Melco Int Development (200) SWOT Analysis / TOWS Matrix / MBA Resources
Casinos & Gaming
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Melco Int Development (Hong Kong)
Based on various researches at Oak Spring University , Melco Int Development is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%, wage bills are increasing, there is increasing trade war between United States & China, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, talent flight as more people leaving formal jobs,
there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Melco Int Development
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Melco Int Development can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Melco Int Development, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Melco Int Development 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 Melco Int Development can be done for the following purposes –
1. Strategic planning of Melco Int Development
2. Improving business portfolio management of Melco Int Development
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Casinos & Gaming sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Melco Int Development
Strengths of Melco Int Development | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Melco Int Development are -
Organizational Resilience of Melco Int Development
– The covid-19 pandemic has put organizational resilience at the centre of everthing Melco Int Development does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Melco Int Development 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 Melco Int Development is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Melco Int Development emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Melco Int Development in the Services sector have low bargaining power. Melco Int Development has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Melco Int Development to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Melco Int Development has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Melco Int Development to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Melco Int Development 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.
Highly skilled collaborators
– Melco Int Development has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Casinos & Gaming industry. Secondly the value chain collaborators of Melco Int Development have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management in the Casinos & Gaming industry
– Melco Int Development is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy of Melco Int Development comprises – understanding the underlying the factors in the Casinos & Gaming 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.
Sustainable margins compare to other players in Casinos & Gaming industry
– Melco Int Development has clearly differentiated products in the market place. This has enabled Melco Int Development to fetch slight price premium compare to the competitors in the Casinos & Gaming industry. The sustainable margins have also helped Melco Int Development to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Melco Int Development 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.
Training and development
– Melco Int Development 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.
Effective Research and Development (R&D)
– Melco Int Development has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Melco Int Development staying ahead in the Casinos & Gaming industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses of Melco Int Development | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Melco Int Development are -
Slow decision making process
– As mentioned earlier in the report, Melco Int Development has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Casinos & Gaming industry over the last five years. Melco Int Development even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
No frontier risks strategy
– From the 10K / annual statement of Melco Int Development, it seems that company is thinking out the frontier risks that can impact Casinos & Gaming 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.
Lack of clear differentiation of Melco Int Development products
– To increase the profitability and margins on the products, Melco Int Development needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative at Melco Int Development, in the dynamic environment of Casinos & Gaming industry it has struggled to respond to the nimble upstart competition. Melco Int Development has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on Melco Int Development ‘s star products
– The top 2 products and services of Melco Int Development still accounts for major business revenue. This dependence on star products in Casinos & Gaming industry has resulted into insufficient focus on developing new products, even though Melco Int Development has relatively successful track record of launching new products.
Interest costs
– Compare to the competition, Melco Int Development 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.
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 Melco Int Development supply chain. Even after few cautionary changes, Melco Int Development is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Melco Int Development vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, Melco Int Development has high operating costs in the Casinos & Gaming industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Melco Int Development lucrative customers.
Aligning sales with marketing
– From the outside it seems that Melco Int Development needs to have more collaboration between its sales team and marketing team. Sales professionals in the Casinos & Gaming industry have deep experience in developing customer relationships. Marketing department at Melco Int Development can leverage the sales team experience to cultivate customer relationships as Melco Int Development is planning to shift buying processes online.
Skills based hiring in Casinos & Gaming industry
– The stress on hiring functional specialists at Melco Int Development has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Need for greater diversity
– Melco Int Development 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.
Melco Int Development Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Melco Int Development 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. Melco Int Development can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Melco Int Development 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.
Creating value in data economy
– The success of analytics program of Melco Int Development has opened avenues for new revenue streams for the organization in Casinos & Gaming industry. This can help Melco Int Development to build a more holistic ecosystem for Melco Int Development products in the Casinos & Gaming industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Casinos & Gaming industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Melco Int Development 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. Melco Int Development 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Casinos & Gaming industry, but it has also influenced the consumer preferences. Melco Int Development can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Melco Int Development has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Casinos & Gaming sector. This continuous investment in analytics has enabled Melco Int Development to build a competitive advantage using analytics. The analytics driven competitive advantage can help Melco Int Development 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 Melco Int Development to increase its market reach. Melco Int Development 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Melco Int Development is facing challenges because of the dominance of functional experts in the organization. Melco Int Development can utilize new technology in the field of Casinos & Gaming industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Melco Int Development 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.
Buying journey improvements
– Melco Int Development can improve the customer journey of consumers in the Casinos & Gaming 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Melco Int Development 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 Melco Int Development to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Melco Int Development 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.
Building a culture of innovation
– managers at Melco Int Development 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 Casinos & Gaming industry.
Threats Melco Int Development External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Melco Int Development are -
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 Melco Int Development.
Easy access to finance
– Easy access to finance in Casinos & Gaming industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Melco Int Development can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Melco Int Development 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 Casinos & Gaming industry and other sectors.
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.
Environmental challenges
– Melco Int Development 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. Melco Int Development can take advantage of this fund but it will also bring new competitors in the Casinos & Gaming industry.
High dependence on third party suppliers
– Melco Int Development 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.
Regulatory challenges
– Melco Int Development 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 Casinos & Gaming industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Casinos & Gaming industry are lowering. It can presents Melco Int Development with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Casinos & Gaming sector.
Technology acceleration in Forth Industrial Revolution
– Melco Int Development has witnessed rapid integration of technology during Covid-19 in the Casinos & Gaming industry. As one of the leading players in the industry, Melco Int Development needs to keep up with the evolution of technology in the Casinos & Gaming 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.
Increasing wage structure of Melco Int Development
– 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 Melco Int Development.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Melco Int Development in Casinos & Gaming industry. The Casinos & Gaming 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.
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. Melco Int Development 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Melco Int Development 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 Melco Int Development prominent markets.
Weighted SWOT Analysis of Melco Int Development Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Melco Int Development 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 Melco Int Development 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 Melco Int Development 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 Melco Int Development 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 Melco Int Development needs to make to build a sustainable competitive advantage.
