Oriental Fortune Capital: Building a Better Stock Exchange SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Oriental Fortune Capital: Building a Better Stock Exchange
When ChiNext opened in October 2009 as the second tier market of the Shenzhen Stock Exchange (SZSE), it aimed to provide Chinese entrepreneurs with equity capital and to facilitate the exits of venture capital firms and other investors which had previously relied on the New York, London, and Hong Kong markets for public offerings. A year into ChiNext's operation, Dr. Wei Chen, Chairman and founder of Oriental Fortune Capital, one of the fastest-growing venture capital firms in China, met with an SZSE research fellow to discuss how the rules governing the market might be adjusted to allow more firms to list and, more importantly, to improve efficiency and transparency in order to make ChiNext a better stock exchange.
Swot Analysis of "Oriental Fortune Capital: Building a Better Stock Exchange" written by Josh Lerner, Keith Chi-ho Wong includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Szse Chinext facing as an external strategic factors. Some of the topics covered in Oriental Fortune Capital: Building a Better Stock Exchange case study are - Strategic Management Strategies, IPO, Venture capital and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Oriental Fortune Capital: Building a Better Stock Exchange casestudy better are - – increasing transportation and logistics costs, technology disruption, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%,
increasing commodity prices, increasing energy prices, etc
Introduction to SWOT Analysis of Oriental Fortune Capital: Building a Better Stock Exchange
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Oriental Fortune Capital: Building a Better Stock Exchange case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Szse Chinext, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Szse Chinext 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 Oriental Fortune Capital: Building a Better Stock Exchange can be done for the following purposes –
1. Strategic planning using facts provided in Oriental Fortune Capital: Building a Better Stock Exchange case study
2. Improving business portfolio management of Szse Chinext
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Szse Chinext
Strengths Oriental Fortune Capital: Building a Better Stock Exchange | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Szse Chinext in Oriental Fortune Capital: Building a Better Stock Exchange Harvard Business Review case study are -
Sustainable margins compare to other players in Finance & Accounting industry
– Oriental Fortune Capital: Building a Better Stock Exchange firm has clearly differentiated products in the market place. This has enabled Szse Chinext to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Szse Chinext to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Szse Chinext 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 Oriental Fortune Capital: Building a Better Stock Exchange - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Szse Chinext digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Szse Chinext 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.
Analytics focus
– Szse Chinext 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 Josh Lerner, Keith Chi-ho Wong 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.
Highly skilled collaborators
– Szse Chinext 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 Oriental Fortune Capital: Building a Better Stock Exchange HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Szse Chinext is present in almost all the verticals within the industry. This has provided firm in Oriental Fortune Capital: Building a Better Stock Exchange 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.
Cross disciplinary teams
– Horizontal connected teams at the Szse Chinext 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.
High brand equity
– Szse Chinext has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Szse Chinext to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
High switching costs
– The high switching costs that Szse Chinext 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.
Innovation driven organization
– Szse Chinext is one of the most innovative firm in sector. Manager in Oriental Fortune Capital: Building a Better Stock Exchange Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Szse Chinext 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 Szse Chinext is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Oriental Fortune Capital: Building a Better Stock Exchange Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Operational resilience
– The operational resilience strategy in the Oriental Fortune Capital: Building a Better Stock Exchange 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.
Weaknesses Oriental Fortune Capital: Building a Better Stock Exchange | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Oriental Fortune Capital: Building a Better Stock Exchange are -
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Oriental Fortune Capital: Building a Better Stock Exchange, in the dynamic environment Szse Chinext has struggled to respond to the nimble upstart competition. Szse Chinext has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Szse Chinext, firm in the HBR case study Oriental Fortune Capital: Building a Better Stock Exchange needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Szse Chinext 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.
Products dominated business model
– Even though Szse Chinext has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Oriental Fortune Capital: Building a Better Stock Exchange should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Szse Chinext is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Szse Chinext needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Szse Chinext to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Oriental Fortune Capital: Building a Better Stock Exchange 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 Oriental Fortune Capital: Building a Better Stock Exchange can leverage the sales team experience to cultivate customer relationships as Szse Chinext is planning to shift buying processes online.
No frontier risks strategy
– After analyzing the HBR case study Oriental Fortune Capital: Building a Better Stock Exchange, it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Szse Chinext 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Oriental Fortune Capital: Building a Better Stock Exchange, is just above the industry average. Szse Chinext 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.
Slow decision making process
– As mentioned earlier in the report, Szse Chinext 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. Szse Chinext 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Oriental Fortune Capital: Building a Better Stock Exchange, it seems that the employees of Szse Chinext 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.
Opportunities Oriental Fortune Capital: Building a Better Stock Exchange | 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 Oriental Fortune Capital: Building a Better Stock Exchange are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Szse Chinext 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.
Developing new processes and practices
– Szse Chinext can develop new processes and procedures in Finance & Accounting 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.
Loyalty marketing
– Szse Chinext 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Szse Chinext 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 Szse Chinext to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Szse Chinext 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. Szse Chinext 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.
Better consumer reach
– The expansion of the 5G network will help Szse Chinext to increase its market reach. Szse Chinext 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Szse Chinext 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, Oriental Fortune Capital: Building a Better Stock Exchange, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Szse Chinext 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.
Building a culture of innovation
– managers at Szse Chinext 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 Finance & Accounting segment.
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. Szse Chinext can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Szse Chinext 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 Oriental Fortune Capital: Building a Better Stock Exchange - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Szse Chinext to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Szse Chinext has opened avenues for new revenue streams for the organization in the industry. This can help Szse Chinext to build a more holistic ecosystem as suggested in the Oriental Fortune Capital: Building a Better Stock Exchange case study. Szse Chinext can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Szse Chinext can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Oriental Fortune Capital: Building a Better Stock Exchange External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Oriental Fortune Capital: Building a Better Stock Exchange are -
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. Szse Chinext needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Szse Chinext 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 Oriental Fortune Capital: Building a Better Stock Exchange .
Stagnating economy with rate increase
– Szse Chinext 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.
Consumer confidence and its impact on Szse Chinext 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
– Szse Chinext has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Szse Chinext needs to keep up with the evolution of technology in the Finance & Accounting 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Szse Chinext with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Shortening product life cycle
– it is one of the major threat that Szse Chinext is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
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. Szse Chinext 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 Szse Chinext in the Finance & Accounting sector and impact the bottomline of the organization.
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 Szse Chinext.
Increasing wage structure of Szse Chinext
– 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 Szse Chinext.
Regulatory challenges
– Szse Chinext 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 Finance & Accounting industry regulations.
Weighted SWOT Analysis of Oriental Fortune Capital: Building a Better Stock Exchange 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 Oriental Fortune Capital: Building a Better Stock Exchange 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 Oriental Fortune Capital: Building a Better Stock Exchange 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 Oriental Fortune Capital: Building a Better Stock Exchange 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 Oriental Fortune Capital: Building a Better Stock Exchange 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 Szse Chinext needs to make to build a sustainable competitive advantage.
