China Unicom Hong Kong (762) SWOT Analysis / TOWS Matrix / MBA Resources
Communications Services
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for China Unicom Hong Kong (Hong Kong)
Based on various researches at Oak Spring University , China Unicom Hong Kong is operating in a macro-environment that has been destablized by – geopolitical disruptions, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, increasing transportation and logistics costs, talent flight as more people leaving formal jobs, wage bills are increasing, increasing household debt because of falling income levels,
challanges to central banks by blockchain based private currencies, banking and financial system is disrupted by Bitcoin and other crypto currencies, 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 Hong Kong
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 -
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.
Diverse revenue streams
– China Unicom Hong Kong is present in almost all the verticals within the Communications Services industry. This has provided China Unicom Hong Kong 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.
Ability to recruit top talent
– China Unicom Hong Kong is one of the leading players in the Communications Services 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.
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.
High brand equity
– China Unicom Hong Kong has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled China Unicom Hong Kong to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
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.
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.
High switching costs
– The high switching costs that China Unicom Hong Kong 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.
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.
Low bargaining power of suppliers
– Suppliers of China Unicom Hong Kong in the Services sector have low bargaining power. China Unicom Hong Kong has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps China Unicom Hong Kong to manage not only supply disruptions but also source products at highly competitive prices.
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.
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 -
High dependence on China Unicom Hong Kong ‘s star products
– The top 2 products and services of China Unicom Hong Kong still accounts for major business revenue. This dependence on star products in Communications Services industry has resulted into insufficient focus on developing new products, even though China Unicom Hong Kong has relatively successful track record of launching new products.
Employees’ less understanding of China Unicom Hong Kong strategy
– From the outside it seems that the employees of China Unicom Hong Kong don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of China Unicom Hong Kong supply chain. Even after few cautionary changes, China Unicom Hong Kong is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left China Unicom Hong Kong vulnerable to further global disruptions in South East Asia.
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.
Aligning sales with marketing
– From the outside it seems that China Unicom Hong Kong needs to have more collaboration between its sales team and marketing team. Sales professionals in the Communications Services industry have deep experience in developing customer relationships. Marketing department at China Unicom Hong Kong can leverage the sales team experience to cultivate customer relationships as China Unicom Hong Kong is planning to shift buying processes online.
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.
Products dominated business model
– Even though China Unicom Hong Kong has some of the most successful models in the Communications Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. China Unicom Hong Kong should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
China Unicom Hong Kong has a high cash cycle compare to other players in the Communications Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Low market penetration in new markets
– Outside its home market of Hong Kong, 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.
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 -
Lowering marketing communication costs
– 5G expansion will open new opportunities for China Unicom Hong Kong in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Communications Services industry, and it will provide faster access to the consumers.
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.
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.
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.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Communications Services industry, but it has also influenced the consumer preferences. China Unicom Hong Kong can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, China Unicom Hong Kong can use these opportunities to build new business models that can help the communities that China Unicom Hong Kong operates in. Secondly it can use opportunities from government spending in Communications Services sector.
Learning at scale
– Online learning technologies has now opened space for China Unicom Hong Kong 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, China Unicom Hong Kong 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 China Unicom Hong Kong to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, China Unicom Hong Kong may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Communications Services 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for China Unicom Hong Kong in Communications Services industry. The Communications 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.
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.
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.
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.
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.
High dependence on third party suppliers
– China Unicom Hong Kong 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.
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.
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.
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 wage structure of China Unicom Hong Kong
– 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 China Unicom Hong Kong.
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.