Telecom Digital (6033) SWOT Analysis / TOWS Matrix / MBA Resources
Retail (Technology)
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Telecom Digital (Hong Kong)
Based on various researches at Oak Spring University , Telecom Digital is operating in a macro-environment that has been destablized by – increasing commodity prices, there is increasing trade war between United States & China, geopolitical disruptions, technology disruption, increasing transportation and logistics costs, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion,
increasing inequality as vast percentage of new income is going to the top 1%, digital marketing is dominated by two big players Facebook and Google, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Telecom Digital can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Telecom Digital, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Telecom Digital 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 Telecom Digital can be done for the following purposes –
1. Strategic planning of Telecom Digital
2. Improving business portfolio management of Telecom Digital
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Retail (Technology) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Telecom Digital
Strengths of Telecom Digital | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Telecom Digital are -
Learning organization
- Telecom Digital 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 Telecom Digital is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Telecom Digital emphasize – knowledge, initiative, and innovation.
Sustainable margins compare to other players in Retail (Technology) industry
– Telecom Digital has clearly differentiated products in the market place. This has enabled Telecom Digital to fetch slight price premium compare to the competitors in the Retail (Technology) industry. The sustainable margins have also helped Telecom Digital to invest into research and development (R&D) and innovation.
Diverse revenue streams
– Telecom Digital is present in almost all the verticals within the Retail (Technology) industry. This has provided Telecom Digital 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.
Analytics focus
– Telecom Digital 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 Retail (Technology) 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.
Cross disciplinary teams
– Horizontal connected teams at the Telecom Digital 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.
Highly skilled collaborators
– Telecom Digital has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Retail (Technology) industry. Secondly the value chain collaborators of Telecom Digital have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of Telecom Digital in the Services sector have low bargaining power. Telecom Digital has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Telecom Digital to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Telecom Digital has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Telecom Digital to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Telecom Digital is one of the most innovative firm in Retail (Technology) sector.
Operational resilience
– The operational resilience strategy of Telecom Digital comprises – understanding the underlying the factors in the Retail (Technology) 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.
Ability to lead change in Retail (Technology)
– Telecom Digital is one of the leading players in the Retail (Technology) industry in Hong Kong. Over the years it has not only transformed the business landscape in the Retail (Technology) industry in Hong Kong but also across the existing markets. The ability to lead change has enabled Telecom Digital in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management in the Retail (Technology) industry
– Telecom Digital is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses of Telecom Digital | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Telecom Digital are -
No frontier risks strategy
– From the 10K / annual statement of Telecom Digital, it seems that company is thinking out the frontier risks that can impact Retail (Technology) 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.
Increasing silos among functional specialists
– The organizational structure of Telecom Digital is dominated by functional specialists. It is not different from other players in the Retail (Technology) industry, but Telecom Digital needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Telecom Digital to focus more on services in the Retail (Technology) industry rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Telecom Digital 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 Retail (Technology) industry using digital technology.
High operating costs
– Compare to the competitors, Telecom Digital has high operating costs in the Retail (Technology) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Telecom Digital lucrative customers.
Need for greater diversity
– Telecom Digital 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.
High cash cycle compare to competitors
Telecom Digital has a high cash cycle compare to other players in the Retail (Technology) industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Skills based hiring in Retail (Technology) industry
– The stress on hiring functional specialists at Telecom Digital 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.
Employees’ less understanding of Telecom Digital strategy
– From the outside it seems that the employees of Telecom Digital 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.
Slow to strategic competitive environment developments
– As Telecom Digital is one of the leading players in the Retail (Technology) industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Retail (Technology) industry in last five years.
Workers concerns about automation
– As automation is fast increasing in the Retail (Technology) industry, Telecom Digital 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 bargaining power of channel partners in Retail (Technology) industry
– because of the regulatory requirements in Hong Kong, Telecom Digital 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 Retail (Technology) industry.
Telecom Digital Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Telecom Digital are -
Building a culture of innovation
– managers at Telecom Digital 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 Retail (Technology) industry.
Creating value in data economy
– The success of analytics program of Telecom Digital has opened avenues for new revenue streams for the organization in Retail (Technology) industry. This can help Telecom Digital to build a more holistic ecosystem for Telecom Digital products in the Retail (Technology) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Telecom Digital 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Telecom Digital in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Retail (Technology) industry, and it will provide faster access to the consumers.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Telecom Digital can use these opportunities to build new business models that can help the communities that Telecom Digital operates in. Secondly it can use opportunities from government spending in Retail (Technology) sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Telecom Digital 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.
Developing new processes and practices
– Telecom Digital can develop new processes and procedures in Retail (Technology) 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.
Better consumer reach
– The expansion of the 5G network will help Telecom Digital to increase its market reach. Telecom Digital 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.
Manufacturing automation
– Telecom Digital can use the latest technology developments to improve its manufacturing and designing process in Retail (Technology) 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.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Retail (Technology) industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Telecom Digital 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. Telecom Digital 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.
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 Telecom Digital 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.
Loyalty marketing
– Telecom Digital 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.
Use of Bitcoin and other crypto currencies for transactions in Retail (Technology) industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Telecom Digital in the Retail (Technology) industry. Now Telecom Digital can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Telecom Digital External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Telecom Digital are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Telecom Digital may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Retail (Technology) sector.
Environmental challenges
– Telecom Digital 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. Telecom Digital can take advantage of this fund but it will also bring new competitors in the Retail (Technology) industry.
Regulatory challenges
– Telecom Digital 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 Retail (Technology) industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Retail (Technology) industry are lowering. It can presents Telecom Digital with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Retail (Technology) sector.
Consumer confidence and its impact on Telecom Digital 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 Retail (Technology) industry and other sectors.
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. Telecom Digital needs to understand the core reasons impacting the Retail (Technology) industry. This will help it in building a better workplace.
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 Telecom Digital in the Retail (Technology) sector and impact the bottomline of the organization.
Technology acceleration in Forth Industrial Revolution
– Telecom Digital has witnessed rapid integration of technology during Covid-19 in the Retail (Technology) industry. As one of the leading players in the industry, Telecom Digital needs to keep up with the evolution of technology in the Retail (Technology) 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.
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 Telecom Digital business can come under increasing regulations regarding data privacy, data security, etc.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Telecom Digital in Retail (Technology) industry. The Retail (Technology) 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.
Increasing wage structure of Telecom Digital
– 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 Telecom Digital.
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.
Weighted SWOT Analysis of Telecom Digital Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Telecom Digital 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 Telecom Digital 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 Telecom Digital 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 Telecom Digital 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 Telecom Digital needs to make to build a sustainable competitive advantage.