SWOT Analysis / TOWS Matrix for SmarTone Telecom (Hong Kong)
Based on various researches at Oak Spring University , SmarTone Telecom is operating in a macro-environment that has been destablized by – banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, increasing energy prices, central banks are concerned over increasing inflation, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models,
increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that SmarTone Telecom can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the SmarTone Telecom, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which SmarTone Telecom 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 SmarTone Telecom can be done for the following purposes –
1. Strategic planning of SmarTone Telecom
2. Improving business portfolio management of SmarTone Telecom
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Communications Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of SmarTone Telecom
Strengths of SmarTone Telecom | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of SmarTone Telecom are -
Ability to recruit top talent
– SmarTone Telecom is one of the leading players in the Communications 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.
Organizational Resilience of SmarTone Telecom
– The covid-19 pandemic has put organizational resilience at the centre of everthing SmarTone Telecom does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– SmarTone Telecom has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled SmarTone Telecom to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Communications Services industry
– SmarTone Telecom has clearly differentiated products in the market place. This has enabled SmarTone Telecom to fetch slight price premium compare to the competitors in the Communications Services industry. The sustainable margins have also helped SmarTone Telecom to invest into research and development (R&D) and innovation.
Ability to lead change in Communications Services
– SmarTone Telecom is one of the leading players in the Communications Services industry in Hong Kong. Over the years it has not only transformed the business landscape in the Communications Services industry in Hong Kong but also across the existing markets. The ability to lead change has enabled SmarTone Telecom in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Successful track record of launching new products
– SmarTone Telecom has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. SmarTone Telecom 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.
Digital Transformation in Communications Services industry
- digital transformation varies from industry to industry. For SmarTone Telecom digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. SmarTone Telecom 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.
Learning organization
- SmarTone Telecom 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 SmarTone Telecom is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at SmarTone Telecom emphasize – knowledge, initiative, and innovation.
Training and development
– SmarTone Telecom 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.
Cross disciplinary teams
– Horizontal connected teams at the SmarTone Telecom 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.
Diverse revenue streams
– SmarTone Telecom is present in almost all the verticals within the Communications Services industry. This has provided SmarTone Telecom 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.
Operational resilience
– The operational resilience strategy of SmarTone Telecom comprises – understanding the underlying the factors in the Communications Services industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Weaknesses of SmarTone Telecom | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of SmarTone Telecom are -
Increasing silos among functional specialists
– The organizational structure of SmarTone Telecom is dominated by functional specialists. It is not different from other players in the Communications Services industry, but SmarTone Telecom needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help SmarTone Telecom to focus more on services in the Communications Services industry rather than just following the product oriented approach.
Products dominated business model
– Even though SmarTone Telecom has some of the most successful models in the Communications Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. SmarTone Telecom should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– From the outside it seems that SmarTone Telecom needs to have more collaboration between its sales team and marketing team. Sales professionals in the Communications Services industry have deep experience in developing customer relationships. Marketing department at SmarTone Telecom can leverage the sales team experience to cultivate customer relationships as SmarTone Telecom is planning to shift buying processes online.
Interest costs
– Compare to the competition, SmarTone Telecom 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.
Compensation and incentives
– The revenue per employee of SmarTone Telecom is just above the Communications Services 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 SmarTone Telecom products
– To increase the profitability and margins on the products, SmarTone Telecom needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, SmarTone Telecom 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 Communications Services industry using digital technology.
Slow to strategic competitive environment developments
– As SmarTone Telecom is one of the leading players in the Communications Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Communications Services industry in last five years.
Employees’ less understanding of SmarTone Telecom strategy
– From the outside it seems that the employees of SmarTone Telecom 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.
Workers concerns about automation
– As automation is fast increasing in the Communications Services industry, SmarTone Telecom needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High 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 SmarTone Telecom supply chain. Even after few cautionary changes, SmarTone Telecom is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left SmarTone Telecom vulnerable to further global disruptions in South East Asia.
SmarTone Telecom Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of SmarTone Telecom are -
Creating value in data economy
– The success of analytics program of SmarTone Telecom has opened avenues for new revenue streams for the organization in Communications Services industry. This can help SmarTone Telecom to build a more holistic ecosystem for SmarTone Telecom products in the Communications Services 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 SmarTone Telecom can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help SmarTone Telecom to increase its market reach. SmarTone Telecom 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.
Using analytics as competitive advantage
– SmarTone Telecom has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Communications Services sector. This continuous investment in analytics has enabled SmarTone Telecom to build a competitive advantage using analytics. The analytics driven competitive advantage can help SmarTone Telecom to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Use of Bitcoin and other crypto currencies for transactions in Communications Services industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for SmarTone Telecom in the Communications Services industry. Now SmarTone Telecom can target international markets with far fewer capital restrictions requirements than the existing system.
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. SmarTone Telecom can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Redefining models of collaboration and team work
– As explained in the weaknesses section, SmarTone Telecom is facing challenges because of the dominance of functional experts in the organization. SmarTone Telecom can utilize new technology in the field of Communications Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Communications Services industry, but it has also influenced the consumer preferences. SmarTone Telecom 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
– SmarTone Telecom can use the latest technology developments to improve its manufacturing and designing process in Communications 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.
Buying journey improvements
– SmarTone Telecom can improve the customer journey of consumers in the Communications Services industry by using analytics and artificial intelligence. It can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, SmarTone Telecom can use these opportunities to build new business models that can help the communities that SmarTone Telecom operates in. Secondly it can use opportunities from government spending in Communications Services sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for SmarTone Telecom in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Communications Services industry, and it will provide faster access to the consumers.
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 SmarTone Telecom 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.
Threats SmarTone Telecom External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of SmarTone Telecom are -
Shortening product life cycle
– it is one of the major threat that SmarTone Telecom is facing in Communications Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– SmarTone Telecom has witnessed rapid integration of technology during Covid-19 in the Communications Services industry. As one of the leading players in the industry, SmarTone Telecom needs to keep up with the evolution of technology in the Communications 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.
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 SmarTone Telecom in the Communications Services sector and impact the bottomline of the organization.
Environmental challenges
– SmarTone Telecom 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. SmarTone Telecom can take advantage of this fund but it will also bring new competitors in the Communications Services industry.
Stagnating economy with rate increase
– SmarTone Telecom 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 Communications Services industry.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, SmarTone Telecom may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Communications Services sector.
Consumer confidence and its impact on SmarTone Telecom 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 Communications Services industry and other sectors.
Regulatory challenges
– SmarTone Telecom 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 Communications Services industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, SmarTone Telecom 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 SmarTone Telecom prominent markets.
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 SmarTone Telecom.
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.
Easy access to finance
– Easy access to finance in Communications Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. SmarTone Telecom can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of SmarTone Telecom
– 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 SmarTone Telecom.
Weighted SWOT Analysis of SmarTone Telecom Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at SmarTone Telecom 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 SmarTone Telecom 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 SmarTone Telecom 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 SmarTone Telecom 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 SmarTone Telecom needs to make to build a sustainable competitive advantage.
