Li Ka-Shing and the Growth of Cheung Kong SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Li Ka-Shing and the Growth of Cheung Kong
Events in the history of Cheung Kong's growth reveal how Li Ka-Shing applied his skills as a "first-class noticer" to complex political and socioeconomic environments. While Li's determination to succeed is legendary, so are his skills in reading and responding to the policies and norms of the People's Republic of China, British colonial Hong Kong, and the post-World War II international system. Since Li became the taipan of Hutchison Whampoa in the late 1970s, he has adjusted his ownership shares in a vast portfolio of businesses-including ports, energy, real estate, retail, telecommunications, and new media. Illustrates how Li applied his business acumen and his ability as a first-class noticer to decisions about raising or lowering his stake in these businesses, and whether to acquire new ones. After starting Cheung Kong Inc. in 1950, at age 21, Li built upon his knowledge and contacts in the plastics industry to become Hong Kong's King of Plastic Flowers. In the 1960s, amid political turmoil and labor unrest on both the mainland and in colonial Hong Kong, Li purchased rights to properties on Hong Kong island that were selling at distressed rates. Li's successes in industry and real estate continued, and he cultivated contacts and built a strong reputation that set the stage for his purchase of the hong Hutchinson Whampoa, thereby becoming the first Chinese taipan. As taipan, Li reorganized and reallocated his various financial holdings in the 1980s and 1990s as conditions were in flux due to the Westernization of China after Deng Xiaoping succeeded Mao Zedong, and amid concerns about the transfer of Hong Kong from Britain back to China in 1997.
Authors :: Nitin Nohria, Anthony J. Mayo, Mark Benson
Swot Analysis of "Li Ka-Shing and the Growth of Cheung Kong" written by Nitin Nohria, Anthony J. Mayo, Mark Benson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Li Taipan facing as an external strategic factors. Some of the topics covered in Li Ka-Shing and the Growth of Cheung Kong case study are - Strategic Management Strategies, Decision making, Financial management, Government, International business, Leadership, Market research, Mergers & acquisitions and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Li Ka-Shing and the Growth of Cheung Kong casestudy better are - – central banks are concerned over increasing inflation, there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, technology disruption, digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , increasing transportation and logistics costs,
cloud computing is disrupting traditional business models, wage bills are increasing, etc
Introduction to SWOT Analysis of Li Ka-Shing and the Growth of Cheung Kong
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Li Ka-Shing and the Growth of Cheung Kong case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Li Taipan, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Li Taipan 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 Li Ka-Shing and the Growth of Cheung Kong can be done for the following purposes –
1. Strategic planning using facts provided in Li Ka-Shing and the Growth of Cheung Kong case study
2. Improving business portfolio management of Li Taipan
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Li Taipan
Strengths Li Ka-Shing and the Growth of Cheung Kong | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Li Taipan in Li Ka-Shing and the Growth of Cheung Kong Harvard Business Review case study are -
Cross disciplinary teams
– Horizontal connected teams at the Li Taipan 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.
Training and development
– Li Taipan has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Li Ka-Shing and the Growth of Cheung Kong 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.
Learning organization
- Li Taipan 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 Li Taipan is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Li Ka-Shing and the Growth of Cheung Kong Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Li Taipan digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Li Taipan 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.
Diverse revenue streams
– Li Taipan is present in almost all the verticals within the industry. This has provided firm in Li Ka-Shing and the Growth of Cheung Kong 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.
Highly skilled collaborators
– Li Taipan 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 Li Ka-Shing and the Growth of Cheung Kong HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Leadership & Managing People field
– Li Taipan 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 Li Taipan in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Li Taipan 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.
Low bargaining power of suppliers
– Suppliers of Li Taipan in the sector have low bargaining power. Li Ka-Shing and the Growth of Cheung Kong has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Li Taipan to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy in the Li Ka-Shing and the Growth of Cheung Kong 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.
Ability to recruit top talent
– Li Taipan is one of the leading recruiters in the industry. Managers in the Li Ka-Shing and the Growth of Cheung Kong are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High brand equity
– Li Taipan has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Li Taipan to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Li Ka-Shing and the Growth of Cheung Kong | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Li Ka-Shing and the Growth of Cheung Kong are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Li Taipan is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Li Ka-Shing and the Growth of Cheung Kong can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Li Ka-Shing and the Growth of Cheung Kong, in the dynamic environment Li Taipan has struggled to respond to the nimble upstart competition. Li Taipan has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Li Taipan 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.
Low market penetration in new markets
– Outside its home market of Li Taipan, firm in the HBR case study Li Ka-Shing and the Growth of Cheung Kong needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Li Taipan supply chain. Even after few cautionary changes mentioned in the HBR case study - Li Ka-Shing and the Growth of Cheung Kong, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Li Taipan vulnerable to further global disruptions in South East Asia.
High cash cycle compare to competitors
Li Taipan 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.
Interest costs
– Compare to the competition, Li Taipan 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.
Capital Spending Reduction
– Even during the low interest decade, Li Taipan 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Li Taipan 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.
Need for greater diversity
– Li Taipan 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.
Increasing silos among functional specialists
– The organizational structure of Li Taipan is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Li Taipan needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Li Taipan to focus more on services rather than just following the product oriented approach.
Opportunities Li Ka-Shing and the Growth of Cheung Kong | 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 Li Ka-Shing and the Growth of Cheung Kong are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Li Taipan can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Li Taipan 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
– Li Taipan 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 Li Ka-Shing and the Growth of Cheung Kong - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Li Taipan to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Li Taipan in the consumer business. Now Li Taipan can target international markets with far fewer capital restrictions requirements than the existing system.
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 Li Taipan 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.
Loyalty marketing
– Li Taipan 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.
Buying journey improvements
– Li Taipan can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Li Ka-Shing and the Growth of Cheung Kong 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.
Creating value in data economy
– The success of analytics program of Li Taipan has opened avenues for new revenue streams for the organization in the industry. This can help Li Taipan to build a more holistic ecosystem as suggested in the Li Ka-Shing and the Growth of Cheung Kong case study. Li Taipan 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, Li Taipan 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, Li Ka-Shing and the Growth of Cheung Kong, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Li Taipan 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.
Manufacturing automation
– Li Taipan can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Li Taipan 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 Li Taipan to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Li Taipan can develop new processes and procedures in Leadership & Managing People 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.
Threats Li Ka-Shing and the Growth of Cheung Kong External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Li Ka-Shing and the Growth of Cheung Kong are -
Regulatory challenges
– Li Taipan 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 Leadership & Managing People industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Li Taipan 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 Li Taipan is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Li Taipan 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 wage structure of Li Taipan
– 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 Li Taipan.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Li Taipan in the Leadership & Managing People industry. The Leadership & Managing People 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.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Li Taipan can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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 Li Taipan.
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. Li Taipan needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
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 Li Taipan in the Leadership & Managing People sector and impact the bottomline of the organization.
Consumer confidence and its impact on Li Taipan 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 Li Ka-Shing and the Growth of Cheung Kong 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 Li Ka-Shing and the Growth of Cheung Kong 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 Li Ka-Shing and the Growth of Cheung Kong 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 Li Ka-Shing and the Growth of Cheung Kong 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 Li Ka-Shing and the Growth of Cheung Kong 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 Li Taipan needs to make to build a sustainable competitive advantage.
