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 - – competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, geopolitical disruptions, central banks are concerned over increasing inflation, technology disruption, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy,
talent flight as more people leaving formal jobs, increasing transportation and logistics costs, 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 -
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.
Analytics focus
– Hkcolo Asia's is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Kwok-chuen Kwok, Edo de Vries Robbe can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Ability to lead change in Global Business field
– Hkcolo Asia's 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 Hkcolo Asia's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
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.
Ability to recruit top talent
– Hkcolo Asia's is one of the leading recruiters in the industry. Managers in the HKCOLO: Expanding Connectivity in Asia's Telecom Hub are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Hkcolo Asia's is present in almost all the verticals within the industry. This has provided firm in HKCOLO: Expanding Connectivity in Asia's Telecom Hub case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
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.
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.
Superior customer experience
– The customer experience strategy of Hkcolo Asia's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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 -
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Hkcolo Asia's supply chain. Even after few cautionary changes mentioned in the HBR case study - HKCOLO: Expanding Connectivity in Asia's Telecom Hub, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hkcolo Asia's vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Hkcolo Asia's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study HKCOLO: Expanding Connectivity in Asia's Telecom Hub can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study HKCOLO: Expanding Connectivity in Asia's Telecom Hub, is just above the industry average. Hkcolo Asia's 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study HKCOLO: Expanding Connectivity in Asia's Telecom Hub, it seems that the employees of Hkcolo Asia's don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Low market penetration in new markets
– Outside its home market of Hkcolo Asia's, firm in the HBR case study HKCOLO: Expanding Connectivity in Asia's Telecom Hub needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
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.
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.
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.
Slow decision making process
– As mentioned earlier in the report, Hkcolo Asia's 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. Hkcolo Asia's 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.
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 -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hkcolo Asia's in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
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.
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.
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.
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.
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 Hkcolo Asia's in the consumer business. Now Hkcolo Asia's can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Hkcolo Asia's 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Hkcolo Asia's can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Hkcolo Asia's can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
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.
Learning at scale
– Online learning technologies has now opened space for Hkcolo Asia's 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.
Manufacturing automation
– Hkcolo Asia's 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.
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 -
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Hkcolo Asia's.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Hkcolo Asia's will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Hkcolo Asia's in the Global Business sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study HKCOLO: Expanding Connectivity in Asia's Telecom Hub, Hkcolo Asia's 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 .
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.
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.
Consumer confidence and its impact on Hkcolo Asia's 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.
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.
Environmental challenges
– Hkcolo Asia's needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Hkcolo Asia's can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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.
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. Hkcolo Asia's needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hkcolo Asia's in the Global Business industry. The Global Business industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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.
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.