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 - – challanges to central banks by blockchain based private currencies, increasing energy prices, talent flight as more people leaving formal jobs, technology disruption, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, increasing household debt because of falling income levels,
there is backlash against globalization, increasing government debt because of Covid-19 spendings, 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.
Low bargaining power of suppliers
– Suppliers of Hkcolo Asia's in the sector have low bargaining power. HKCOLO: Expanding Connectivity in Asia's Telecom Hub has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hkcolo Asia's to manage not only supply disruptions but also source products at highly competitive prices.
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.
High switching costs
– The high switching costs that Hkcolo Asia's 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
– 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.
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.
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.
Learning organization
- Hkcolo Asia's 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 Hkcolo Asia's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in HKCOLO: Expanding Connectivity in Asia's Telecom Hub Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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.
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.
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 -
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.
Aligning sales with marketing
– It come across in the case study HKCOLO: Expanding Connectivity in Asia's Telecom Hub that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case HKCOLO: Expanding Connectivity in Asia's Telecom Hub can leverage the sales team experience to cultivate customer relationships as Hkcolo Asia's is planning to shift buying processes online.
Interest costs
– Compare to the competition, Hkcolo Asia's has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High bargaining power of channel partners
– Because of the regulatory requirements, Kwok-chuen Kwok, Edo de Vries Robbe suggests that, Hkcolo Asia's 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 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.
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.
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.
Increasing silos among functional specialists
– The organizational structure of Hkcolo Asia's is dominated by functional specialists. It is not different from other players in the Global Business segment. Hkcolo Asia's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hkcolo Asia's to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Hkcolo Asia's 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 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.
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.
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 -
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.
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.
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.
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.
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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Hkcolo Asia's to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Creating value in data economy
– The success of analytics program of Hkcolo Asia's has opened avenues for new revenue streams for the organization in the industry. This can help Hkcolo Asia's to build a more holistic ecosystem as suggested in the HKCOLO: Expanding Connectivity in Asia's Telecom Hub case study. Hkcolo Asia's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
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.
Using analytics as competitive advantage
– Hkcolo Asia's has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study HKCOLO: Expanding Connectivity in Asia's Telecom Hub - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hkcolo Asia's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
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.
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.
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 -
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Hkcolo Asia's business can come under increasing regulations regarding data privacy, data security, etc.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Hkcolo Asia's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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 .
Stagnating economy with rate increase
– Hkcolo Asia's can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hkcolo Asia's can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study HKCOLO: Expanding Connectivity in Asia's Telecom Hub .
Shortening product life cycle
– it is one of the major threat that Hkcolo Asia's is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
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 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.
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.
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.
