CROSSTEC Group (3893) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

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

Based on various researches at Oak Spring University , CROSSTEC Group is operating in a macro-environment that has been destablized by – there is backlash against globalization, increasing transportation and logistics costs, supply chains are disrupted by pandemic , geopolitical disruptions, technology disruption, wage bills are increasing, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, etc

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Introduction to SWOT Analysis of CROSSTEC Group

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

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

The strengths of CROSSTEC Group are -

Sustainable margins compare to other players in Business Services industry

– CROSSTEC Group has clearly differentiated products in the market place. This has enabled CROSSTEC Group to fetch slight price premium compare to the competitors in the Business Services industry. The sustainable margins have also helped CROSSTEC Group to invest into research and development (R&D) and innovation.

Diverse revenue streams

– CROSSTEC Group is present in almost all the verticals within the Business Services industry. This has provided CROSSTEC Group 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.

Innovation driven organization

– CROSSTEC Group is one of the most innovative firm in Business Services sector.

Training and development

– CROSSTEC 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.

Learning organization

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

Superior customer experience

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

Organizational Resilience of CROSSTEC Group

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

Digital Transformation in Business Services industry

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

Strong track record of project management in the Business Services industry

– CROSSTEC 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.

Highly skilled collaborators

– CROSSTEC Group 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 CROSSTEC Group have helped the firm to develop new products and bring them quickly to the marketplace.

Successful track record of launching new products

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

Cross disciplinary teams

– Horizontal connected teams at the CROSSTEC Group are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.

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

The weaknesses of CROSSTEC Group are -

Aligning sales with marketing

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

Increasing silos among functional specialists

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

Products dominated business model

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

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

Capital Spending Reduction

– Even during the low interest decade, CROSSTEC 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 Business Services industry using digital technology.

Compensation and incentives

– The revenue per employee of CROSSTEC Group 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.

Employees’ less understanding of CROSSTEC Group strategy

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

High bargaining power of channel partners in Business Services industry

– because of the regulatory requirements in Hong Kong, CROSSTEC 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 Business Services industry.

Interest costs

– Compare to the competition, CROSSTEC 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.

Skills based hiring in Business Services industry

– The stress on hiring functional specialists at CROSSTEC Group 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.

High operating costs

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

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

The opportunities of CROSSTEC Group are -

Better consumer reach

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

Increase in government spending

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

Reforming the budgeting process

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

Loyalty marketing

– CROSSTEC 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, CROSSTEC 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 CROSSTEC 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.

Remote work and new talent hiring opportunities

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

Developing new processes and practices

– CROSSTEC Group 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.

Learning at scale

– Online learning technologies has now opened space for CROSSTEC 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.

Using analytics as competitive advantage

– CROSSTEC Group 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 CROSSTEC Group to build a competitive advantage using analytics. The analytics driven competitive advantage can help CROSSTEC Group to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

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 CROSSTEC 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.

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. CROSSTEC Group can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

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

Manufacturing automation

– CROSSTEC Group can use the latest technology developments to improve its manufacturing and designing process in Business 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.

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

The threats of CROSSTEC Group 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.

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. CROSSTEC Group 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.

Easy access to finance

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

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 CROSSTEC Group in the Business Services sector and impact the bottomline of the organization.

Technology acceleration in Forth Industrial Revolution

– CROSSTEC Group has witnessed rapid integration of technology during Covid-19 in the Business Services industry. As one of the leading players in the industry, CROSSTEC Group 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.

Stagnating economy with rate increase

– CROSSTEC 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 Business Services industry.

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

Environmental challenges

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

High dependence on third party suppliers

– CROSSTEC 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.

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 CROSSTEC Group.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, CROSSTEC Group can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate CROSSTEC Group prominent markets.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for CROSSTEC Group in Business Services industry. The Business 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.

Shortening product life cycle

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

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Weighted SWOT Analysis of CROSSTEC Group Template, Example

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

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