Hutchison Whampoa Ltd. and the Cheung Kong Center SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Hutchison Whampoa Ltd. and the Cheung Kong Center
In mid-1993, Hutchison Whampoa Ltd. (HWL), a respected company based in Hong Kong, was planning to demolish the Hilton Hotel to make way for a highly lucrative office building. The Hilton Hotel was one of the territory's oldest and best-known landmarks. It was wholly owned by HWL. To proceed with the redevelopment plan, HWL proposed to compensate the Hilton Group for an early termination of its 50-year management contract. The cost for compensation was estimated to be around U.S. $125 million. Before approaching the Hilton Group for the buy-out, the chief development executive of HWL hoped to convince himself and the directors that the deal was necessary and that the redevelopment plan would be beneficial to both the group and its shareholders. This case explains the background to the Grade A office rental market in Hong Kong and provides statistics to illustrate the major trends in the market and causal factors over 20 years.
Swot Analysis of "Hutchison Whampoa Ltd. and the Cheung Kong Center" written by Frederik Pretorius, Mary Ho includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hwl Hilton facing as an external strategic factors. Some of the topics covered in Hutchison Whampoa Ltd. and the Cheung Kong Center case study are - Strategic Management Strategies, Financial management, Financial markets, Market research and Global Business.
Some of the macro environment factors that can be used to understand the Hutchison Whampoa Ltd. and the Cheung Kong Center casestudy better are - – there is backlash against globalization, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing,
technology disruption, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Hutchison Whampoa Ltd. and the Cheung Kong Center
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hutchison Whampoa Ltd. and the Cheung Kong Center case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hwl Hilton, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hwl Hilton 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 Hutchison Whampoa Ltd. and the Cheung Kong Center can be done for the following purposes –
1. Strategic planning using facts provided in Hutchison Whampoa Ltd. and the Cheung Kong Center case study
2. Improving business portfolio management of Hwl Hilton
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 Hwl Hilton
Strengths Hutchison Whampoa Ltd. and the Cheung Kong Center | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hwl Hilton in Hutchison Whampoa Ltd. and the Cheung Kong Center Harvard Business Review case study are -
Organizational Resilience of Hwl Hilton
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Hwl Hilton 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 Hwl Hilton digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hwl Hilton 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.
Effective Research and Development (R&D)
– Hwl Hilton 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 Hutchison Whampoa Ltd. and the Cheung Kong Center - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Hwl Hilton is present in almost all the verticals within the industry. This has provided firm in Hutchison Whampoa Ltd. and the Cheung Kong Center 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.
Ability to recruit top talent
– Hwl Hilton is one of the leading recruiters in the industry. Managers in the Hutchison Whampoa Ltd. and the Cheung Kong Center are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Hwl Hilton is one of the most innovative firm in sector. Manager in Hutchison Whampoa Ltd. and the Cheung Kong Center 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
– Hwl Hilton has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Hutchison Whampoa Ltd. and the Cheung Kong Center 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.
Superior customer experience
– The customer experience strategy of Hwl Hilton in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Hwl Hilton is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Hwl Hilton in the sector have low bargaining power. Hutchison Whampoa Ltd. and the Cheung Kong Center has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hwl Hilton to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Global Business field
– Hwl Hilton 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 Hwl Hilton in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Hwl Hilton 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.
Weaknesses Hutchison Whampoa Ltd. and the Cheung Kong Center | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hutchison Whampoa Ltd. and the Cheung Kong Center are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Hutchison Whampoa Ltd. and the Cheung Kong Center, is just above the industry average. Hwl Hilton needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
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 Hwl Hilton supply chain. Even after few cautionary changes mentioned in the HBR case study - Hutchison Whampoa Ltd. and the Cheung Kong Center, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hwl Hilton vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Hwl Hilton, firm in the HBR case study Hutchison Whampoa Ltd. and the Cheung Kong Center needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow decision making process
– As mentioned earlier in the report, Hwl Hilton 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. Hwl Hilton 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.
Interest costs
– Compare to the competition, Hwl Hilton 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.
No frontier risks strategy
– After analyzing the HBR case study Hutchison Whampoa Ltd. and the Cheung Kong Center, it seems that company is thinking about the frontier risks that can impact Global Business strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Aligning sales with marketing
– It come across in the case study Hutchison Whampoa Ltd. and the Cheung Kong Center 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 Hutchison Whampoa Ltd. and the Cheung Kong Center can leverage the sales team experience to cultivate customer relationships as Hwl Hilton is planning to shift buying processes online.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Hwl Hilton is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Hutchison Whampoa Ltd. and the Cheung Kong Center can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Hwl Hilton 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Hutchison Whampoa Ltd. and the Cheung Kong Center, in the dynamic environment Hwl Hilton has struggled to respond to the nimble upstart competition. Hwl Hilton has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Hwl Hilton 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.
Opportunities Hutchison Whampoa Ltd. and the Cheung Kong Center | 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 Hutchison Whampoa Ltd. and the Cheung Kong Center are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hwl Hilton 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 Hwl Hilton to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Hwl Hilton 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.
Creating value in data economy
– The success of analytics program of Hwl Hilton has opened avenues for new revenue streams for the organization in the industry. This can help Hwl Hilton to build a more holistic ecosystem as suggested in the Hutchison Whampoa Ltd. and the Cheung Kong Center case study. Hwl Hilton can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Hwl Hilton in the consumer business. Now Hwl Hilton can target international markets with far fewer capital restrictions requirements than the existing system.
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. Hwl Hilton 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. Hwl Hilton 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.
Developing new processes and practices
– Hwl Hilton 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hwl Hilton can use these opportunities to build new business models that can help the communities that Hwl Hilton operates in. Secondly it can use opportunities from government spending in Global Business sector.
Building a culture of innovation
– managers at Hwl Hilton 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
– Hwl Hilton 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
– Hwl Hilton can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Hutchison Whampoa Ltd. and the Cheung Kong Center 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hwl Hilton 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hwl Hilton is facing challenges because of the dominance of functional experts in the organization. Hutchison Whampoa Ltd. and the Cheung Kong Center 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.
Better consumer reach
– The expansion of the 5G network will help Hwl Hilton to increase its market reach. Hwl Hilton 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.
Threats Hutchison Whampoa Ltd. and the Cheung Kong Center External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Hutchison Whampoa Ltd. and the Cheung Kong Center are -
High dependence on third party suppliers
– Hwl Hilton 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.
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.
Shortening product life cycle
– it is one of the major threat that Hwl Hilton is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Hwl Hilton has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Hwl Hilton 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.
Consumer confidence and its impact on Hwl Hilton 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.
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. Hwl Hilton needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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 Hwl Hilton business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hwl Hilton 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.
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.
Increasing wage structure of Hwl Hilton
– 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 Hwl Hilton.
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 Hwl Hilton in the Global Business sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Hutchison Whampoa Ltd. and the Cheung Kong Center, Hwl Hilton 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 .
Regulatory challenges
– Hwl Hilton 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.
Weighted SWOT Analysis of Hutchison Whampoa Ltd. and the Cheung Kong Center 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 Hutchison Whampoa Ltd. and the Cheung Kong Center 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 Hutchison Whampoa Ltd. and the Cheung Kong Center 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 Hutchison Whampoa Ltd. and the Cheung Kong Center 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 Hutchison Whampoa Ltd. and the Cheung Kong Center 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 Hwl Hilton needs to make to build a sustainable competitive advantage.