SWOT Analysis / TOWS Matrix for Hiap Huat (Malaysia)
Based on various researches at Oak Spring University , Hiap Huat is operating in a macro-environment that has been destablized by – increasing energy prices, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization,
cloud computing is disrupting traditional business models, technology disruption, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Hiap Huat can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hiap Huat, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hiap Huat 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 Hiap Huat can be done for the following purposes –
1. Strategic planning of Hiap Huat
2. Improving business portfolio management of Hiap Huat
3. Assessing feasibility of the new initiative in Malaysia
4. Making a Waste Management Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hiap Huat
Strengths of Hiap Huat | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hiap Huat are -
Innovation driven organization
– Hiap Huat is one of the most innovative firm in Waste Management Services sector.
Low bargaining power of suppliers
– Suppliers of Hiap Huat in the Services sector have low bargaining power. Hiap Huat has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hiap Huat to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in Waste Management Services industry
- digital transformation varies from industry to industry. For Hiap Huat digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hiap Huat 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.
Sustainable margins compare to other players in Waste Management Services industry
– Hiap Huat has clearly differentiated products in the market place. This has enabled Hiap Huat to fetch slight price premium compare to the competitors in the Waste Management Services industry. The sustainable margins have also helped Hiap Huat to invest into research and development (R&D) and innovation.
Ability to lead change in Waste Management Services
– Hiap Huat is one of the leading players in the Waste Management Services industry in Malaysia. Over the years it has not only transformed the business landscape in the Waste Management Services industry in Malaysia but also across the existing markets. The ability to lead change has enabled Hiap Huat in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Hiap Huat has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hiap Huat to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Hiap Huat 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.
Strong track record of project management in the Waste Management Services industry
– Hiap Huat 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
– Hiap Huat has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Waste Management Services industry. Secondly the value chain collaborators of Hiap Huat have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Hiap Huat is present in almost all the verticals within the Waste Management Services industry. This has provided Hiap Huat 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.
High switching costs
– The high switching costs that Hiap Huat 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.
Analytics focus
– Hiap Huat 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 Waste Management Services industry. The technology infrastructure of Malaysia 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.
Weaknesses of Hiap Huat | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hiap Huat are -
High operating costs
– Compare to the competitors, Hiap Huat has high operating costs in the Waste Management Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Hiap Huat lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative at Hiap Huat, in the dynamic environment of Waste Management Services industry it has struggled to respond to the nimble upstart competition. Hiap Huat has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Malaysia, Hiap Huat needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the Waste Management Services industry, Hiap Huat 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 Hiap Huat products
– To increase the profitability and margins on the products, Hiap Huat needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on Hiap Huat ‘s star products
– The top 2 products and services of Hiap Huat still accounts for major business revenue. This dependence on star products in Waste Management Services industry has resulted into insufficient focus on developing new products, even though Hiap Huat has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Hiap Huat is slow explore the new channels of communication. These new channels of communication can help Hiap Huat to provide better information regarding Waste Management Services products and services. It can also build an online community to further reach out to potential customers.
Employees’ less understanding of Hiap Huat strategy
– From the outside it seems that the employees of Hiap Huat 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.
No frontier risks strategy
– From the 10K / annual statement of Hiap Huat, it seems that company is thinking out the frontier risks that can impact Waste Management 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.
High bargaining power of channel partners in Waste Management Services industry
– because of the regulatory requirements in Malaysia, Hiap Huat 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 Waste Management Services industry.
Slow decision making process
– As mentioned earlier in the report, Hiap Huat has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Waste Management Services industry over the last five years. Hiap Huat 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.
Hiap Huat Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Hiap Huat are -
Creating value in data economy
– The success of analytics program of Hiap Huat has opened avenues for new revenue streams for the organization in Waste Management Services industry. This can help Hiap Huat to build a more holistic ecosystem for Hiap Huat products in the Waste Management Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Hiap Huat can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Leveraging digital technologies
– Hiap Huat 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.
Loyalty marketing
– Hiap Huat 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 Waste Management Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Hiap Huat 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. Hiap Huat 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.
Learning at scale
– Online learning technologies has now opened space for Hiap Huat 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.
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 Hiap Huat 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.
Using analytics as competitive advantage
– Hiap Huat has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Waste Management Services sector. This continuous investment in analytics has enabled Hiap Huat to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hiap Huat to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Waste Management Services industry, but it has also influenced the consumer preferences. Hiap Huat can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Hiap Huat 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 Waste Management Services industry.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hiap Huat 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 Hiap Huat to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hiap Huat in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Waste Management Services industry, and it will provide faster access to the consumers.
Buying journey improvements
– Hiap Huat can improve the customer journey of consumers in the Waste Management 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.
Threats Hiap Huat External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Hiap Huat are -
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.
Shortening product life cycle
– it is one of the major threat that Hiap Huat is facing in Waste Management Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Hiap Huat may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Waste Management Services sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hiap Huat in Waste Management Services industry. The Waste Management 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.
Easy access to finance
– Easy access to finance in Waste Management Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Hiap Huat can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Hiap Huat 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 Waste Management Services industry and other sectors.
Environmental challenges
– Hiap Huat 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. Hiap Huat can take advantage of this fund but it will also bring new competitors in the Waste Management Services industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hiap Huat 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 Hiap Huat prominent markets.
Technology acceleration in Forth Industrial Revolution
– Hiap Huat has witnessed rapid integration of technology during Covid-19 in the Waste Management Services industry. As one of the leading players in the industry, Hiap Huat needs to keep up with the evolution of technology in the Waste Management 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.
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 Hiap Huat.
High dependence on third party suppliers
– Hiap Huat 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Waste Management Services industry are lowering. It can presents Hiap Huat with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Waste Management Services sector.
Weighted SWOT Analysis of Hiap Huat Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Hiap Huat 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 Hiap Huat 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 Hiap Huat 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 Hiap Huat 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 Hiap Huat needs to make to build a sustainable competitive advantage.