China Unicom Hong Kong (600050) SWOT Analysis / TOWS Matrix / MBA Resources
Communications Services
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for China Unicom Hong Kong (China)
Based on various researches at Oak Spring University , China Unicom Hong Kong is operating in a macro-environment that has been destablized by – technology disruption, increasing government debt because of Covid-19 spendings, increasing commodity prices, wage bills are increasing, increasing energy prices, digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%,
geopolitical disruptions, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of China Unicom Hong Kong
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that China Unicom Hong Kong can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the China Unicom Hong Kong, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which China Unicom Hong Kong 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 China Unicom Hong Kong can be done for the following purposes –
1. Strategic planning of China Unicom Hong Kong
2. Improving business portfolio management of China Unicom Hong Kong
3. Assessing feasibility of the new initiative in China
4. Making a Communications Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of China Unicom Hong Kong
Strengths of China Unicom Hong Kong | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of China Unicom Hong Kong are -
Digital Transformation in Communications Services industry
- digital transformation varies from industry to industry. For China Unicom Hong Kong digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. China Unicom Hong Kong 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 Communications Services industry
– China Unicom Hong Kong has clearly differentiated products in the market place. This has enabled China Unicom Hong Kong to fetch slight price premium compare to the competitors in the Communications Services industry. The sustainable margins have also helped China Unicom Hong Kong to invest into research and development (R&D) and innovation.
Strong track record of project management in the Communications Services industry
– China Unicom Hong Kong is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– China Unicom Hong Kong has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. China Unicom Hong Kong 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.
Learning organization
- China Unicom Hong Kong 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 China Unicom Hong Kong is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at China Unicom Hong Kong emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– China Unicom Hong Kong has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – China Unicom Hong Kong staying ahead in the Communications Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– China Unicom Hong Kong 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.
Ability to lead change in Communications Services
– China Unicom Hong Kong is one of the leading players in the Communications Services industry in China. Over the years it has not only transformed the business landscape in the Communications Services industry in China but also across the existing markets. The ability to lead change has enabled China Unicom Hong Kong in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the China Unicom Hong Kong 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.
Ability to recruit top talent
– China Unicom Hong Kong is one of the leading players in the Communications Services industry in China. It is in a position to attract the best talent available in China. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of China Unicom Hong Kong in Communications Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– China Unicom Hong Kong 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 Communications Services industry. The technology infrastructure of China 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 China Unicom Hong Kong | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of China Unicom Hong Kong are -
Compensation and incentives
– The revenue per employee of China Unicom Hong Kong is just above the Communications 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, China Unicom Hong Kong is slow explore the new channels of communication. These new channels of communication can help China Unicom Hong Kong to provide better information regarding Communications Services products and services. It can also build an online community to further reach out to potential customers.
No frontier risks strategy
– From the 10K / annual statement of China Unicom Hong Kong, it seems that company is thinking out the frontier risks that can impact Communications 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 Communications Services industry
– because of the regulatory requirements in China, China Unicom Hong Kong 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 Communications Services industry.
Workers concerns about automation
– As automation is fast increasing in the Communications Services industry, China Unicom Hong Kong 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.
Low market penetration in new markets
– Outside its home market of China, China Unicom Hong Kong needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High operating costs
– Compare to the competitors, China Unicom Hong Kong has high operating costs in the Communications Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract China Unicom Hong Kong lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, China Unicom Hong Kong 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 Communications Services industry using digital technology.
Ability to respond to the competition
– As the decision making is very deliberative at China Unicom Hong Kong, in the dynamic environment of Communications Services industry it has struggled to respond to the nimble upstart competition. China Unicom Hong Kong 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 China Unicom Hong Kong is dominated by functional specialists. It is not different from other players in the Communications Services industry, but China Unicom Hong Kong needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help China Unicom Hong Kong to focus more on services in the Communications Services industry rather than just following the product oriented approach.
Need for greater diversity
– China Unicom Hong Kong has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
China Unicom Hong Kong Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of China Unicom Hong Kong are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, China Unicom Hong Kong is facing challenges because of the dominance of functional experts in the organization. China Unicom Hong Kong can utilize new technology in the field of Communications Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, 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. China Unicom Hong Kong can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for China Unicom Hong Kong 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 China Unicom Hong Kong to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– China Unicom Hong Kong can develop new processes and procedures in Communications 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.
Use of Bitcoin and other crypto currencies for transactions in Communications Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for China Unicom Hong Kong in the Communications Services industry. Now China Unicom Hong Kong can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of China Unicom Hong Kong has opened avenues for new revenue streams for the organization in Communications Services industry. This can help China Unicom Hong Kong to build a more holistic ecosystem for China Unicom Hong Kong products in the Communications Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Loyalty marketing
– China Unicom Hong Kong 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.
Using analytics as competitive advantage
– China Unicom Hong Kong has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Communications Services sector. This continuous investment in analytics has enabled China Unicom Hong Kong to build a competitive advantage using analytics. The analytics driven competitive advantage can help China Unicom Hong Kong to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help China Unicom Hong Kong to increase its market reach. China Unicom Hong Kong 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.
Buying journey improvements
– China Unicom Hong Kong can improve the customer journey of consumers in the Communications 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.
Manufacturing automation
– China Unicom Hong Kong can use the latest technology developments to improve its manufacturing and designing process in Communications 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, China Unicom Hong Kong 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects China Unicom Hong Kong can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats China Unicom Hong Kong External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of China Unicom Hong Kong are -
Shortening product life cycle
– it is one of the major threat that China Unicom Hong Kong is facing in Communications Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Communications Services industry are lowering. It can presents China Unicom Hong Kong with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Communications Services sector.
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. China Unicom Hong Kong 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.
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 China Unicom Hong Kong in the Communications Services sector and impact the bottomline of the organization.
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. China Unicom Hong Kong needs to understand the core reasons impacting the Communications Services industry. This will help it in building a better workplace.
Technology acceleration in Forth Industrial Revolution
– China Unicom Hong Kong has witnessed rapid integration of technology during Covid-19 in the Communications Services industry. As one of the leading players in the industry, China Unicom Hong Kong needs to keep up with the evolution of technology in the Communications 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.
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.
Easy access to finance
– Easy access to finance in Communications Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. China Unicom Hong Kong can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 China Unicom Hong Kong.
Environmental challenges
– China Unicom Hong Kong 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. China Unicom Hong Kong can take advantage of this fund but it will also bring new competitors in the Communications Services industry.
Stagnating economy with rate increase
– China Unicom Hong Kong 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 Communications Services industry.
Consumer confidence and its impact on China Unicom Hong Kong 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 Communications Services industry and other sectors.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, China Unicom Hong Kong 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 China Unicom Hong Kong prominent markets.
Weighted SWOT Analysis of China Unicom Hong Kong Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at China Unicom Hong Kong 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 China Unicom Hong Kong 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 China Unicom Hong Kong 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 China Unicom Hong Kong 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 China Unicom Hong Kong needs to make to build a sustainable competitive advantage.