Hopson Development (754) SWOT Analysis / TOWS Matrix / MBA Resources
Construction Services
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Hopson Development (Hong Kong)
Based on various researches at Oak Spring University , Hopson Development is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, increasing household debt because of falling income levels, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption,
talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Hopson Development
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Hopson Development can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hopson Development, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hopson 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 Hopson Development can be done for the following purposes –
1. Strategic planning of Hopson Development
2. Improving business portfolio management of Hopson Development
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Construction Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hopson Development
Strengths of Hopson Development | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hopson Development are -
Learning organization
- Hopson 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 Hopson Development is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Hopson Development emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Hopson Development is present in almost all the verticals within the Construction Services industry. This has provided Hopson Development 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.
High switching costs
– The high switching costs that Hopson 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
– Hopson Development has one of the best training and development program in Capital Goods 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.
Digital Transformation in Construction Services industry
- digital transformation varies from industry to industry. For Hopson Development digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hopson Development 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.
Low bargaining power of suppliers
– Suppliers of Hopson Development in the Capital Goods sector have low bargaining power. Hopson Development has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hopson Development to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Hopson 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.
High brand equity
– Hopson Development has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hopson Development to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Hopson Development
– The covid-19 pandemic has put organizational resilience at the centre of everthing Hopson Development does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Construction Services
– Hopson Development is one of the leading players in the Construction Services industry in Hong Kong. Over the years it has not only transformed the business landscape in the Construction Services industry in Hong Kong but also across the existing markets. The ability to lead change has enabled Hopson Development in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Ability to recruit top talent
– Hopson Development is one of the leading players in the Construction 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.
Highly skilled collaborators
– Hopson Development has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Construction Services industry. Secondly the value chain collaborators of Hopson Development have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses of Hopson Development | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Hopson Development are -
Ability to respond to the competition
– As the decision making is very deliberative at Hopson Development, in the dynamic environment of Construction Services industry it has struggled to respond to the nimble upstart competition. Hopson Development has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Low market penetration in new markets
– Outside its home market of Hong Kong, Hopson Development needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the Construction Services industry, Hopson Development 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.
No frontier risks strategy
– From the 10K / annual statement of Hopson Development, it seems that company is thinking out the frontier risks that can impact Construction Services industry. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Aligning sales with marketing
– From the outside it seems that Hopson Development needs to have more collaboration between its sales team and marketing team. Sales professionals in the Construction Services industry have deep experience in developing customer relationships. Marketing department at Hopson Development can leverage the sales team experience to cultivate customer relationships as Hopson Development is planning to shift buying processes online.
High dependence on Hopson Development ‘s star products
– The top 2 products and services of Hopson Development still accounts for major business revenue. This dependence on star products in Construction Services industry has resulted into insufficient focus on developing new products, even though Hopson Development has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Hopson Development 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 Construction Services industry using digital technology.
Increasing silos among functional specialists
– The organizational structure of Hopson Development is dominated by functional specialists. It is not different from other players in the Construction Services industry, but Hopson Development needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hopson Development to focus more on services in the Construction Services industry rather than just following the product oriented approach.
Products dominated business model
– Even though Hopson Development has some of the most successful models in the Construction Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Hopson Development should strive to include more intangible value offerings along with its core products and services.
Slow decision making process
– As mentioned earlier in the report, Hopson 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 Construction Services industry over the last five years. Hopson 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.
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 Hopson Development supply chain. Even after few cautionary changes, Hopson Development is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hopson Development vulnerable to further global disruptions in South East Asia.
Hopson Development Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Hopson Development are -
Use of Bitcoin and other crypto currencies for transactions in Construction Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Hopson Development in the Construction Services industry. Now Hopson Development can target international markets with far fewer capital restrictions requirements than the existing system.
Building a culture of innovation
– managers at Hopson 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 Construction Services industry.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hopson 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.
Learning at scale
– Online learning technologies has now opened space for Hopson 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hopson Development in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Construction Services industry, and it will provide faster access to the consumers.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Construction Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Hopson 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. Hopson 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hopson Development can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Construction Services industry, but it has also influenced the consumer preferences. Hopson Development can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Hopson Development can use the latest technology developments to improve its manufacturing and designing process in Construction 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.
Leveraging digital technologies
– Hopson Development 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. Hopson Development can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hopson Development can use these opportunities to build new business models that can help the communities that Hopson Development operates in. Secondly it can use opportunities from government spending in Construction Services sector.
Creating value in data economy
– The success of analytics program of Hopson Development has opened avenues for new revenue streams for the organization in Construction Services industry. This can help Hopson Development to build a more holistic ecosystem for Hopson Development products in the Construction Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Threats Hopson Development External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Hopson Development are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hopson Development in Construction Services industry. The Construction 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
– Hopson Development has witnessed rapid integration of technology during Covid-19 in the Construction Services industry. As one of the leading players in the industry, Hopson Development needs to keep up with the evolution of technology in the Construction 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Hopson Development may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Construction 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. Hopson Development needs to understand the core reasons impacting the Construction Services industry. This will help it in building a better workplace.
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 Hopson Development in the Construction Services sector and impact the bottomline 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 Hopson Development business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Hopson Development 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 Construction Services industry.
Easy access to finance
– Easy access to finance in Construction Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Hopson Development can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Hopson 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.
Increasing wage structure of Hopson 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 Hopson Development.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hopson 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 Hopson Development prominent markets.
Environmental challenges
– Hopson 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. Hopson Development can take advantage of this fund but it will also bring new competitors in the Construction Services industry.
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 Hopson Development.
Weighted SWOT Analysis of Hopson Development Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Hopson 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 Hopson 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 Hopson 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 Hopson 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 Hopson Development needs to make to build a sustainable competitive advantage.