Kiu Hung Intl (381) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Kiu Hung Intl (Hong Kong)

Based on various researches at Oak Spring University , Kiu Hung Intl is operating in a macro-environment that has been destablized by – increasing energy prices, there is backlash against globalization, geopolitical disruptions, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, etc

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Introduction to SWOT Analysis of Kiu Hung Intl

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

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Strengths of Kiu Hung Intl | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Kiu Hung Intl are -

Sustainable margins compare to other players in Recreational Products industry

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

Highly skilled collaborators

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

Low bargaining power of suppliers

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

Training and development

– Kiu Hung Intl has one of the best training and development program in Consumer Cyclical 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.

Organizational Resilience of Kiu Hung Intl

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

Cross disciplinary teams

– Horizontal connected teams at the Kiu Hung Intl 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.

Effective Research and Development (R&D)

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

Ability to recruit top talent

– Kiu Hung Intl is one of the leading players in the Recreational Products 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.

Analytics focus

– Kiu Hung Intl 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 Recreational Products 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.

Digital Transformation in Recreational Products industry

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

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

Innovation driven organization

– Kiu Hung Intl is one of the most innovative firm in Recreational Products sector.

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Weaknesses of Kiu Hung Intl | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Kiu Hung Intl are -

Low market penetration in new markets

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

Lack of clear differentiation of Kiu Hung Intl products

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

High bargaining power of channel partners in Recreational Products industry

– because of the regulatory requirements in Hong Kong, Kiu Hung Intl 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 Recreational Products industry.

Ability to respond to the competition

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

Increasing silos among functional specialists

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

Capital Spending Reduction

– Even during the low interest decade, Kiu Hung Intl 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 Recreational Products industry using digital technology.

No frontier risks strategy

– From the 10K / annual statement of Kiu Hung Intl, it seems that company is thinking out the frontier risks that can impact Recreational Products 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.

Slow decision making process

– As mentioned earlier in the report, Kiu Hung Intl has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Recreational Products industry over the last five years. Kiu Hung Intl 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 dependence on Kiu Hung Intl ‘s star products

– The top 2 products and services of Kiu Hung Intl still accounts for major business revenue. This dependence on star products in Recreational Products industry has resulted into insufficient focus on developing new products, even though Kiu Hung Intl has relatively successful track record of launching new products.

Workers concerns about automation

– As automation is fast increasing in the Recreational Products industry, Kiu Hung Intl 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 Kiu Hung Intl needs to have more collaboration between its sales team and marketing team. Sales professionals in the Recreational Products industry have deep experience in developing customer relationships. Marketing department at Kiu Hung Intl can leverage the sales team experience to cultivate customer relationships as Kiu Hung Intl is planning to shift buying processes online.

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Kiu Hung Intl Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Kiu Hung Intl are -

Low interest rates

– Even though inflation is raising its head in most developed economies, Kiu Hung Intl can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.

Leveraging digital technologies

– Kiu Hung Intl 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.

Remote work and new talent hiring opportunities

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

Manufacturing automation

– Kiu Hung Intl can use the latest technology developments to improve its manufacturing and designing process in Recreational Products 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.

Using analytics as competitive advantage

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

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. Kiu Hung Intl can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Harnessing reconfiguration of the global supply chains

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

Buying journey improvements

– Kiu Hung Intl can improve the customer journey of consumers in the Recreational Products 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.

Developing new processes and practices

– Kiu Hung Intl can develop new processes and procedures in Recreational Products 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, Kiu Hung Intl can use these opportunities to build new business models that can help the communities that Kiu Hung Intl operates in. Secondly it can use opportunities from government spending in Recreational Products sector.

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 Kiu Hung Intl 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

– Kiu Hung Intl 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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Recreational Products industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Kiu Hung Intl 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. Kiu Hung Intl 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.

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Threats Kiu Hung Intl External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Kiu Hung Intl are -

Technology acceleration in Forth Industrial Revolution

– Kiu Hung Intl has witnessed rapid integration of technology during Covid-19 in the Recreational Products industry. As one of the leading players in the industry, Kiu Hung Intl needs to keep up with the evolution of technology in the Recreational Products 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, Kiu Hung Intl may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Recreational Products sector.

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 Kiu Hung Intl.

Easy access to finance

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

Shortening product life cycle

– it is one of the major threat that Kiu Hung Intl is facing in Recreational Products sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

New competition

– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Kiu Hung Intl in the Recreational Products sector and impact the bottomline of the organization.

Increasing wage structure of Kiu Hung Intl

– 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 Kiu Hung Intl.

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 Kiu Hung Intl business can come under increasing regulations regarding data privacy, data security, etc.

Environmental challenges

– Kiu Hung Intl 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. Kiu Hung Intl can take advantage of this fund but it will also bring new competitors in the Recreational Products industry.

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. Kiu Hung Intl needs to understand the core reasons impacting the Recreational Products industry. This will help it in building a better workplace.

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.

Barriers of entry lowering

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

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.

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Weighted SWOT Analysis of Kiu Hung Intl Template, Example

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

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