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 - – technology disruption, cloud computing is disrupting traditional business models, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, increasing government debt because of Covid-19 spendings,
competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, 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 -
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.
Low bargaining power of suppliers
– Suppliers of Hkbi Lee in the sector have low bargaining power. Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hkbi Lee to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
Learning organization
- Hkbi Lee 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 Hkbi Lee is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
Diverse revenue streams
– Hkbi Lee is present in almost all the verticals within the industry. This has provided firm in Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship 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.
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.
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.
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.
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.
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 -
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.
High operating costs
– Compare to the competitors, firm in the HBR case study Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Hkbi Lee 's lucrative customers.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship, it seems that the employees of Hkbi Lee 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.
Capital Spending Reduction
– Even during the low interest decade, Hkbi Lee 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.
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.
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.
No frontier risks strategy
– After analyzing the HBR case study Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Hkbi Lee needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
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.
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 -
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.
Leveraging digital technologies
– Hkbi Lee 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.
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.
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.
Manufacturing automation
– Hkbi Lee can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship 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.
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.
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.
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.
Building a culture of innovation
– managers at Hkbi Lee 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 Innovation & Entrepreneurship segment.
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.
Buying journey improvements
– Hkbi Lee can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Hong Kong Business Intermediary: The Dynamic of Innovative Entrepreneurship 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.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hkbi Lee can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 -
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.
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.
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.
Consumer confidence and its impact on Hkbi Lee 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.
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.
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.
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 .
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.
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hkbi Lee in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship 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.
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.
Stagnating economy with rate increase
– Hkbi Lee 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.
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.
