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 - – central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, increasing energy prices,
challanges to central banks by blockchain based private currencies, technology disruption, 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 -
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Strong track record of project management
– Hkcolo Asia's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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 -
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.
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 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.
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.
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.
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.
Skills based hiring
– The stress on hiring functional specialists at Hkcolo Asia's 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.
Capital Spending Reduction
– Even during the low interest decade, Hkcolo Asia's 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.
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 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.
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.
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 -
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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 -
Technology acceleration in Forth Industrial Revolution
– Hkcolo Asia's has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Hkcolo Asia's 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.
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.
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.
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.
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.
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.
Shortening product life cycle
– it is one of the major threat that Hkcolo Asia's is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
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.
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.
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 .
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.
