BAIOO Family Interactive Ltd (2100) SWOT Analysis / TOWS Matrix / 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 – challanges to central banks by blockchain based private currencies, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, geopolitical disruptions, technology disruption, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, wage bills are increasing, etc

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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.

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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

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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 -

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.

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.

Superior customer experience

– The customer experience strategy of BAIOO Family Interactive Ltd in Computer Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

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.

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.

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.

High brand equity

– BAIOO Family Interactive Ltd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled BAIOO Family Interactive Ltd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Innovation driven organization

– BAIOO Family Interactive Ltd is one of the most innovative firm in Computer Services sector.

Diverse revenue streams

– BAIOO Family Interactive Ltd is present in almost all the verticals within the Computer Services industry. This has provided BAIOO Family Interactive Ltd 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.

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.

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.

Learning organization

- BAIOO Family Interactive Ltd 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 BAIOO Family Interactive Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at BAIOO Family Interactive Ltd emphasize – knowledge, initiative, and innovation.

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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 -

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.

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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, BAIOO Family Interactive Ltd is slow explore the new channels of communication. These new channels of communication can help BAIOO Family Interactive Ltd to provide better information regarding Computer Services products and services. It can also build an online community to further reach out to potential customers.

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 BAIOO Family Interactive Ltd supply chain. Even after few cautionary changes, BAIOO Family Interactive Ltd is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left BAIOO Family Interactive Ltd vulnerable to further global disruptions in South East Asia.

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.

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.

Skills based hiring in Computer Services industry

– The stress on hiring functional specialists at BAIOO Family Interactive Ltd 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.

Lack of clear differentiation of BAIOO Family Interactive Ltd products

– To increase the profitability and margins on the products, BAIOO Family Interactive Ltd needs to provide more differentiated products than what it is currently offering in the marketplace.

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.

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.

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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 -

Creating value in data economy

– The success of analytics program of BAIOO Family Interactive Ltd has opened avenues for new revenue streams for the organization in Computer Services industry. This can help BAIOO Family Interactive Ltd to build a more holistic ecosystem for BAIOO Family Interactive Ltd products in the Computer Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.

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.

Manufacturing automation

– BAIOO Family Interactive Ltd can use the latest technology developments to improve its manufacturing and designing process in Computer 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.

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.

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.

Use of Bitcoin and other crypto currencies for transactions in Computer Services industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for BAIOO Family Interactive Ltd in the Computer Services industry. Now BAIOO Family Interactive Ltd can target international markets with far fewer capital restrictions requirements than the existing system.

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.

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.

Buying journey improvements

– BAIOO Family Interactive Ltd can improve the customer journey of consumers in the Computer 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.

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. BAIOO Family Interactive Ltd can explore opportunities that can attract volunteers and are consistent with its mission and vision.

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.

Better consumer reach

– The expansion of the 5G network will help BAIOO Family Interactive Ltd to increase its market reach. BAIOO Family Interactive Ltd 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.

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.

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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 -

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.

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.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, BAIOO Family Interactive Ltd may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Computer 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. BAIOO Family Interactive Ltd needs to understand the core reasons impacting the Computer Services industry. This will help it in building a better workplace.

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.

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.

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.

Instability in the European markets

– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. BAIOO Family Interactive Ltd will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.

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.

Environmental challenges

– BAIOO Family Interactive Ltd 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. BAIOO Family Interactive Ltd can take advantage of this fund but it will also bring new competitors in the Computer Services industry.

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.

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.

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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.

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