Star Properties (1560) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Star Properties (Hong Kong)

Based on various researches at Oak Spring University , Star Properties is operating in a macro-environment that has been destablized by – geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies, central banks are concerned over increasing inflation, increasing energy prices, technology disruption, increasing commodity prices, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, etc

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Introduction to SWOT Analysis of Star Properties

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Star Properties can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Star Properties, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Star Properties 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 Star Properties can be done for the following purposes –
1. Strategic planning of Star Properties
2. Improving business portfolio management of Star Properties
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Construction Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Star Properties

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Strengths of Star Properties | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Star Properties are -

Digital Transformation in Construction Services industry

- digital transformation varies from industry to industry. For Star Properties digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Star Properties 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 Construction Services

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

Learning organization

- Star Properties 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 Star Properties is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Star Properties emphasize – knowledge, initiative, and innovation.

Diverse revenue streams

– Star Properties is present in almost all the verticals within the Construction Services industry. This has provided Star Properties 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.

Low bargaining power of suppliers

– Suppliers of Star Properties in the Capital Goods sector have low bargaining power. Star Properties has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Star Properties to manage not only supply disruptions but also source products at highly competitive prices.

Effective Research and Development (R&D)

– Star Properties has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Star Properties staying ahead in the Construction Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

High brand equity

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

Analytics focus

– Star Properties 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 Construction Services industry. The technology infrastructure of Hong Kong is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.

Superior customer experience

– The customer experience strategy of Star Properties in Construction Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Successful track record of launching new products

– Star Properties has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Star Properties 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.

Highly skilled collaborators

– Star Properties has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Construction Services industry. Secondly the value chain collaborators of Star Properties have helped the firm to develop new products and bring them quickly to the marketplace.

Organizational Resilience of Star Properties

– The covid-19 pandemic has put organizational resilience at the centre of everthing Star Properties does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

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Weaknesses of Star Properties | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Star Properties are -

High operating costs

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

Skills based hiring in Construction Services industry

– The stress on hiring functional specialists at Star Properties 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.

Aligning sales with marketing

– From the outside it seems that Star Properties needs to have more collaboration between its sales team and marketing team. Sales professionals in the Construction Services industry have deep experience in developing customer relationships. Marketing department at Star Properties can leverage the sales team experience to cultivate customer relationships as Star Properties is planning to shift buying processes online.

Low market penetration in new markets

– Outside its home market of Hong Kong, Star Properties needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Ability to respond to the competition

– As the decision making is very deliberative at Star Properties, in the dynamic environment of Construction Services industry it has struggled to respond to the nimble upstart competition. Star Properties has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.

High bargaining power of channel partners in Construction Services industry

– because of the regulatory requirements in Hong Kong, Star Properties 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 Construction Services industry.

Increasing silos among functional specialists

– The organizational structure of Star Properties is dominated by functional specialists. It is not different from other players in the Construction Services industry, but Star Properties needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Star Properties to focus more on services in the Construction Services industry rather than just following the product oriented approach.

Capital Spending Reduction

– Even during the low interest decade, Star Properties 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 Construction Services industry using digital technology.

High cash cycle compare to competitors

Star Properties has a high cash cycle compare to other players in the Construction Services industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

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

Slow to harness new channels of communication

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

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Star Properties Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Star Properties are -

Loyalty marketing

– Star Properties 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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Star Properties can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Creating value in data economy

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

Buying journey improvements

– Star Properties can improve the customer journey of consumers in the Construction 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Star Properties 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 Star Properties 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, Star Properties can use these opportunities to build new business models that can help the communities that Star Properties operates in. Secondly it can use opportunities from government spending in Construction Services sector.

Low interest rates

– Even though inflation is raising its head in most developed economies, Star Properties 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Star Properties in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Construction Services industry, and it will provide faster access to the consumers.

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. Star Properties can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Using analytics as competitive advantage

– Star Properties has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Construction Services sector. This continuous investment in analytics has enabled Star Properties to build a competitive advantage using analytics. The analytics driven competitive advantage can help Star Properties to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

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

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

Leveraging digital technologies

– Star Properties 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.

Changes in consumer behavior post Covid-19

– consumer behavior has changed in the Construction Services industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Star Properties 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. Star Properties 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.

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Threats Star Properties External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Star Properties are -

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 Star Properties business can come under increasing regulations regarding data privacy, data security, etc.

Shortening product life cycle

– it is one of the major threat that Star Properties is facing in Construction Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Increasing wage structure of Star Properties

– 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 Star Properties.

Technology acceleration in Forth Industrial Revolution

– Star Properties has witnessed rapid integration of technology during Covid-19 in the Construction Services industry. As one of the leading players in the industry, Star Properties needs to keep up with the evolution of technology in the Construction 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.

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. Star Properties needs to understand the core reasons impacting the Construction Services industry. This will help it in building a better workplace.

Environmental challenges

– Star Properties 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. Star Properties can take advantage of this fund but it will also bring new competitors in the Construction Services industry.

Stagnating economy with rate increase

– Star Properties 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 Construction Services industry.

Barriers of entry lowering

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

High dependence on third party suppliers

– Star Properties 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.

Regulatory challenges

– Star Properties 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 Construction Services industry regulations.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, Star Properties may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Construction Services sector.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Star Properties in Construction Services industry. The Construction 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.

Consumer confidence and its impact on Star Properties 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 Construction Services industry and other sectors.

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Weighted SWOT Analysis of Star Properties Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Star Properties 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 Star Properties 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 Star Properties 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 Star Properties 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 Star Properties needs to make to build a sustainable competitive advantage.

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