Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003 SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003
From March to May 2003, Hong Kong's tourism industry underwent a serious downturn during the outbreak of SARS in the territory, which caused 1,755 cases in Hong Kong before July. There was practically no inbound tourism between April 2 and May 23, during which the World Health Organization advised the public to consider postponing all but essential travel to Hong Kong. Then, in a dramatic twist, the industry received a significant boost in late July, when residents of four nearby mainland Chinese cities were allowed to apply to visit Hong Kong on an individual basis as part of the mainland and Hong Kong Closer Economic Partnership Arrangement. Formerly, mainland Chinese tourists could visit Hong Kong only with tour groups. By September, tourists from the major cities of Beijing, Shanghai, Guangzhou, and Shenzhen could also visit Hong Kong on an individual basis. Mainland tourists literally began to flood in as a result, bringing up total visitor arrival figures to a level that even surpassed pre-SARS statistics. Greater easing of travel restrictions was expected in the first half of 2004. How could Hong Kong's SMEs, much battered by the economic woes in recent years that were capped by the SARS attack, capitalize on the new opportunities offered by the liberalization of mainland travel?
Swot Analysis of "Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003" written by Michael J. Enright, Vincent Mak includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hong Mainland facing as an external strategic factors. Some of the topics covered in Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003 case study are - Strategic Management Strategies, Marketing and Global Business.
Some of the macro environment factors that can be used to understand the Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003 casestudy better are - – cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google,
increasing commodity prices, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003 case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hong Mainland, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hong Mainland 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 Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003 can be done for the following purposes –
1. Strategic planning using facts provided in Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003 case study
2. Improving business portfolio management of Hong Mainland
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 Hong Mainland
Strengths Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003 | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hong Mainland in Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003 Harvard Business Review case study are -
Training and development
– Hong Mainland has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003 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.
Learning organization
- Hong Mainland 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 Hong Mainland is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003 Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Hong Mainland has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hong Mainland 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 Hong Mainland in the sector have low bargaining power. Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003 has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hong Mainland to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Global Business field
– Hong Mainland 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 Hong Mainland in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy in the Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003 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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Hong Mainland digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hong Mainland 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 Hong Mainland 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.
Highly skilled collaborators
– Hong Mainland 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 Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003 HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Hong Mainland is one of the most innovative firm in sector. Manager in Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003 Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Hong Mainland has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hong Mainland to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Hong Mainland 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 Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003 | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003 are -
Interest costs
– Compare to the competition, Hong Mainland 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 Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003, in the dynamic environment Hong Mainland has struggled to respond to the nimble upstart competition. Hong Mainland has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Hong Mainland is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003 can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Michael J. Enright, Vincent Mak suggests that, Hong Mainland 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.
Skills based hiring
– The stress on hiring functional specialists at Hong Mainland 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003 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 Hong Mainland has relatively successful track record of launching new products.
High cash cycle compare to competitors
Hong Mainland has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High operating costs
– Compare to the competitors, firm in the HBR case study Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003 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 Hong Mainland 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Hong Mainland 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. Hong Mainland 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.
Products dominated business model
– Even though Hong Mainland 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 - Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003 should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Hong Mainland 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.
Opportunities Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003 | 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 Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003 are -
Learning at scale
– Online learning technologies has now opened space for Hong Mainland 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.
Developing new processes and practices
– Hong Mainland 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.
Better consumer reach
– The expansion of the 5G network will help Hong Mainland to increase its market reach. Hong Mainland 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hong Mainland 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 Hong Mainland to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Hong Mainland 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hong Mainland is facing challenges because of the dominance of functional experts in the organization. Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003 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.
Building a culture of innovation
– managers at Hong Mainland 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, Hong Mainland can use these opportunities to build new business models that can help the communities that Hong Mainland operates in. Secondly it can use opportunities from government spending in Global Business sector.
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. Hong Mainland can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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. Hong Mainland 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. Hong Mainland 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.
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 Hong Mainland 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hong Mainland 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hong Mainland 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, Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003 External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003 are -
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 Hong Mainland business can come under increasing regulations regarding data privacy, data security, 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hong Mainland 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.
Technology acceleration in Forth Industrial Revolution
– Hong Mainland has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Hong Mainland 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.
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.
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. Hong Mainland needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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 Hong Mainland.
Stagnating economy with rate increase
– Hong Mainland 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.
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 Hong Mainland 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. Hong Mainland 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 Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003, Hong Mainland 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 .
Consumer confidence and its impact on Hong Mainland 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Hong Mainland with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003 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 Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003 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 Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003 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 Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003 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 Mainland China's Travel Liberalisation and Hong Kong's SMEs in Late 2003 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 Hong Mainland needs to make to build a sustainable competitive advantage.