SWOT Analysis / TOWS Matrix for Foxconn Interconnect (Hong Kong)
Based on various researches at Oak Spring University , Foxconn Interconnect is operating in a macro-environment that has been destablized by – technology disruption, central banks are concerned over increasing inflation, there is increasing trade war between United States & China, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy,
geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Foxconn Interconnect
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Foxconn Interconnect can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Foxconn Interconnect, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Foxconn Interconnect 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 Foxconn Interconnect can be done for the following purposes –
1. Strategic planning of Foxconn Interconnect
2. Improving business portfolio management of Foxconn Interconnect
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Electronic Instr. & Controls sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Foxconn Interconnect
Strengths of Foxconn Interconnect | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Foxconn Interconnect are -
Operational resilience
– The operational resilience strategy of Foxconn Interconnect comprises – understanding the underlying the factors in the Electronic Instr. & Controls 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.
Ability to recruit top talent
– Foxconn Interconnect is one of the leading players in the Electronic Instr. & Controls 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.
Diverse revenue streams
– Foxconn Interconnect is present in almost all the verticals within the Electronic Instr. & Controls industry. This has provided Foxconn Interconnect a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Digital Transformation in Electronic Instr. & Controls industry
- digital transformation varies from industry to industry. For Foxconn Interconnect digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Foxconn Interconnect 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.
Ability to lead change in Electronic Instr. & Controls
– Foxconn Interconnect is one of the leading players in the Electronic Instr. & Controls industry in Hong Kong. Over the years it has not only transformed the business landscape in the Electronic Instr. & Controls industry in Hong Kong but also across the existing markets. The ability to lead change has enabled Foxconn Interconnect in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Foxconn Interconnect has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Foxconn Interconnect staying ahead in the Electronic Instr. & Controls industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Foxconn Interconnect in the Technology sector have low bargaining power. Foxconn Interconnect has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Foxconn Interconnect to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management in the Electronic Instr. & Controls industry
– Foxconn Interconnect 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
– Foxconn Interconnect has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Foxconn Interconnect 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.
Organizational Resilience of Foxconn Interconnect
– The covid-19 pandemic has put organizational resilience at the centre of everthing Foxconn Interconnect does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Foxconn Interconnect has one of the best training and development program in Technology 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.
Innovation driven organization
– Foxconn Interconnect is one of the most innovative firm in Electronic Instr. & Controls sector.
Weaknesses of Foxconn Interconnect | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Foxconn Interconnect are -
Products dominated business model
– Even though Foxconn Interconnect has some of the most successful models in the Electronic Instr. & Controls industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Foxconn Interconnect should strive to include more intangible value offerings along with its core products and services.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Foxconn Interconnect is slow explore the new channels of communication. These new channels of communication can help Foxconn Interconnect to provide better information regarding Electronic Instr. & Controls products and services. It can also build an online community to further reach out to potential customers.
Employees’ less understanding of Foxconn Interconnect strategy
– From the outside it seems that the employees of Foxconn Interconnect 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.
Compensation and incentives
– The revenue per employee of Foxconn Interconnect is just above the Electronic Instr. & Controls 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.
Lack of clear differentiation of Foxconn Interconnect products
– To increase the profitability and margins on the products, Foxconn Interconnect needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on Foxconn Interconnect ‘s star products
– The top 2 products and services of Foxconn Interconnect still accounts for major business revenue. This dependence on star products in Electronic Instr. & Controls industry has resulted into insufficient focus on developing new products, even though Foxconn Interconnect has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Foxconn Interconnect is one of the leading players in the Electronic Instr. & Controls industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Electronic Instr. & Controls industry in last five years.
High operating costs
– Compare to the competitors, Foxconn Interconnect has high operating costs in the Electronic Instr. & Controls industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Foxconn Interconnect lucrative customers.
High bargaining power of channel partners in Electronic Instr. & Controls industry
– because of the regulatory requirements in Hong Kong, Foxconn Interconnect 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 Electronic Instr. & Controls industry.
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 Foxconn Interconnect supply chain. Even after few cautionary changes, Foxconn Interconnect is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Foxconn Interconnect vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative at Foxconn Interconnect, in the dynamic environment of Electronic Instr. & Controls industry it has struggled to respond to the nimble upstart competition. Foxconn Interconnect has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Foxconn Interconnect Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Foxconn Interconnect are -
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. Foxconn Interconnect can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Foxconn Interconnect has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Electronic Instr. & Controls sector. This continuous investment in analytics has enabled Foxconn Interconnect to build a competitive advantage using analytics. The analytics driven competitive advantage can help Foxconn Interconnect to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Foxconn Interconnect 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.
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 Foxconn Interconnect 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Foxconn Interconnect can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Foxconn Interconnect in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Electronic Instr. & Controls industry, and it will provide faster access to the consumers.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Electronic Instr. & Controls industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Foxconn Interconnect 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. Foxconn Interconnect 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.
Leveraging digital technologies
– Foxconn Interconnect 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Foxconn Interconnect can use these opportunities to build new business models that can help the communities that Foxconn Interconnect operates in. Secondly it can use opportunities from government spending in Electronic Instr. & Controls sector.
Creating value in data economy
– The success of analytics program of Foxconn Interconnect has opened avenues for new revenue streams for the organization in Electronic Instr. & Controls industry. This can help Foxconn Interconnect to build a more holistic ecosystem for Foxconn Interconnect products in the Electronic Instr. & Controls industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Foxconn Interconnect can develop new processes and procedures in Electronic Instr. & Controls 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 Electronic Instr. & Controls industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Foxconn Interconnect in the Electronic Instr. & Controls industry. Now Foxconn Interconnect can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Foxconn Interconnect to increase its market reach. Foxconn Interconnect 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.
Threats Foxconn Interconnect External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Foxconn Interconnect 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.
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 Foxconn Interconnect business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Foxconn Interconnect may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Electronic Instr. & Controls 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 Foxconn Interconnect in the Electronic Instr. & Controls sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in Electronic Instr. & Controls industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Foxconn Interconnect can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Foxconn Interconnect is facing in Electronic Instr. & Controls sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Foxconn Interconnect has witnessed rapid integration of technology during Covid-19 in the Electronic Instr. & Controls industry. As one of the leading players in the industry, Foxconn Interconnect needs to keep up with the evolution of technology in the Electronic Instr. & Controls 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.
Environmental challenges
– Foxconn Interconnect 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. Foxconn Interconnect can take advantage of this fund but it will also bring new competitors in the Electronic Instr. & Controls industry.
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. Foxconn Interconnect 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.
Regulatory challenges
– Foxconn Interconnect 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 Electronic Instr. & Controls industry regulations.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Foxconn Interconnect 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 Foxconn Interconnect prominent markets.
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. Foxconn Interconnect needs to understand the core reasons impacting the Electronic Instr. & Controls industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Foxconn Interconnect Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Foxconn Interconnect 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 Foxconn Interconnect 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 Foxconn Interconnect 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 Foxconn Interconnect 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 Foxconn Interconnect needs to make to build a sustainable competitive advantage.
