Chong Hing Bank (1111) SWOT Analysis / TOWS Matrix / MBA Resources
Money Center Banks
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Chong Hing Bank (Hong Kong)
Based on various researches at Oak Spring University , Chong Hing Bank is operating in a macro-environment that has been destablized by – geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, increasing commodity prices, increasing energy prices,
cloud computing is disrupting traditional business models, wage bills are increasing, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Chong Hing Bank can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Chong Hing Bank, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Chong Hing Bank 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 Chong Hing Bank can be done for the following purposes –
1. Strategic planning of Chong Hing Bank
2. Improving business portfolio management of Chong Hing Bank
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Money Center Banks sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Chong Hing Bank
Strengths of Chong Hing Bank | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Chong Hing Bank are -
Digital Transformation in Money Center Banks industry
- digital transformation varies from industry to industry. For Chong Hing Bank digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Chong Hing Bank 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.
Highly skilled collaborators
– Chong Hing Bank has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Money Center Banks industry. Secondly the value chain collaborators of Chong Hing Bank have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Chong Hing Bank in the Financial sector have low bargaining power. Chong Hing Bank has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Chong Hing Bank to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Chong Hing Bank is one of the leading players in the Money Center Banks 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.
Ability to lead change in Money Center Banks
– Chong Hing Bank is one of the leading players in the Money Center Banks industry in Hong Kong. Over the years it has not only transformed the business landscape in the Money Center Banks industry in Hong Kong but also across the existing markets. The ability to lead change has enabled Chong Hing Bank 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)
– Chong Hing Bank has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Chong Hing Bank staying ahead in the Money Center Banks industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Training and development
– Chong Hing Bank has one of the best training and development program in Financial 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
– Chong Hing Bank is one of the most innovative firm in Money Center Banks sector.
Superior customer experience
– The customer experience strategy of Chong Hing Bank in Money Center Banks industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Analytics focus
– Chong Hing Bank is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the Money Center Banks industry. The technology infrastructure of Hong Kong is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Successful track record of launching new products
– Chong Hing Bank has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Chong Hing Bank 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.
Sustainable margins compare to other players in Money Center Banks industry
– Chong Hing Bank has clearly differentiated products in the market place. This has enabled Chong Hing Bank to fetch slight price premium compare to the competitors in the Money Center Banks industry. The sustainable margins have also helped Chong Hing Bank to invest into research and development (R&D) and innovation.
Weaknesses of Chong Hing Bank | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Chong Hing Bank are -
High operating costs
– Compare to the competitors, Chong Hing Bank has high operating costs in the Money Center Banks industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Chong Hing Bank lucrative customers.
Skills based hiring in Money Center Banks industry
– The stress on hiring functional specialists at Chong Hing Bank 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.
Compensation and incentives
– The revenue per employee of Chong Hing Bank is just above the Money Center Banks 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.
High dependence on Chong Hing Bank ‘s star products
– The top 2 products and services of Chong Hing Bank still accounts for major business revenue. This dependence on star products in Money Center Banks industry has resulted into insufficient focus on developing new products, even though Chong Hing Bank has relatively successful track record of launching new products.
Capital Spending Reduction
– Even during the low interest decade, Chong Hing Bank 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 Money Center Banks industry using digital technology.
Need for greater diversity
– Chong Hing Bank 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.
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 Chong Hing Bank supply chain. Even after few cautionary changes, Chong Hing Bank is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Chong Hing Bank vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Chong Hing Bank is dominated by functional specialists. It is not different from other players in the Money Center Banks industry, but Chong Hing Bank needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Chong Hing Bank to focus more on services in the Money Center Banks industry rather than just following the product oriented approach.
Aligning sales with marketing
– From the outside it seems that Chong Hing Bank needs to have more collaboration between its sales team and marketing team. Sales professionals in the Money Center Banks industry have deep experience in developing customer relationships. Marketing department at Chong Hing Bank can leverage the sales team experience to cultivate customer relationships as Chong Hing Bank is planning to shift buying processes online.
Employees’ less understanding of Chong Hing Bank strategy
– From the outside it seems that the employees of Chong Hing Bank 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.
Low market penetration in new markets
– Outside its home market of Hong Kong, Chong Hing Bank needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Chong Hing Bank Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Chong Hing Bank are -
Creating value in data economy
– The success of analytics program of Chong Hing Bank has opened avenues for new revenue streams for the organization in Money Center Banks industry. This can help Chong Hing Bank to build a more holistic ecosystem for Chong Hing Bank products in the Money Center Banks industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Chong Hing Bank can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Chong Hing Bank has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Money Center Banks sector. This continuous investment in analytics has enabled Chong Hing Bank to build a competitive advantage using analytics. The analytics driven competitive advantage can help Chong Hing Bank to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Chong Hing Bank can use the latest technology developments to improve its manufacturing and designing process in Money Center Banks 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Chong Hing Bank 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 Chong Hing Bank to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Chong Hing Bank 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Chong Hing Bank to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Chong Hing Bank to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Chong Hing Bank 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.
Developing new processes and practices
– Chong Hing Bank can develop new processes and procedures in Money Center Banks 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 Money Center Banks industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Chong Hing Bank 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. Chong Hing Bank 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.
Use of Bitcoin and other crypto currencies for transactions in Money Center Banks industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Chong Hing Bank in the Money Center Banks industry. Now Chong Hing Bank can target international markets with far fewer capital restrictions requirements than the existing system.
Loyalty marketing
– Chong Hing Bank 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.
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. Chong Hing Bank can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Chong Hing Bank External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Chong Hing Bank are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Chong Hing Bank 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 Chong Hing Bank prominent markets.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Chong Hing Bank in Money Center Banks industry. The Money Center Banks 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.
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. Chong Hing Bank needs to understand the core reasons impacting the Money Center Banks industry. This will help it in building a better workplace.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Money Center Banks industry are lowering. It can presents Chong Hing Bank with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Money Center Banks sector.
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 Chong Hing Bank.
Stagnating economy with rate increase
– Chong Hing Bank 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 Money Center Banks industry.
Regulatory challenges
– Chong Hing Bank 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 Money Center Banks industry regulations.
Technology acceleration in Forth Industrial Revolution
– Chong Hing Bank has witnessed rapid integration of technology during Covid-19 in the Money Center Banks industry. As one of the leading players in the industry, Chong Hing Bank needs to keep up with the evolution of technology in the Money Center Banks 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.
Consumer confidence and its impact on Chong Hing Bank 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 Money Center Banks industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Chong Hing Bank may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Money Center Banks sector.
Increasing wage structure of Chong Hing Bank
– 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 Chong Hing Bank.
Easy access to finance
– Easy access to finance in Money Center Banks industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Chong Hing Bank can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Weighted SWOT Analysis of Chong Hing Bank Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Chong Hing Bank 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 Chong Hing Bank 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 Chong Hing Bank 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 Chong Hing Bank 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 Chong Hing Bank needs to make to build a sustainable competitive advantage.