CIL (479) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for CIL (Hong Kong)

Based on various researches at Oak Spring University , CIL is operating in a macro-environment that has been destablized by – there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing commodity prices, technology disruption, supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, etc

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Introduction to SWOT Analysis of CIL

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that CIL can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the CIL, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which CIL 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 CIL can be done for the following purposes –
1. Strategic planning of CIL
2. Improving business portfolio management of CIL
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Computer Hardware sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of CIL

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

The strengths of CIL are -

Low bargaining power of suppliers

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

High brand equity

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

Highly skilled collaborators

– CIL has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Computer Hardware industry. Secondly the value chain collaborators of CIL have helped the firm to develop new products and bring them quickly to the marketplace.

Organizational Resilience of CIL

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

Learning organization

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

Effective Research and Development (R&D)

– CIL has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – CIL staying ahead in the Computer Hardware industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Digital Transformation in Computer Hardware industry

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

– CIL 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 Computer Hardware 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.

Ability to lead change in Computer Hardware

– CIL is one of the leading players in the Computer Hardware industry in Hong Kong. Over the years it has not only transformed the business landscape in the Computer Hardware industry in Hong Kong but also across the existing markets. The ability to lead change has enabled CIL 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 CIL 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.

Successful track record of launching new products

– CIL has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. CIL 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.

Diverse revenue streams

– CIL is present in almost all the verticals within the Computer Hardware industry. This has provided CIL 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.

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

The weaknesses of CIL are -

Lack of clear differentiation of CIL products

– To increase the profitability and margins on the products, CIL needs to provide more differentiated products than what it is currently offering in the marketplace.

Products dominated business model

– Even though CIL has some of the most successful models in the Computer Hardware industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. CIL should strive to include more intangible value offerings along with its core products and services.

Ability to respond to the competition

– As the decision making is very deliberative at CIL, in the dynamic environment of Computer Hardware industry it has struggled to respond to the nimble upstart competition. CIL has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

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 CIL supply chain. Even after few cautionary changes, CIL is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left CIL vulnerable to further global disruptions in South East Asia.

Low market penetration in new markets

– Outside its home market of Hong Kong, CIL needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

No frontier risks strategy

– From the 10K / annual statement of CIL, it seems that company is thinking out the frontier risks that can impact Computer Hardware 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.

Workers concerns about automation

– As automation is fast increasing in the Computer Hardware industry, CIL 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.

Aligning sales with marketing

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

High operating costs

– Compare to the competitors, CIL has high operating costs in the Computer Hardware industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract CIL lucrative customers.

Employees’ less understanding of CIL strategy

– From the outside it seems that the employees of CIL 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.

Slow decision making process

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

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

The opportunities of CIL are -

Leveraging digital technologies

– CIL 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.

Building a culture of innovation

– managers at CIL 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 Computer Hardware industry.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for CIL 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 CIL to hire the very best people irrespective of their geographical location.

Lowering marketing communication costs

– 5G expansion will open new opportunities for CIL in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Computer Hardware industry, and it will provide faster access to the consumers.

Creating value in data economy

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

Identify volunteer opportunities

– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. CIL can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Use of Bitcoin and other crypto currencies for transactions in Computer Hardware industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for CIL in the Computer Hardware industry. Now CIL can target international markets with far fewer capital restrictions requirements than the existing system.

Buying journey improvements

– CIL can improve the customer journey of consumers in the Computer Hardware 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.

Reforming the budgeting process

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

Manufacturing automation

– CIL can use the latest technology developments to improve its manufacturing and designing process in Computer Hardware 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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Computer Hardware industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. CIL 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. CIL 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.

Using analytics as competitive advantage

– CIL has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Computer Hardware sector. This continuous investment in analytics has enabled CIL to build a competitive advantage using analytics. The analytics driven competitive advantage can help CIL to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Increase in government spending

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

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

The threats of CIL are -

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

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for CIL in Computer Hardware industry. The Computer Hardware 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.

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.

Stagnating economy with rate increase

– CIL 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 Computer Hardware 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 CIL.

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 CIL in the Computer Hardware sector and impact the bottomline of the organization.

Barriers of entry lowering

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

Consumer confidence and its impact on CIL 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 Computer Hardware industry and other sectors.

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. CIL needs to understand the core reasons impacting the Computer Hardware industry. This will help it in building a better workplace.

Shortening product life cycle

– it is one of the major threat that CIL is facing in Computer Hardware sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Technology acceleration in Forth Industrial Revolution

– CIL has witnessed rapid integration of technology during Covid-19 in the Computer Hardware industry. As one of the leading players in the industry, CIL needs to keep up with the evolution of technology in the Computer Hardware 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.

Learning curve for new practices

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

Regulatory challenges

– CIL 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 Computer Hardware industry regulations.

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Weighted SWOT Analysis of CIL Template, Example

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

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