BAIOO Family Interactive Ltd (2100) SWOT Analysis / TOWS Matrix / MBA Resources
Computer Services
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for BAIOO Family Interactive Ltd (Hong Kong)
Based on various researches at Oak Spring University , BAIOO Family Interactive Ltd is operating in a macro-environment that has been destablized by – increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, increasing transportation and logistics costs, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, increasing inequality as vast percentage of new income is going to the top 1%, competitive advantages are harder to sustain because of technology dispersion,
customer relationship management is fast transforming because of increasing concerns over data privacy, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of BAIOO Family Interactive Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that BAIOO Family Interactive Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the BAIOO Family Interactive Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which BAIOO Family Interactive Ltd 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 BAIOO Family Interactive Ltd can be done for the following purposes –
1. Strategic planning of BAIOO Family Interactive Ltd
2. Improving business portfolio management of BAIOO Family Interactive Ltd
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Computer Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of BAIOO Family Interactive Ltd
Strengths of BAIOO Family Interactive Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of BAIOO Family Interactive Ltd are -
Highly skilled collaborators
– BAIOO Family Interactive Ltd has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Computer Services industry. Secondly the value chain collaborators of BAIOO Family Interactive Ltd have helped the firm to develop new products and bring them quickly to the marketplace.
Strong track record of project management in the Computer Services industry
– BAIOO Family Interactive Ltd is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that BAIOO Family Interactive Ltd 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.
Successful track record of launching new products
– BAIOO Family Interactive Ltd has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. BAIOO Family Interactive Ltd 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.
Training and development
– BAIOO Family Interactive Ltd has one of the best training and development program in Technology industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Analytics focus
– BAIOO Family Interactive Ltd 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 Computer Services 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.
Sustainable margins compare to other players in Computer Services industry
– BAIOO Family Interactive Ltd has clearly differentiated products in the market place. This has enabled BAIOO Family Interactive Ltd to fetch slight price premium compare to the competitors in the Computer Services industry. The sustainable margins have also helped BAIOO Family Interactive Ltd to invest into research and development (R&D) and innovation.
Organizational Resilience of BAIOO Family Interactive Ltd
– The covid-19 pandemic has put organizational resilience at the centre of everthing BAIOO Family Interactive Ltd does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Computer Services industry
- digital transformation varies from industry to industry. For BAIOO Family Interactive Ltd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. BAIOO Family Interactive Ltd 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.
Effective Research and Development (R&D)
– BAIOO Family Interactive Ltd has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – BAIOO Family Interactive Ltd staying ahead in the Computer Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of BAIOO Family Interactive Ltd in the Technology sector have low bargaining power. BAIOO Family Interactive Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps BAIOO Family Interactive Ltd to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy of BAIOO Family Interactive Ltd comprises – understanding the underlying the factors in the Computer 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 BAIOO Family Interactive Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of BAIOO Family Interactive Ltd are -
No frontier risks strategy
– From the 10K / annual statement of BAIOO Family Interactive Ltd, it seems that company is thinking out the frontier risks that can impact Computer 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.
Compensation and incentives
– The revenue per employee of BAIOO Family Interactive Ltd is just above the Computer 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.
Aligning sales with marketing
– From the outside it seems that BAIOO Family Interactive Ltd needs to have more collaboration between its sales team and marketing team. Sales professionals in the Computer Services industry have deep experience in developing customer relationships. Marketing department at BAIOO Family Interactive Ltd can leverage the sales team experience to cultivate customer relationships as BAIOO Family Interactive Ltd is planning to shift buying processes online.
Slow to strategic competitive environment developments
– As BAIOO Family Interactive Ltd is one of the leading players in the Computer Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Computer Services industry in last five years.
Low market penetration in new markets
– Outside its home market of Hong Kong, BAIOO Family Interactive Ltd needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative at BAIOO Family Interactive Ltd, in the dynamic environment of Computer Services industry it has struggled to respond to the nimble upstart competition. BAIOO Family Interactive Ltd has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though BAIOO Family Interactive Ltd has some of the most successful models in the Computer Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. BAIOO Family Interactive Ltd should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of BAIOO Family Interactive Ltd is dominated by functional specialists. It is not different from other players in the Computer Services industry, but BAIOO Family Interactive Ltd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help BAIOO Family Interactive Ltd to focus more on services in the Computer Services industry rather than just following the product oriented approach.
Interest costs
– Compare to the competition, BAIOO Family Interactive Ltd 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.
Slow decision making process
– As mentioned earlier in the report, BAIOO Family Interactive Ltd has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Computer Services industry over the last five years. BAIOO Family Interactive Ltd 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.
Employees’ less understanding of BAIOO Family Interactive Ltd strategy
– From the outside it seems that the employees of BAIOO Family Interactive Ltd 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.
BAIOO Family Interactive Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of BAIOO Family Interactive Ltd are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, BAIOO Family Interactive Ltd can use these opportunities to build new business models that can help the communities that BAIOO Family Interactive Ltd operates in. Secondly it can use opportunities from government spending in Computer Services sector.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Computer Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. BAIOO Family Interactive Ltd 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. BAIOO Family Interactive Ltd 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for BAIOO Family Interactive Ltd in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Computer Services industry, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– BAIOO Family Interactive Ltd has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Computer Services sector. This continuous investment in analytics has enabled BAIOO Family Interactive Ltd to build a competitive advantage using analytics. The analytics driven competitive advantage can help BAIOO Family Interactive Ltd to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, BAIOO Family Interactive Ltd 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.
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 BAIOO Family Interactive Ltd 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.
Developing new processes and practices
– BAIOO Family Interactive Ltd can develop new processes and procedures in Computer Services 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for BAIOO Family Interactive Ltd 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 BAIOO Family Interactive Ltd to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for BAIOO Family Interactive Ltd 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects BAIOO Family Interactive Ltd can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at BAIOO Family Interactive Ltd 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 Computer Services industry.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Computer Services industry, but it has also influenced the consumer preferences. BAIOO Family Interactive Ltd can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– BAIOO Family Interactive Ltd 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.
Threats BAIOO Family Interactive Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of BAIOO Family Interactive Ltd are -
Stagnating economy with rate increase
– BAIOO Family Interactive Ltd 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 Computer Services industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, BAIOO Family Interactive Ltd 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 BAIOO Family Interactive Ltd prominent markets.
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 BAIOO Family Interactive Ltd business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– BAIOO Family Interactive Ltd 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 Computer Services industry regulations.
Technology acceleration in Forth Industrial Revolution
– BAIOO Family Interactive Ltd has witnessed rapid integration of technology during Covid-19 in the Computer Services industry. As one of the leading players in the industry, BAIOO Family Interactive Ltd needs to keep up with the evolution of technology in the Computer 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.
Consumer confidence and its impact on BAIOO Family Interactive Ltd 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 Computer Services industry and other sectors.
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.
Increasing wage structure of BAIOO Family Interactive Ltd
– 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 BAIOO Family Interactive Ltd.
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. BAIOO Family Interactive Ltd needs to understand the core reasons impacting the Computer Services industry. This will help it in building a better workplace.
High dependence on third party suppliers
– BAIOO Family Interactive Ltd 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.
Shortening product life cycle
– it is one of the major threat that BAIOO Family Interactive Ltd is facing in Computer Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 BAIOO Family Interactive Ltd in the Computer Services sector and impact the bottomline of the organization.
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 BAIOO Family Interactive Ltd.
Weighted SWOT Analysis of BAIOO Family Interactive Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at BAIOO Family Interactive Ltd 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 BAIOO Family Interactive Ltd 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 BAIOO Family Interactive Ltd 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 BAIOO Family Interactive Ltd 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 BAIOO Family Interactive Ltd needs to make to build a sustainable competitive advantage.