Based on various researches at Oak Spring University , Pacific Online Ltd is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, technology disruption, increasing government debt because of Covid-19 spendings, central banks are concerned over increasing inflation, there is backlash against globalization, increasing household debt because of falling income levels,
wage bills are increasing, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Pacific Online Ltd
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Pacific Online Ltd can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pacific Online Ltd, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pacific Online 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 Pacific Online Ltd can be done for the following purposes –
1. Strategic planning of Pacific Online Ltd
2. Improving business portfolio management of Pacific Online Ltd
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Printing & Publishing sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Pacific Online Ltd
Strengths of Pacific Online Ltd | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Pacific Online Ltd are -
Learning organization
- Pacific Online 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 Pacific Online Ltd is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Pacific Online Ltd emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Pacific Online Ltd is one of the leading players in the Printing & Publishing 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.
Sustainable margins compare to other players in Printing & Publishing industry
– Pacific Online Ltd has clearly differentiated products in the market place. This has enabled Pacific Online Ltd to fetch slight price premium compare to the competitors in the Printing & Publishing industry. The sustainable margins have also helped Pacific Online Ltd to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Pacific Online 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.
Digital Transformation in Printing & Publishing industry
- digital transformation varies from industry to industry. For Pacific Online Ltd digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Pacific Online 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.
Ability to lead change in Printing & Publishing
– Pacific Online Ltd is one of the leading players in the Printing & Publishing industry in Hong Kong. Over the years it has not only transformed the business landscape in the Printing & Publishing industry in Hong Kong but also across the existing markets. The ability to lead change has enabled Pacific Online Ltd in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Low bargaining power of suppliers
– Suppliers of Pacific Online Ltd in the Services sector have low bargaining power. Pacific Online Ltd has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Pacific Online Ltd to manage not only supply disruptions but also source products at highly competitive prices.
Training and development
– Pacific Online Ltd 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.
Analytics focus
– Pacific Online 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 Printing & Publishing 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.
High brand equity
– Pacific Online Ltd has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Pacific Online Ltd to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Pacific Online Ltd has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Printing & Publishing industry. Secondly the value chain collaborators of Pacific Online Ltd have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Pacific Online Ltd is present in almost all the verticals within the Printing & Publishing industry. This has provided Pacific Online 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.
Weaknesses of Pacific Online Ltd | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Pacific Online Ltd are -
Slow decision making process
– As mentioned earlier in the report, Pacific Online 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 Printing & Publishing industry over the last five years. Pacific Online 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.
Interest costs
– Compare to the competition, Pacific Online 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 operating costs
– Compare to the competitors, Pacific Online Ltd has high operating costs in the Printing & Publishing industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Pacific Online Ltd lucrative customers.
High dependence on Pacific Online Ltd ‘s star products
– The top 2 products and services of Pacific Online Ltd still accounts for major business revenue. This dependence on star products in Printing & Publishing industry has resulted into insufficient focus on developing new products, even though Pacific Online Ltd has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative at Pacific Online Ltd, in the dynamic environment of Printing & Publishing industry it has struggled to respond to the nimble upstart competition. Pacific Online Ltd has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Aligning sales with marketing
– From the outside it seems that Pacific Online Ltd needs to have more collaboration between its sales team and marketing team. Sales professionals in the Printing & Publishing industry have deep experience in developing customer relationships. Marketing department at Pacific Online Ltd can leverage the sales team experience to cultivate customer relationships as Pacific Online Ltd is planning to shift buying processes online.
Skills based hiring in Printing & Publishing industry
– The stress on hiring functional specialists at Pacific Online 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.
Increasing silos among functional specialists
– The organizational structure of Pacific Online Ltd is dominated by functional specialists. It is not different from other players in the Printing & Publishing industry, but Pacific Online Ltd needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Pacific Online Ltd to focus more on services in the Printing & Publishing industry rather than just following the product oriented approach.
High bargaining power of channel partners in Printing & Publishing industry
– because of the regulatory requirements in Hong Kong, Pacific Online Ltd is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Printing & Publishing industry.
Slow to strategic competitive environment developments
– As Pacific Online Ltd is one of the leading players in the Printing & Publishing industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Printing & Publishing industry in last five years.
Products dominated business model
– Even though Pacific Online Ltd has some of the most successful models in the Printing & Publishing industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Pacific Online Ltd should strive to include more intangible value offerings along with its core products and services.
Pacific Online Ltd Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Pacific Online Ltd are -
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. Pacific Online Ltd can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Pacific Online Ltd has opened avenues for new revenue streams for the organization in Printing & Publishing industry. This can help Pacific Online Ltd to build a more holistic ecosystem for Pacific Online Ltd products in the Printing & Publishing industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Pacific Online Ltd is facing challenges because of the dominance of functional experts in the organization. Pacific Online Ltd can utilize new technology in the field of Printing & Publishing industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Pacific Online 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 Printing & Publishing industry, and it will provide faster access to the consumers.
Leveraging digital technologies
– Pacific Online 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Pacific Online 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 Pacific Online 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Pacific Online Ltd can use these opportunities to build new business models that can help the communities that Pacific Online Ltd operates in. Secondly it can use opportunities from government spending in Printing & Publishing sector.
Learning at scale
– Online learning technologies has now opened space for Pacific Online 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Printing & Publishing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Pacific Online 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. Pacific Online 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Printing & Publishing industry, but it has also influenced the consumer preferences. Pacific Online 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 Pacific Online 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 Pacific Online Ltd to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Pacific Online 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 Printing & Publishing industry.
Low interest rates
– Even though inflation is raising its head in most developed economies, Pacific Online 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.
Threats Pacific Online Ltd External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Pacific Online Ltd are -
Environmental challenges
– Pacific Online 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. Pacific Online Ltd can take advantage of this fund but it will also bring new competitors in the Printing & Publishing industry.
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. Pacific Online Ltd needs to understand the core reasons impacting the Printing & Publishing 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 Pacific Online Ltd.
Easy access to finance
– Easy access to finance in Printing & Publishing industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Pacific Online Ltd 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 Pacific Online 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 Pacific Online 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 Pacific Online Ltd business can come under increasing regulations regarding data privacy, data security, 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 Pacific Online Ltd in the Printing & Publishing sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Pacific Online 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Pacific Online Ltd in Printing & Publishing industry. The Printing & Publishing 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.
Regulatory challenges
– Pacific Online 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 Printing & Publishing industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Printing & Publishing industry are lowering. It can presents Pacific Online Ltd with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Printing & Publishing sector.
Consumer confidence and its impact on Pacific Online 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 Printing & Publishing 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.
Weighted SWOT Analysis of Pacific Online Ltd Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Pacific Online 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 Pacific Online 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 Pacific Online 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 Pacific Online 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 Pacific Online Ltd needs to make to build a sustainable competitive advantage.
