfa 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 Trade Restrictions and Hong Kong's Textiles and Clothing Industry HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Textiles Mfa in the sector have low bargaining power. Trade Restrictions and Hong Kong's Textiles and Clothing Industry has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Textiles Mfa to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Textiles Mfa in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the Trade Restrictions and Hong Kong's Textiles and Clothing Industry 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.
Weaknesses Trade Restrictions and Hong Kong's Textiles and Clothing Industry | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Trade Restrictions and Hong Kong's Textiles and Clothing Industry are -
Slow to strategic competitive environment developments
– As Trade Restrictions and Hong Kong's Textiles and Clothing Industry HBR case study mentions - Textiles Mfa 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.
Low market penetration in new markets
– Outside its home market of Textiles Mfa, firm in the HBR case study Trade Restrictions and Hong Kong's Textiles and Clothing Industry needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Textiles Mfa is dominated by functional specialists. It is not different from other players in the Global Business segment. Textiles Mfa needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Textiles Mfa to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Trade Restrictions and Hong Kong's Textiles and Clothing Industry 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 Trade Restrictions and Hong Kong's Textiles and Clothing Industry can leverage the sales team experience to cultivate customer relationships as Textiles Mfa is planning to shift buying processes online.
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 Textiles Mfa supply chain. Even after few cautionary changes mentioned in the HBR case study - Trade Restrictions and Hong Kong's Textiles and Clothing Industry, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Textiles Mfa vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, Textiles Mfa 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Trade Restrictions and Hong Kong's Textiles and Clothing Industry 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 Textiles Mfa has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Textiles Mfa 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. Textiles Mfa 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.
Interest costs
– Compare to the competition, Textiles Mfa 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.
Skills based hiring
– The stress on hiring functional specialists at Textiles Mfa 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.
Lack of clear differentiation of Textiles Mfa products
– To increase the profitability and margins on the products, Textiles Mfa needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Trade Restrictions and Hong Kong's Textiles and Clothing Industry | 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 Trade Restrictions and Hong Kong's Textiles and Clothing Industry are -
Using analytics as competitive advantage
– Textiles Mfa 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 Trade Restrictions and Hong Kong's Textiles and Clothing Industry - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Textiles Mfa to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Textiles Mfa can develop new processes and procedures in Global Business 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Textiles Mfa can use these opportunities to build new business models that can help the communities that Textiles Mfa operates in. Secondly it can use opportunities from government spending in Global Business sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Textiles Mfa is facing challenges because of the dominance of functional experts in the organization. Trade Restrictions and Hong Kong's Textiles and Clothing Industry 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
– Textiles Mfa 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, Textiles Mfa 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 Textiles Mfa in the consumer business. Now Textiles Mfa can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Textiles Mfa has opened avenues for new revenue streams for the organization in the industry. This can help Textiles Mfa to build a more holistic ecosystem as suggested in the Trade Restrictions and Hong Kong's Textiles and Clothing Industry case study. Textiles Mfa can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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. Textiles Mfa can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Learning at scale
– Online learning technologies has now opened space for Textiles Mfa 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Textiles Mfa 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. Textiles Mfa 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Textiles Mfa 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, Trade Restrictions and Hong Kong's Textiles and Clothing Industry, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Textiles Mfa 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 Trade Restrictions and Hong Kong's Textiles and Clothing Industry External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Trade Restrictions and Hong Kong's Textiles and Clothing Industry 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 Trade Restrictions and Hong Kong's Textiles and Clothing Industry, Textiles Mfa 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 .
Regulatory challenges
– Textiles Mfa 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.
Shortening product life cycle
– it is one of the major threat that Textiles Mfa is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Textiles Mfa needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Textiles Mfa 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.
Stagnating economy with rate increase
– Textiles Mfa can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
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 Textiles Mfa.
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 Textiles Mfa business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Textiles Mfa has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Textiles Mfa 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.
Increasing wage structure of Textiles Mfa
– 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 Textiles Mfa.
High dependence on third party suppliers
– Textiles Mfa 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Textiles Mfa 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 Trade Restrictions and Hong Kong's Textiles and Clothing Industry .
Consumer confidence and its impact on Textiles Mfa 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.
Weighted SWOT Analysis of Trade Restrictions and Hong Kong's Textiles and Clothing Industry 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 Trade Restrictions and Hong Kong's Textiles and Clothing Industry 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 Trade Restrictions and Hong Kong's Textiles and Clothing Industry 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 Trade Restrictions and Hong Kong's Textiles and Clothing Industry 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 Trade Restrictions and Hong Kong's Textiles and Clothing Industry 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 Textiles Mfa needs to make to build a sustainable competitive advantage.
