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 - – supply chains are disrupted by pandemic , challanges to central banks by blockchain based private currencies, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models, geopolitical disruptions, increasing household debt because of falling income levels,
talent flight as more people leaving formal jobs, wage bills are increasing, 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 -
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.
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.
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.
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.
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.
High switching costs
– The high switching costs that Hwl Hilton 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.
Analytics focus
– Hwl Hilton 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 Frederik Pretorius, Mary Ho 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.
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.
Operational resilience
– The operational resilience strategy in the Hutchison Whampoa Ltd. and the Cheung Kong Center 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.
Learning organization
- Hwl Hilton 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 Hwl Hilton is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Hutchison Whampoa Ltd. and the Cheung Kong Center Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
Successful track record of launching new products
– Hwl Hilton has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hwl Hilton 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.
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 -
Products dominated business model
– Even though Hwl Hilton 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 - Hutchison Whampoa Ltd. and the Cheung Kong Center should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners
– Because of the regulatory requirements, Frederik Pretorius, Mary Ho suggests that, Hwl Hilton 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.
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.
Capital Spending Reduction
– Even during the low interest decade, Hwl Hilton 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 Hutchison Whampoa Ltd. and the Cheung Kong Center 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 Hwl Hilton has relatively successful track record of launching new products.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Hutchison Whampoa Ltd. and the Cheung Kong Center, it seems that the employees of Hwl Hilton 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.
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 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.
Lack of clear differentiation of Hwl Hilton products
– To increase the profitability and margins on the products, Hwl Hilton needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Hwl Hilton 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.
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 -
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.
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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hwl Hilton 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hwl Hilton 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, Hutchison Whampoa Ltd. and the Cheung Kong Center, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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 Hwl Hilton 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.
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.
Loyalty marketing
– Hwl Hilton 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.
Manufacturing automation
– Hwl Hilton can use the latest technology developments to improve its manufacturing and designing process in Global Business segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hwl Hilton can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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.
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 -
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 .
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.
Stagnating economy with rate increase
– Hwl Hilton 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.
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. Hwl Hilton can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Hwl Hilton 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. Hwl Hilton can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Hwl Hilton with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Hwl Hilton 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hwl Hilton 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 Hutchison Whampoa Ltd. and the Cheung Kong Center .
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.
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 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.
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.
