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 – supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, wage bills are increasing, increasing energy prices, cloud computing is disrupting traditional business models, geopolitical disruptions, there is backlash against globalization, talent flight as more people leaving formal jobs, increasing transportation and logistics costs, 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 -

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.

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.

Ability to lead change in Computer Services

– BAIOO Family Interactive Ltd is one of the leading players in the Computer Services industry in Hong Kong. Over the years it has not only transformed the business landscape in the Computer Services industry in Hong Kong but also across the existing markets. The ability to lead change has enabled BAIOO Family Interactive Ltd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

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.

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.

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.

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.

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.

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.

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.

Cross disciplinary teams

– Horizontal connected teams at the BAIOO Family Interactive Ltd 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.

Innovation driven organization

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

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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 -

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.

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.

High dependence on BAIOO Family Interactive Ltd ‘s star products

– The top 2 products and services of BAIOO Family Interactive Ltd still accounts for major business revenue. This dependence on star products in Computer Services industry has resulted into insufficient focus on developing new products, even though BAIOO Family Interactive Ltd has relatively successful track record of launching new products.

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.

Capital Spending Reduction

– Even during the low interest decade, BAIOO Family Interactive Ltd 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 Computer Services industry using digital technology.

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.

Workers concerns about automation

– As automation is fast increasing in the Computer Services industry, BAIOO Family Interactive Ltd 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 operating costs

– Compare to the competitors, BAIOO Family Interactive Ltd has high operating costs in the Computer Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract BAIOO Family Interactive Ltd lucrative customers.

Need for greater diversity

– BAIOO Family Interactive Ltd 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.

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.

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.

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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 -

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.

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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, BAIOO Family Interactive Ltd is facing challenges because of the dominance of functional experts in the organization. BAIOO Family Interactive Ltd can utilize new technology in the field of Computer Services industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, 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. BAIOO Family Interactive Ltd can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, BAIOO Family Interactive Ltd 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 BAIOO Family Interactive Ltd to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

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.

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.

Leveraging digital technologies

– BAIOO Family Interactive Ltd can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.

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.

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.

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.

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.

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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 -

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.

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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for BAIOO Family Interactive Ltd in Computer Services industry. The Computer Services industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.

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.

Easy access to finance

– Easy access to finance in Computer Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. BAIOO Family Interactive Ltd can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry to Computer Services industry are lowering. It can presents BAIOO Family Interactive Ltd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Computer Services sector.

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.

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.

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.

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.

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.

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.

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.

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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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