Case Study Description of HKCOLO: Expanding Connectivity in Asia's Telecom Hub
Having rapidly developed into Asia's foremost neutral co-location provider and successfully attracting a wide range of customers in the telecommunications industry, HKCOLO has played a significant part in increasing Hong Kong's importance as a telecommunications hub. By 2009, however, it was on the brink of exceeding the capacity of its premises. The arrival of VoIP had resulted in increased competition, and several companies in Hong Kong and different parts of Asia were eyeing the company's dominant position. Meanwhile, HKCOLO saw opportunities to expand and to enter new markets, and thus stood at a decisive point in its relatively short history. Its executive management had to decide which strategies to follow in taking the company forward. It needed to cope with its competitors while searching for continued future growth. Decisions had to be made on which customers to target and whether or not to expand to a new site. By assuming the role of HKCOLO's management, students will learn how to make strategic decisions in a systematic way by using several standard theoretical frameworks.
Swot Analysis of "HKCOLO: Expanding Connectivity in Asia's Telecom Hub" written by Kwok-chuen Kwok, Edo de Vries Robbe includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hkcolo Asia's facing as an external strategic factors. Some of the topics covered in HKCOLO: Expanding Connectivity in Asia's Telecom Hub case study are - Strategic Management Strategies, Competition, Growth strategy, IT and Global Business.
Some of the macro environment factors that can be used to understand the HKCOLO: Expanding Connectivity in Asia's Telecom Hub casestudy better are - – there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, increasing energy prices, wage bills are increasing,
technology disruption, increasing commodity prices, etc
Introduction to SWOT Analysis of HKCOLO: Expanding Connectivity in Asia's Telecom Hub
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in HKCOLO: Expanding Connectivity in Asia's Telecom Hub case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hkcolo Asia's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hkcolo Asia's 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 HKCOLO: Expanding Connectivity in Asia's Telecom Hub can be done for the following purposes –
1. Strategic planning using facts provided in HKCOLO: Expanding Connectivity in Asia's Telecom Hub case study
2. Improving business portfolio management of Hkcolo Asia's
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 Hkcolo Asia's
Strengths HKCOLO: Expanding Connectivity in Asia's Telecom Hub | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hkcolo Asia's in HKCOLO: Expanding Connectivity in Asia's Telecom Hub Harvard Business Review case study are -
Ability to recruit top talent
– Hkcolo Asia's is one of the leading recruiters in the industry. Managers in the HKCOLO: Expanding Connectivity in Asia's Telecom Hub are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Low bargaining power of suppliers
– Suppliers of Hkcolo Asia's in the sector have low bargaining power. HKCOLO: Expanding Connectivity in Asia's Telecom Hub has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hkcolo Asia's to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Hkcolo Asia's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Hkcolo Asia's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hkcolo Asia's 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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Hkcolo Asia's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hkcolo Asia's 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.
High brand equity
– Hkcolo Asia's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hkcolo Asia's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Hkcolo Asia's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Hkcolo Asia's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the HKCOLO: Expanding Connectivity in Asia's Telecom Hub 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.
Diverse revenue streams
– Hkcolo Asia's is present in almost all the verticals within the industry. This has provided firm in HKCOLO: Expanding Connectivity in Asia's Telecom Hub 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.
Highly skilled collaborators
– Hkcolo Asia's 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 HKCOLO: Expanding Connectivity in Asia's Telecom Hub HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Hkcolo Asia's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in HKCOLO: Expanding Connectivity in Asia's Telecom Hub 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.
Sustainable margins compare to other players in Global Business industry
– HKCOLO: Expanding Connectivity in Asia's Telecom Hub firm has clearly differentiated products in the market place. This has enabled Hkcolo Asia's to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Hkcolo Asia's to invest into research and development (R&D) and innovation.
Weaknesses HKCOLO: Expanding Connectivity in Asia's Telecom Hub | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of HKCOLO: Expanding Connectivity in Asia's Telecom Hub are -
Slow to strategic competitive environment developments
– As HKCOLO: Expanding Connectivity in Asia's Telecom Hub HBR case study mentions - Hkcolo Asia's 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.
Need for greater diversity
– Hkcolo Asia's 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 decision making process
– As mentioned earlier in the report, Hkcolo Asia's 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. Hkcolo Asia's 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.
Lack of clear differentiation of Hkcolo Asia's products
– To increase the profitability and margins on the products, Hkcolo Asia's needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Hkcolo Asia's 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 - HKCOLO: Expanding Connectivity in Asia's Telecom Hub should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, firm in the HBR case study HKCOLO: Expanding Connectivity in Asia's Telecom Hub 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 Hkcolo Asia's 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the HKCOLO: Expanding Connectivity in Asia's Telecom Hub 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 Hkcolo Asia's has relatively successful track record of launching new products.
High bargaining power of channel partners
– Because of the regulatory requirements, Kwok-chuen Kwok, Edo de Vries Robbe suggests that, Hkcolo Asia's is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Interest costs
– Compare to the competition, Hkcolo Asia's 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.
Low market penetration in new markets
– Outside its home market of Hkcolo Asia's, firm in the HBR case study HKCOLO: Expanding Connectivity in Asia's Telecom Hub needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Hkcolo Asia's supply chain. Even after few cautionary changes mentioned in the HBR case study - HKCOLO: Expanding Connectivity in Asia's Telecom Hub, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hkcolo Asia's vulnerable to further global disruptions in South East Asia.
Opportunities HKCOLO: Expanding Connectivity in Asia's Telecom Hub | 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 HKCOLO: Expanding Connectivity in Asia's Telecom Hub are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hkcolo Asia's 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, HKCOLO: Expanding Connectivity in Asia's Telecom Hub, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Building a culture of innovation
– managers at Hkcolo Asia's 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.
Leveraging digital technologies
– Hkcolo Asia's 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, Hkcolo Asia's 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.
Manufacturing automation
– Hkcolo Asia's 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hkcolo Asia's 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 Hkcolo Asia's to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hkcolo Asia's is facing challenges because of the dominance of functional experts in the organization. HKCOLO: Expanding Connectivity in Asia's Telecom Hub 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. Hkcolo Asia's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hkcolo Asia's 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hkcolo Asia's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Hkcolo Asia's in the consumer business. Now Hkcolo Asia's can target international markets with far fewer capital restrictions requirements than the existing system.
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. Hkcolo Asia's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hkcolo Asia's can use these opportunities to build new business models that can help the communities that Hkcolo Asia's operates in. Secondly it can use opportunities from government spending in Global Business sector.
Threats HKCOLO: Expanding Connectivity in Asia's Telecom Hub External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study HKCOLO: Expanding Connectivity in Asia's Telecom Hub are -
Increasing wage structure of Hkcolo Asia's
– 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 Hkcolo Asia's.
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 Hkcolo Asia's.
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. Hkcolo Asia's 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.
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. Hkcolo Asia's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Hkcolo Asia's 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 Hkcolo Asia's business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– Hkcolo Asia's 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. Hkcolo Asia's can take advantage of this fund but it will also bring new competitors in the Global Business industry.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Hkcolo Asia's will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study HKCOLO: Expanding Connectivity in Asia's Telecom Hub, Hkcolo Asia's 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 .
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hkcolo Asia's 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 HKCOLO: Expanding Connectivity in Asia's Telecom Hub .
Stagnating economy with rate increase
– Hkcolo Asia's 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.
Consumer confidence and its impact on Hkcolo Asia's 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 HKCOLO: Expanding Connectivity in Asia's Telecom Hub 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 HKCOLO: Expanding Connectivity in Asia's Telecom Hub 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 HKCOLO: Expanding Connectivity in Asia's Telecom Hub 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 HKCOLO: Expanding Connectivity in Asia's Telecom Hub 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 HKCOLO: Expanding Connectivity in Asia's Telecom Hub 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 Hkcolo Asia's needs to make to build a sustainable competitive advantage.