China Galaxy Securities (6881) SWOT Analysis / TOWS Matrix / MBA Resources
Investment Services
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for China Galaxy Securities (Hong Kong)
Based on various researches at Oak Spring University , China Galaxy Securities is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, increasing energy prices, digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, there is increasing trade war between United States & China, increasing transportation and logistics costs,
there is backlash against globalization, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of China Galaxy Securities
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that China Galaxy Securities can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the China Galaxy Securities, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which China Galaxy Securities 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 Galaxy Securities can be done for the following purposes –
1. Strategic planning of China Galaxy Securities
2. Improving business portfolio management of China Galaxy Securities
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Investment Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of China Galaxy Securities
Strengths of China Galaxy Securities | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of China Galaxy Securities are -
Highly skilled collaborators
– China Galaxy Securities has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Investment Services industry. Secondly the value chain collaborators of China Galaxy Securities have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– China Galaxy Securities has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled China Galaxy Securities to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– China Galaxy Securities is one of the most innovative firm in Investment Services sector.
Ability to lead change in Investment Services
– China Galaxy Securities is one of the leading players in the Investment Services industry in Hong Kong. Over the years it has not only transformed the business landscape in the Investment Services industry in Hong Kong but also across the existing markets. The ability to lead change has enabled China Galaxy Securities in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– China Galaxy Securities is present in almost all the verticals within the Investment Services industry. This has provided China Galaxy Securities 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 Galaxy Securities is one of the leading players in the Investment 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.
Operational resilience
– The operational resilience strategy of China Galaxy Securities comprises – understanding the underlying the factors in the Investment Services 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.
Organizational Resilience of China Galaxy Securities
– The covid-19 pandemic has put organizational resilience at the centre of everthing China Galaxy Securities does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of China Galaxy Securities in Investment Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that China Galaxy Securities 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.
Sustainable margins compare to other players in Investment Services industry
– China Galaxy Securities has clearly differentiated products in the market place. This has enabled China Galaxy Securities to fetch slight price premium compare to the competitors in the Investment Services industry. The sustainable margins have also helped China Galaxy Securities to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– China Galaxy Securities has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – China Galaxy Securities staying ahead in the Investment Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses of China Galaxy Securities | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of China Galaxy Securities are -
High cash cycle compare to competitors
China Galaxy Securities has a high cash cycle compare to other players in the Investment 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.
Increasing silos among functional specialists
– The organizational structure of China Galaxy Securities is dominated by functional specialists. It is not different from other players in the Investment Services industry, but China Galaxy Securities needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help China Galaxy Securities to focus more on services in the Investment Services industry rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As China Galaxy Securities is one of the leading players in the Investment Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Investment Services industry in last five years.
Interest costs
– Compare to the competition, China Galaxy Securities 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.
Capital Spending Reduction
– Even during the low interest decade, China Galaxy Securities 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 Investment Services industry using digital technology.
Products dominated business model
– Even though China Galaxy Securities has some of the most successful models in the Investment Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. China Galaxy Securities should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, China Galaxy Securities has high operating costs in the Investment Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract China Galaxy Securities lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the Investment Services industry, China Galaxy Securities 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.
High bargaining power of channel partners in Investment Services industry
– because of the regulatory requirements in Hong Kong, China Galaxy Securities 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 Investment Services industry.
Low market penetration in new markets
– Outside its home market of Hong Kong, China Galaxy Securities needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on China Galaxy Securities ‘s star products
– The top 2 products and services of China Galaxy Securities still accounts for major business revenue. This dependence on star products in Investment Services industry has resulted into insufficient focus on developing new products, even though China Galaxy Securities has relatively successful track record of launching new products.
China Galaxy Securities Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of China Galaxy Securities are -
Buying journey improvements
– China Galaxy Securities can improve the customer journey of consumers in the Investment 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects China Galaxy Securities can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– China Galaxy Securities 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.
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 Galaxy Securities can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of China Galaxy Securities has opened avenues for new revenue streams for the organization in Investment Services industry. This can help China Galaxy Securities to build a more holistic ecosystem for China Galaxy Securities products in the Investment Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– China Galaxy Securities can develop new processes and procedures in Investment 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Investment Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. China Galaxy Securities 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. China Galaxy Securities 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, China Galaxy Securities 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.
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 China Galaxy Securities 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.
Building a culture of innovation
– managers at China Galaxy Securities 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 Investment Services industry.
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 Galaxy Securities can use these opportunities to build new business models that can help the communities that China Galaxy Securities operates in. Secondly it can use opportunities from government spending in Investment Services sector.
Using analytics as competitive advantage
– China Galaxy Securities has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Investment Services sector. This continuous investment in analytics has enabled China Galaxy Securities to build a competitive advantage using analytics. The analytics driven competitive advantage can help China Galaxy Securities to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– China Galaxy Securities can use the latest technology developments to improve its manufacturing and designing process in Investment 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.
Threats China Galaxy Securities External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of China Galaxy Securities are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for China Galaxy Securities in Investment Services industry. The Investment 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.
Technology acceleration in Forth Industrial Revolution
– China Galaxy Securities has witnessed rapid integration of technology during Covid-19 in the Investment Services industry. As one of the leading players in the industry, China Galaxy Securities needs to keep up with the evolution of technology in the Investment 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.
Shortening product life cycle
– it is one of the major threat that China Galaxy Securities is facing in Investment Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of China Galaxy Securities
– 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 Galaxy Securities.
Regulatory challenges
– China Galaxy Securities 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 Investment Services industry regulations.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of China Galaxy Securities business can come under increasing regulations regarding data privacy, data security, etc.
Easy access to finance
– Easy access to finance in Investment Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. China Galaxy Securities can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– China Galaxy Securities 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 Galaxy Securities can take advantage of this fund but it will also bring new competitors in the Investment Services industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Investment Services industry are lowering. It can presents China Galaxy Securities with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Investment 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.
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 Galaxy Securities.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, China Galaxy Securities may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Investment Services sector.
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 Galaxy Securities needs to understand the core reasons impacting the Investment Services industry. This will help it in building a better workplace.
Weighted SWOT Analysis of China Galaxy Securities Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at China Galaxy Securities 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 Galaxy Securities 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 Galaxy Securities 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 Galaxy Securities 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 Galaxy Securities needs to make to build a sustainable competitive advantage.