APlus Group (8251) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for APlus Group (Hong Kong)

Based on various researches at Oak Spring University , APlus Group is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, increasing commodity prices, challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, wage bills are increasing, increasing energy prices, etc

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Introduction to SWOT Analysis of APlus Group

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that APlus Group can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the APlus Group, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which APlus Group 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of APlus Group can be done for the following purposes –
1. Strategic planning of APlus Group
2. Improving business portfolio management of APlus Group
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Printing Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of APlus Group

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Strengths of APlus Group | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of APlus Group are -

Digital Transformation in Printing Services industry

- digital transformation varies from industry to industry. For APlus Group digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. APlus Group 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.

Ability to lead change in Printing Services

– APlus Group is one of the leading players in the Printing Services industry in Hong Kong. Over the years it has not only transformed the business landscape in the Printing Services industry in Hong Kong but also across the existing markets. The ability to lead change has enabled APlus Group in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Low bargaining power of suppliers

– Suppliers of APlus Group in the Services sector have low bargaining power. APlus Group has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps APlus Group to manage not only supply disruptions but also source products at highly competitive prices.

Training and development

– APlus Group 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.

Operational resilience

– The operational resilience strategy of APlus Group comprises – understanding the underlying the factors in the Printing Services 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.

High switching costs

– The high switching costs that APlus Group 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.

Superior customer experience

– The customer experience strategy of APlus Group in Printing Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Organizational Resilience of APlus Group

– The covid-19 pandemic has put organizational resilience at the centre of everthing APlus Group does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Learning organization

- APlus Group 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 APlus Group is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at APlus Group emphasize – knowledge, initiative, and innovation.

Ability to recruit top talent

– APlus Group is one of the leading players in the Printing Services industry in Hong Kong. It is in a position to attract the best talent available in Hong Kong. The firm has a robust talent identification program that helps in identifying the brightest.

High brand equity

– APlus Group has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled APlus Group to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Strong track record of project management in the Printing Services industry

– APlus Group is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

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Weaknesses of APlus Group | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of APlus Group are -

Capital Spending Reduction

– Even during the low interest decade, APlus Group 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 Printing Services industry using digital technology.

Interest costs

– Compare to the competition, APlus Group has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.

Aligning sales with marketing

– From the outside it seems that APlus Group needs to have more collaboration between its sales team and marketing team. Sales professionals in the Printing Services industry have deep experience in developing customer relationships. Marketing department at APlus Group can leverage the sales team experience to cultivate customer relationships as APlus Group is planning to shift buying processes online.

No frontier risks strategy

– From the 10K / annual statement of APlus Group, it seems that company is thinking out the frontier risks that can impact Printing Services industry. 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.

Need for greater diversity

– APlus Group 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.

Slow decision making process

– As mentioned earlier in the report, APlus Group has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Printing Services industry over the last five years. APlus Group 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.

High bargaining power of channel partners in Printing Services industry

– because of the regulatory requirements in Hong Kong, APlus Group 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 Printing Services industry.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, APlus Group is slow explore the new channels of communication. These new channels of communication can help APlus Group to provide better information regarding Printing Services products and services. It can also build an online community to further reach out to potential customers.

Increasing silos among functional specialists

– The organizational structure of APlus Group is dominated by functional specialists. It is not different from other players in the Printing Services industry, but APlus Group needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help APlus Group to focus more on services in the Printing Services industry rather than just following the product oriented approach.

High cash cycle compare to competitors

APlus Group has a high cash cycle compare to other players in the Printing Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

Employees’ less understanding of APlus Group strategy

– From the outside it seems that the employees of APlus Group 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.

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APlus Group Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of APlus Group are -

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. APlus Group can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Creating value in data economy

– The success of analytics program of APlus Group has opened avenues for new revenue streams for the organization in Printing Services industry. This can help APlus Group to build a more holistic ecosystem for APlus Group products in the Printing Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects APlus Group can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Printing Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. APlus Group 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. APlus Group 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, APlus Group 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 APlus Group to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Manufacturing automation

– APlus Group can use the latest technology developments to improve its manufacturing and designing process in Printing Services sector. 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, APlus Group is facing challenges because of the dominance of functional experts in the organization. APlus Group can utilize new technology in the field of Printing Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.

Reconfiguring business model

– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help APlus Group 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

– APlus Group 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.

Leveraging digital technologies

– APlus Group 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.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, APlus Group can use these opportunities to build new business models that can help the communities that APlus Group operates in. Secondly it can use opportunities from government spending in Printing Services sector.

Learning at scale

– Online learning technologies has now opened space for APlus Group 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.

Better consumer reach

– The expansion of the 5G network will help APlus Group to increase its market reach. APlus Group 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.

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Threats APlus Group External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of APlus Group are -

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 APlus Group.

Regulatory challenges

– APlus Group 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 Printing Services industry regulations.

Easy access to finance

– Easy access to finance in Printing Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. APlus Group can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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 APlus Group business can come under increasing regulations regarding data privacy, data security, etc.

Environmental challenges

– APlus Group 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. APlus Group can take advantage of this fund but it will also bring new competitors in the Printing Services industry.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, APlus Group may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Printing Services sector.

Stagnating economy with rate increase

– APlus Group 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 Printing Services industry.

High dependence on third party suppliers

– APlus Group high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Printing Services industry are lowering. It can presents APlus Group with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Printing Services sector.

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.

Increasing wage structure of APlus Group

– 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 APlus Group.

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. APlus Group needs to understand the core reasons impacting the Printing Services industry. This will help it in building a better workplace.

Consumer confidence and its impact on APlus Group 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 Printing Services industry and other sectors.

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Weighted SWOT Analysis of APlus Group Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at APlus Group 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 APlus Group 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 APlus Group 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 APlus Group 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 APlus Group needs to make to build a sustainable competitive advantage.

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