Modern Beauty Salon Holdings (919) SWOT Analysis / TOWS Matrix / MBA Resources
Personal Services
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Modern Beauty Salon Holdings (Hong Kong)
Based on various researches at Oak Spring University , Modern Beauty Salon Holdings is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, geopolitical disruptions, increasing household debt because of falling income levels, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies,
wage bills are increasing, increasing commodity prices, etc
Introduction to SWOT Analysis of Modern Beauty Salon Holdings
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Modern Beauty Salon Holdings can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Modern Beauty Salon Holdings, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Modern Beauty Salon 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 Modern Beauty Salon Holdings can be done for the following purposes –
1. Strategic planning of Modern Beauty Salon Holdings
2. Improving business portfolio management of Modern Beauty Salon Holdings
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Personal Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Modern Beauty Salon Holdings
Strengths of Modern Beauty Salon Holdings | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Modern Beauty Salon Holdings are -
Successful track record of launching new products
– Modern Beauty Salon Holdings has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Modern Beauty Salon 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.
Analytics focus
– Modern Beauty Salon 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 Personal 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.
Organizational Resilience of Modern Beauty Salon Holdings
– The covid-19 pandemic has put organizational resilience at the centre of everthing Modern Beauty Salon Holdings does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Modern Beauty Salon 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.
Sustainable margins compare to other players in Personal Services industry
– Modern Beauty Salon Holdings has clearly differentiated products in the market place. This has enabled Modern Beauty Salon Holdings to fetch slight price premium compare to the competitors in the Personal Services industry. The sustainable margins have also helped Modern Beauty Salon Holdings to invest into research and development (R&D) and innovation.
Learning organization
- Modern Beauty Salon 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 Modern Beauty Salon Holdings is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Modern Beauty Salon Holdings emphasize – knowledge, initiative, and innovation.
Strong track record of project management in the Personal Services industry
– Modern Beauty Salon Holdings is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy of Modern Beauty Salon Holdings comprises – understanding the underlying the factors in the Personal 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.
Highly skilled collaborators
– Modern Beauty Salon Holdings has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Personal Services industry. Secondly the value chain collaborators of Modern Beauty Salon Holdings have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Modern Beauty Salon Holdings is one of the leading players in the Personal 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.
Effective Research and Development (R&D)
– Modern Beauty Salon Holdings has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Modern Beauty Salon Holdings staying ahead in the Personal Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Modern Beauty Salon Holdings is present in almost all the verticals within the Personal Services industry. This has provided Modern Beauty Salon Holdings 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.
Weaknesses of Modern Beauty Salon Holdings | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Modern Beauty Salon Holdings are -
Capital Spending Reduction
– Even during the low interest decade, Modern Beauty Salon Holdings 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 Personal Services industry using digital technology.
No frontier risks strategy
– From the 10K / annual statement of Modern Beauty Salon Holdings, it seems that company is thinking out the frontier risks that can impact Personal 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.
Employees’ less understanding of Modern Beauty Salon Holdings strategy
– From the outside it seems that the employees of Modern Beauty Salon Holdings 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.
Need for greater diversity
– Modern Beauty Salon Holdings 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.
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 Modern Beauty Salon Holdings supply chain. Even after few cautionary changes, Modern Beauty Salon Holdings is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Modern Beauty Salon Holdings vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Modern Beauty Salon Holdings is dominated by functional specialists. It is not different from other players in the Personal Services industry, but Modern Beauty Salon Holdings needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Modern Beauty Salon Holdings to focus more on services in the Personal Services industry rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the Personal Services industry, Modern Beauty Salon Holdings 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.
Lack of clear differentiation of Modern Beauty Salon Holdings products
– To increase the profitability and margins on the products, Modern Beauty Salon Holdings needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on Modern Beauty Salon Holdings ‘s star products
– The top 2 products and services of Modern Beauty Salon Holdings still accounts for major business revenue. This dependence on star products in Personal Services industry has resulted into insufficient focus on developing new products, even though Modern Beauty Salon Holdings has relatively successful track record of launching new products.
Compensation and incentives
– The revenue per employee of Modern Beauty Salon Holdings is just above the Personal 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.
Products dominated business model
– Even though Modern Beauty Salon Holdings has some of the most successful models in the Personal Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Modern Beauty Salon Holdings should strive to include more intangible value offerings along with its core products and services.
Modern Beauty Salon Holdings Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Modern Beauty Salon Holdings are -
Use of Bitcoin and other crypto currencies for transactions in Personal Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Modern Beauty Salon Holdings in the Personal Services industry. Now Modern Beauty Salon Holdings can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Modern Beauty Salon Holdings is facing challenges because of the dominance of functional experts in the organization. Modern Beauty Salon Holdings can utilize new technology in the field of Personal Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Better consumer reach
– The expansion of the 5G network will help Modern Beauty Salon Holdings to increase its market reach. Modern Beauty Salon 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.
Manufacturing automation
– Modern Beauty Salon Holdings can use the latest technology developments to improve its manufacturing and designing process in Personal 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.
Buying journey improvements
– Modern Beauty Salon Holdings can improve the customer journey of consumers in the Personal 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Personal Services industry, but it has also influenced the consumer preferences. Modern Beauty Salon Holdings can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Modern Beauty Salon Holdings can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Modern Beauty Salon Holdings can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Modern Beauty Salon Holdings 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.
Building a culture of innovation
– managers at Modern Beauty Salon 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 Personal Services industry.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Personal Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Modern Beauty Salon 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. Modern Beauty Salon 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.
Developing new processes and practices
– Modern Beauty Salon Holdings can develop new processes and procedures in Personal 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Modern Beauty Salon Holdings can use these opportunities to build new business models that can help the communities that Modern Beauty Salon Holdings operates in. Secondly it can use opportunities from government spending in Personal Services sector.
Threats Modern Beauty Salon Holdings External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Modern Beauty Salon Holdings are -
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 Modern Beauty Salon Holdings in the Personal Services sector and impact the bottomline of the organization.
Regulatory challenges
– Modern Beauty Salon 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 Personal Services industry regulations.
Environmental challenges
– Modern Beauty Salon 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. Modern Beauty Salon Holdings can take advantage of this fund but it will also bring new competitors in the Personal Services industry.
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.
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.
Consumer confidence and its impact on Modern Beauty Salon 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 Personal Services industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Modern Beauty Salon Holdings may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Personal Services sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Modern Beauty Salon Holdings in Personal Services industry. The Personal Services 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.
Stagnating economy with rate increase
– Modern Beauty Salon Holdings 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 Personal Services industry.
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. Modern Beauty Salon 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Personal Services industry are lowering. It can presents Modern Beauty Salon Holdings with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Personal Services sector.
High dependence on third party suppliers
– Modern Beauty Salon Holdings 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.
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. Modern Beauty Salon Holdings needs to understand the core reasons impacting the Personal Services industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Modern Beauty Salon Holdings Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Modern Beauty Salon 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 Modern Beauty Salon 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 Modern Beauty Salon 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 Modern Beauty Salon 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 Modern Beauty Salon Holdings needs to make to build a sustainable competitive advantage.