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 - – increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, there is increasing trade war between United States & China, supply chains are disrupted by pandemic ,
there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, 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 -
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 switching costs
– The high switching costs that Hkcolo Asia's 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.
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.
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.
Innovation driven organization
– Hkcolo Asia's is one of the most innovative firm in sector. Manager in HKCOLO: Expanding Connectivity in Asia's Telecom Hub Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
Cross disciplinary teams
– Horizontal connected teams at the Hkcolo Asia's 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.
Effective Research and Development (R&D)
– Hkcolo Asia's 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 HKCOLO: Expanding Connectivity in Asia's Telecom Hub - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Hkcolo Asia's 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 Hkcolo Asia's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in HKCOLO: Expanding Connectivity in Asia's Telecom Hub Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
Analytics focus
– Hkcolo Asia's 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 Kwok-chuen Kwok, Edo de Vries Robbe 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.
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.
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 -
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study HKCOLO: Expanding Connectivity in Asia's Telecom Hub, in the dynamic environment Hkcolo Asia's has struggled to respond to the nimble upstart competition. Hkcolo Asia's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study HKCOLO: Expanding Connectivity in Asia's Telecom Hub, it seems that the employees of Hkcolo Asia's 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.
Aligning sales with marketing
– It come across in the case study HKCOLO: Expanding Connectivity in Asia's Telecom Hub 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 HKCOLO: Expanding Connectivity in Asia's Telecom Hub can leverage the sales team experience to cultivate customer relationships as Hkcolo Asia's is planning to shift buying processes online.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Hkcolo Asia's 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.
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.
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.
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.
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Hkcolo Asia's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study HKCOLO: Expanding Connectivity in Asia's Telecom Hub can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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 -
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 Hkcolo Asia's 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.
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.
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.
Buying journey improvements
– Hkcolo Asia's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. HKCOLO: Expanding Connectivity in Asia's Telecom Hub 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.
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.
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. Hkcolo Asia's 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. Hkcolo Asia's 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.
Using analytics as competitive advantage
– Hkcolo Asia's 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 HKCOLO: Expanding Connectivity in Asia's Telecom Hub - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hkcolo Asia's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
Loyalty marketing
– Hkcolo Asia's 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.
Better consumer reach
– The expansion of the 5G network will help Hkcolo Asia's to increase its market reach. Hkcolo Asia's 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.
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.
Creating value in data economy
– The success of analytics program of Hkcolo Asia's has opened avenues for new revenue streams for the organization in the industry. This can help Hkcolo Asia's to build a more holistic ecosystem as suggested in the HKCOLO: Expanding Connectivity in Asia's Telecom Hub case study. Hkcolo Asia's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
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 -
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hkcolo Asia's 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
– 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.
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.
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.
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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
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.
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 Hkcolo Asia's in the Global Business sector and impact the bottomline of the organization.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Hkcolo Asia's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
High dependence on third party suppliers
– Hkcolo Asia's 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 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.