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 government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google, technology disruption, talent flight as more people leaving formal jobs, wage bills are increasing, increasing energy prices, challanges to central banks by blockchain based private currencies,
there is backlash against globalization, there is increasing trade war between United States & China, 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 -
Strong track record of project management
– Textiles Mfa is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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 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.
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.
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.
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.
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.
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.
Analytics focus
– Textiles Mfa 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 Ka-Fu Wong, Richard Wong, 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.
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.
Learning organization
- Textiles Mfa 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 Textiles Mfa is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Trade Restrictions and Hong Kong's Textiles and Clothing Industry Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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 -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Trade Restrictions and Hong Kong's Textiles and Clothing Industry, is just above the industry average. Textiles Mfa 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.
No frontier risks strategy
– After analyzing the HBR case study Trade Restrictions and Hong Kong's Textiles and Clothing Industry, 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.
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.
Capital Spending Reduction
– Even during the low interest decade, Textiles Mfa 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.
Need for greater diversity
– Textiles Mfa 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Textiles Mfa is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Trade Restrictions and Hong Kong's Textiles and Clothing Industry can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Textiles Mfa 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 - Trade Restrictions and Hong Kong's Textiles and Clothing Industry should strive to include more intangible value offerings along with its core products and services.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Trade Restrictions and Hong Kong's Textiles and Clothing Industry, in the dynamic environment Textiles Mfa has struggled to respond to the nimble upstart competition. Textiles Mfa has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
High operating costs
– Compare to the competitors, firm in the HBR case study Trade Restrictions and Hong Kong's Textiles and Clothing Industry 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 Textiles Mfa 's lucrative customers.
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 -
Building a culture of innovation
– managers at Textiles Mfa 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.
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.
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.
Better consumer reach
– The expansion of the 5G network will help Textiles Mfa to increase its market reach. Textiles Mfa 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.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Textiles Mfa 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 Textiles Mfa to hire the very best people irrespective of their geographical location.
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.
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.
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.
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. Textiles Mfa can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Textiles Mfa 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.
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.
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.
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 -
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.
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.
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.
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.
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.
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. Textiles Mfa can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Textiles Mfa 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. Textiles Mfa can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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 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 .
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 .
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.
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.
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.