SWOT Analysis / TOWS Matrix for C&N Holdings (Hong Kong)
Based on various researches at Oak Spring University , C&N Holdings is operating in a macro-environment that has been destablized by – technology disruption, there is increasing trade war between United States & China, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing,
talent flight as more people leaving formal jobs, there is backlash against globalization, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that C&N Holdings can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the C&N Holdings, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which C&N Holdings 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 C&N Holdings can be done for the following purposes –
1. Strategic planning of C&N Holdings
2. Improving business portfolio management of C&N Holdings
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Business Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of C&N Holdings
Strengths of C&N Holdings | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of C&N Holdings are -
Analytics focus
– C&N Holdings 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 Business Services industry. The technology infrastructure of Hong Kong is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Low bargaining power of suppliers
– Suppliers of C&N Holdings in the Services sector have low bargaining power. C&N Holdings has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps C&N Holdings to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– C&N Holdings is one of the most innovative firm in Business Services sector.
Digital Transformation in Business Services industry
- digital transformation varies from industry to industry. For C&N Holdings digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. C&N Holdings 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.
Highly skilled collaborators
– C&N Holdings has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Business Services industry. Secondly the value chain collaborators of C&N Holdings have helped the firm to develop new products and bring them quickly to the marketplace.
Effective Research and Development (R&D)
– C&N Holdings has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – C&N Holdings staying ahead in the Business Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Business Services industry
– C&N Holdings has clearly differentiated products in the market place. This has enabled C&N Holdings to fetch slight price premium compare to the competitors in the Business Services industry. The sustainable margins have also helped C&N Holdings to invest into research and development (R&D) and innovation.
Organizational Resilience of C&N Holdings
– The covid-19 pandemic has put organizational resilience at the centre of everthing C&N Holdings does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– C&N Holdings has one of the best training and development program in Services industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Learning organization
- C&N Holdings 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 C&N Holdings is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at C&N Holdings emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– C&N Holdings has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. C&N Holdings 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 switching costs
– The high switching costs that C&N Holdings 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 of C&N Holdings | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of C&N Holdings are -
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, C&N Holdings is slow explore the new channels of communication. These new channels of communication can help C&N Holdings to provide better information regarding Business Services products and services. It can also build an online community to further reach out to potential customers.
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 C&N Holdings supply chain. Even after few cautionary changes, C&N Holdings is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left C&N Holdings vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners in Business Services industry
– because of the regulatory requirements in Hong Kong, C&N Holdings 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 Business Services industry.
Ability to respond to the competition
– As the decision making is very deliberative at C&N Holdings, in the dynamic environment of Business Services industry it has struggled to respond to the nimble upstart competition. C&N Holdings has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, C&N Holdings 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.
Compensation and incentives
– The revenue per employee of C&N Holdings is just above the Business Services industry average. It 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 to strategic competitive environment developments
– As C&N Holdings is one of the leading players in the Business Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Business Services industry in last five years.
Increasing silos among functional specialists
– The organizational structure of C&N Holdings is dominated by functional specialists. It is not different from other players in the Business Services industry, but C&N Holdings needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help C&N Holdings to focus more on services in the Business Services industry rather than just following the product oriented approach.
Slow decision making process
– As mentioned earlier in the report, C&N Holdings has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Business Services industry over the last five years. C&N Holdings 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.
Lack of clear differentiation of C&N Holdings products
– To increase the profitability and margins on the products, C&N Holdings needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring in Business Services industry
– The stress on hiring functional specialists at C&N Holdings 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.
C&N Holdings Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of C&N Holdings are -
Creating value in data economy
– The success of analytics program of C&N Holdings has opened avenues for new revenue streams for the organization in Business Services industry. This can help C&N Holdings to build a more holistic ecosystem for C&N Holdings products in the Business Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– C&N Holdings can improve the customer journey of consumers in the Business Services industry by using analytics and artificial intelligence. It 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.
Use of Bitcoin and other crypto currencies for transactions in Business Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for C&N Holdings in the Business Services industry. Now C&N Holdings can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for C&N Holdings 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 C&N Holdings to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– C&N Holdings can develop new processes and procedures in Business Services 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for C&N Holdings in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Business Services industry, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help C&N Holdings to increase its market reach. C&N Holdings 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, C&N Holdings 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 C&N Holdings to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, C&N Holdings 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Business Services industry, but it has also influenced the consumer preferences. C&N Holdings can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Business Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. C&N Holdings 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. C&N Holdings 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.
Building a culture of innovation
– managers at C&N Holdings 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 Business Services industry.
Using analytics as competitive advantage
– C&N Holdings has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Business Services sector. This continuous investment in analytics has enabled C&N Holdings to build a competitive advantage using analytics. The analytics driven competitive advantage can help C&N Holdings to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats C&N Holdings External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of C&N Holdings are -
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.
Regulatory challenges
– C&N Holdings 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 Business Services industry regulations.
Consumer confidence and its impact on C&N Holdings 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 Business Services industry and other sectors.
Environmental challenges
– C&N Holdings 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. C&N Holdings can take advantage of this fund but it will also bring new competitors in the Business Services industry.
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 C&N Holdings.
Increasing wage structure of C&N Holdings
– 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 C&N Holdings.
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. C&N Holdings needs to understand the core reasons impacting the Business Services industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Business Services industry are lowering. It can presents C&N Holdings with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Business Services 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. C&N Holdings 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.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of C&N Holdings business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– C&N Holdings has witnessed rapid integration of technology during Covid-19 in the Business Services industry. As one of the leading players in the industry, C&N Holdings needs to keep up with the evolution of technology in the Business Services 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 C&N Holdings is facing in Business Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for C&N Holdings in the Business Services sector and impact the bottomline of the organization.
Weighted SWOT Analysis of C&N Holdings Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at C&N Holdings 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 C&N Holdings 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 C&N Holdings 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 C&N Holdings 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 C&N Holdings needs to make to build a sustainable competitive advantage.