SWOT Analysis / TOWS Matrix for Melco Holdings Inc (Japan)
Based on various researches at Oak Spring University , Melco Holdings Inc is operating in a macro-environment that has been destablized by – wage bills are increasing, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy,
increasing commodity prices, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Melco Holdings Inc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Melco Holdings Inc can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Melco Holdings Inc, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Melco Holdings Inc 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 Melco Holdings Inc can be done for the following purposes –
1. Strategic planning of Melco Holdings Inc
2. Improving business portfolio management of Melco Holdings Inc
3. Assessing feasibility of the new initiative in Japan
4. Making a Computer Storage Devices sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Melco Holdings Inc
Strengths of Melco Holdings Inc | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Melco Holdings Inc are -
Highly skilled collaborators
– Melco Holdings Inc has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Computer Storage Devices industry. Secondly the value chain collaborators of Melco Holdings Inc have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy of Melco Holdings Inc comprises – understanding the underlying the factors in the Computer Storage Devices industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
High brand equity
– Melco Holdings Inc has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Melco Holdings Inc to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Melco Holdings Inc has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Melco Holdings Inc staying ahead in the Computer Storage Devices industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Learning organization
- Melco Holdings Inc 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 Melco Holdings Inc is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Melco Holdings Inc emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Melco Holdings Inc is present in almost all the verticals within the Computer Storage Devices industry. This has provided Melco Holdings Inc 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.
Digital Transformation in Computer Storage Devices industry
- digital transformation varies from industry to industry. For Melco Holdings Inc digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Melco Holdings Inc 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
– Melco Holdings Inc 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 Storage Devices industry. The technology infrastructure of Japan 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.
Innovation driven organization
– Melco Holdings Inc is one of the most innovative firm in Computer Storage Devices sector.
Superior customer experience
– The customer experience strategy of Melco Holdings Inc in Computer Storage Devices industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Melco Holdings Inc has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Melco Holdings Inc 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 Melco Holdings Inc 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.
Weaknesses of Melco Holdings Inc | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Melco Holdings Inc are -
Aligning sales with marketing
– From the outside it seems that Melco Holdings Inc needs to have more collaboration between its sales team and marketing team. Sales professionals in the Computer Storage Devices industry have deep experience in developing customer relationships. Marketing department at Melco Holdings Inc can leverage the sales team experience to cultivate customer relationships as Melco Holdings Inc is planning to shift buying processes online.
Lack of clear differentiation of Melco Holdings Inc products
– To increase the profitability and margins on the products, Melco Holdings Inc needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, Melco Holdings Inc has high operating costs in the Computer Storage Devices industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Melco Holdings Inc lucrative customers.
Interest costs
– Compare to the competition, Melco Holdings Inc 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.
Low market penetration in new markets
– Outside its home market of Japan, Melco Holdings Inc needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Melco Holdings Inc is slow explore the new channels of communication. These new channels of communication can help Melco Holdings Inc to provide better information regarding Computer Storage Devices products and services. It can also build an online community to further reach out to potential customers.
Employees’ less understanding of Melco Holdings Inc strategy
– From the outside it seems that the employees of Melco Holdings Inc 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.
Skills based hiring in Computer Storage Devices industry
– The stress on hiring functional specialists at Melco Holdings Inc 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.
Slow to strategic competitive environment developments
– As Melco Holdings Inc is one of the leading players in the Computer Storage Devices industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Computer Storage Devices industry in last five years.
Capital Spending Reduction
– Even during the low interest decade, Melco Holdings Inc 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 Computer Storage Devices industry using digital technology.
No frontier risks strategy
– From the 10K / annual statement of Melco Holdings Inc, it seems that company is thinking out the frontier risks that can impact Computer Storage Devices 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.
Melco Holdings Inc Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Melco Holdings Inc are -
Buying journey improvements
– Melco Holdings Inc can improve the customer journey of consumers in the Computer Storage Devices 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Melco Holdings Inc 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 Storage Devices industry, and it will provide faster access to the consumers.
Loyalty marketing
– Melco Holdings Inc 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.
Manufacturing automation
– Melco Holdings Inc can use the latest technology developments to improve its manufacturing and designing process in Computer Storage Devices 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.
Developing new processes and practices
– Melco Holdings Inc can develop new processes and procedures in Computer Storage Devices 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Computer Storage Devices industry, but it has also influenced the consumer preferences. Melco Holdings Inc can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Melco Holdings Inc to increase its market reach. Melco Holdings Inc 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.
Building a culture of innovation
– managers at Melco Holdings Inc 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 Storage Devices industry.
Use of Bitcoin and other crypto currencies for transactions in Computer Storage Devices industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Melco Holdings Inc in the Computer Storage Devices industry. Now Melco Holdings Inc can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Melco Holdings Inc 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 Melco Holdings Inc to hire the very best people irrespective of their geographical location.
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. Melco Holdings Inc can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Melco Holdings Inc has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Computer Storage Devices sector. This continuous investment in analytics has enabled Melco Holdings Inc to build a competitive advantage using analytics. The analytics driven competitive advantage can help Melco Holdings Inc 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, Melco Holdings Inc can use these opportunities to build new business models that can help the communities that Melco Holdings Inc operates in. Secondly it can use opportunities from government spending in Computer Storage Devices sector.
Threats Melco Holdings Inc External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Melco Holdings Inc are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Melco Holdings Inc in Computer Storage Devices industry. The Computer Storage Devices 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.
High dependence on third party suppliers
– Melco Holdings Inc 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Melco Holdings Inc 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 Storage Devices sector.
Stagnating economy with rate increase
– Melco Holdings Inc 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 Storage Devices industry.
Increasing wage structure of Melco Holdings Inc
– 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 Melco Holdings Inc.
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.
Technology acceleration in Forth Industrial Revolution
– Melco Holdings Inc has witnessed rapid integration of technology during Covid-19 in the Computer Storage Devices industry. As one of the leading players in the industry, Melco Holdings Inc needs to keep up with the evolution of technology in the Computer Storage Devices 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Melco Holdings Inc 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 Melco Holdings Inc prominent markets.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Computer Storage Devices industry are lowering. It can presents Melco Holdings Inc with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Computer Storage Devices sector.
Regulatory challenges
– Melco Holdings Inc 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 Storage Devices industry regulations.
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. Melco Holdings Inc 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.
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. Melco Holdings Inc needs to understand the core reasons impacting the Computer Storage Devices industry. This will help it in building a better workplace.
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 Melco Holdings Inc.
Weighted SWOT Analysis of Melco Holdings Inc Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Melco Holdings Inc 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 Melco Holdings Inc 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 Melco Holdings Inc 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 Melco Holdings Inc 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 Melco Holdings Inc needs to make to build a sustainable competitive advantage.
