Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship
Hong Kong Business Intermediary ("HKBI") was Hong Kong's first business brokerage company that specialised in small business sales. Leading the company was Edwin Lee, a young entrepreneur who took his every chance to drive the company to new levels of success. In November 2001, after realising that there were no business brokerage firms in Hong Kong, Lee set up HKBI and started to offer "matchmaking" services for prospective business sellers and buyers. As the company diversified into too many additional services without proper planning, the rising operation cost turned into a cash flow disaster for HKBI in 2005. Lee then restructured his business model into a more systematic and integrated way and successfully turned his company around, earning himself the award of Hong Kong's Innovative Entrepreneur of the Year 2007. HKBI's business model and efforts in promoting entrepreneurship had also received recognition worldwide. Meanwhile, local rivals began to tap into the under-developed sector in Hong Kong, and many of them were former HKBI employees. Lee knew when a blue ocean began to turn red, he needed to continue to reinvent his business to safeguard HKBI's market leader position. He envisioned HKBI to become a small business property developer in the future. How did Lee distinguish HKBI from others by associating the business brokerage operation with the finance, private equity and property markets in an innovative way? How did take it as his employees striking out on their own and becoming his competitors while one the objectives of HKBI was to promote entrepreneurship?
Swot Analysis of "Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship" written by Ali Farhoomand, Claudia H. L. Woo includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hkbi Lee facing as an external strategic factors. Some of the topics covered in Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship case study are - Strategic Management Strategies, Entrepreneurship, Innovation, Leadership, Supply chain and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship casestudy better are - – there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation,
digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hkbi Lee, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hkbi Lee 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 Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship can be done for the following purposes –
1. Strategic planning using facts provided in Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship case study
2. Improving business portfolio management of Hkbi Lee
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hkbi Lee
Strengths Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hkbi Lee in Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship Harvard Business Review case study are -
Analytics focus
– Hkbi Lee 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 Ali Farhoomand, Claudia H. L. Woo 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
– Hkbi Lee has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship 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 Hkbi Lee in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Effective Research and Development (R&D)
– Hkbi Lee 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 Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Hkbi Lee 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 Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Hkbi Lee has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hkbi Lee 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.
High brand equity
– Hkbi Lee has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hkbi Lee to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Hkbi Lee
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Hkbi Lee does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Hkbi Lee 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.
Operational resilience
– The operational resilience strategy in the Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship 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.
Cross disciplinary teams
– Horizontal connected teams at the Hkbi Lee 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.
Strong track record of project management
– Hkbi Lee is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship are -
Low market penetration in new markets
– Outside its home market of Hkbi Lee, firm in the HBR case study Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship 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 Hkbi Lee has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Hkbi Lee is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship 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 Hkbi Lee products
– To increase the profitability and margins on the products, Hkbi Lee needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Hkbi Lee 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship, is just above the industry average. Hkbi Lee 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.
Interest costs
– Compare to the competition, Hkbi Lee 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.
Aligning sales with marketing
– It come across in the case study Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship 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 Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship can leverage the sales team experience to cultivate customer relationships as Hkbi Lee is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, Ali Farhoomand, Claudia H. L. Woo suggests that, Hkbi Lee 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.
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 Hkbi Lee supply chain. Even after few cautionary changes mentioned in the HBR case study - Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hkbi Lee vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Hkbi Lee 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 Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship | 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 Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hkbi Lee 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 Hkbi Lee to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Hkbi Lee 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. Hkbi Lee 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.
Loyalty marketing
– Hkbi Lee 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.
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 Hkbi Lee 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.
Developing new processes and practices
– Hkbi Lee can develop new processes and procedures in Innovation & Entrepreneurship 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.
Using analytics as competitive advantage
– Hkbi Lee 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 Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hkbi Lee to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Hkbi Lee can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hkbi Lee is facing challenges because of the dominance of functional experts in the organization. Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship 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 Hkbi Lee to increase its market reach. Hkbi Lee 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hkbi Lee in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Hkbi Lee can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hkbi Lee can use these opportunities to build new business models that can help the communities that Hkbi Lee operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
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 Hkbi Lee in the consumer business. Now Hkbi Lee can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship are -
High dependence on third party suppliers
– Hkbi Lee 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hkbi Lee 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 Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship .
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 Hkbi Lee.
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.
Environmental challenges
– Hkbi Lee 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. Hkbi Lee can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Technology acceleration in Forth Industrial Revolution
– Hkbi Lee has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Hkbi Lee needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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.
Shortening product life cycle
– it is one of the major threat that Hkbi Lee is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Hkbi Lee needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
Regulatory challenges
– Hkbi Lee 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 Innovation & Entrepreneurship industry regulations.
Increasing wage structure of Hkbi Lee
– 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 Hkbi Lee.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Hkbi Lee can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Hkbi Lee 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. Hkbi Lee 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.
Weighted SWOT Analysis of Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship 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 Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship 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 Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship 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 Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship 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 Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship 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 Hkbi Lee needs to make to build a sustainable competitive advantage.