San Miguel Brewery Hong Kong (236) SWOT Analysis / TOWS Matrix / MBA Resources
Beverages (Alcoholic)
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for San Miguel Brewery Hong Kong (Hong Kong)
Based on various researches at Oak Spring University , San Miguel Brewery Hong Kong is operating in a macro-environment that has been destablized by – central banks are concerned over increasing inflation, there is increasing trade war between United States & China, talent flight as more people leaving formal jobs, geopolitical disruptions, technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%,
increasing transportation and logistics costs, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of San Miguel Brewery Hong Kong
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that San Miguel Brewery Hong Kong can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the San Miguel Brewery Hong Kong, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which San Miguel Brewery Hong Kong 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 San Miguel Brewery Hong Kong can be done for the following purposes –
1. Strategic planning of San Miguel Brewery Hong Kong
2. Improving business portfolio management of San Miguel Brewery Hong Kong
3. Assessing feasibility of the new initiative in Hong Kong
4. Making a Beverages (Alcoholic) sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of San Miguel Brewery Hong Kong
Strengths of San Miguel Brewery Hong Kong | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of San Miguel Brewery Hong Kong are -
Operational resilience
– The operational resilience strategy of San Miguel Brewery Hong Kong comprises – understanding the underlying the factors in the Beverages (Alcoholic) 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 San Miguel Brewery Hong Kong in the Consumer/Non-Cyclical sector have low bargaining power. San Miguel Brewery Hong Kong has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps San Miguel Brewery Hong Kong to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– San Miguel Brewery Hong Kong is present in almost all the verticals within the Beverages (Alcoholic) industry. This has provided San Miguel Brewery Hong Kong 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.
High switching costs
– The high switching costs that San Miguel Brewery Hong Kong 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 Beverages (Alcoholic) industry
- digital transformation varies from industry to industry. For San Miguel Brewery Hong Kong digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. San Miguel Brewery Hong Kong 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.
Successful track record of launching new products
– San Miguel Brewery Hong Kong has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. San Miguel Brewery Hong Kong 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.
Cross disciplinary teams
– Horizontal connected teams at the San Miguel Brewery Hong Kong 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.
Learning organization
- San Miguel Brewery Hong Kong 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 San Miguel Brewery Hong Kong is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at San Miguel Brewery Hong Kong emphasize – knowledge, initiative, and innovation.
Training and development
– San Miguel Brewery Hong Kong has one of the best training and development program in Consumer/Non-Cyclical 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.
High brand equity
– San Miguel Brewery Hong Kong has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled San Miguel Brewery Hong Kong to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Beverages (Alcoholic)
– San Miguel Brewery Hong Kong is one of the leading players in the Beverages (Alcoholic) industry in Hong Kong. Over the years it has not only transformed the business landscape in the Beverages (Alcoholic) industry in Hong Kong but also across the existing markets. The ability to lead change has enabled San Miguel Brewery Hong Kong in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Beverages (Alcoholic) industry
– San Miguel Brewery Hong Kong has clearly differentiated products in the market place. This has enabled San Miguel Brewery Hong Kong to fetch slight price premium compare to the competitors in the Beverages (Alcoholic) industry. The sustainable margins have also helped San Miguel Brewery Hong Kong to invest into research and development (R&D) and innovation.
Weaknesses of San Miguel Brewery Hong Kong | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of San Miguel Brewery Hong Kong are -
Interest costs
– Compare to the competition, San Miguel Brewery Hong Kong 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.
Compensation and incentives
– The revenue per employee of San Miguel Brewery Hong Kong is just above the Beverages (Alcoholic) industry average. It needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High bargaining power of channel partners in Beverages (Alcoholic) industry
– because of the regulatory requirements in Hong Kong, San Miguel Brewery Hong Kong 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 Beverages (Alcoholic) industry.
Need for greater diversity
– San Miguel Brewery Hong Kong 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.
Capital Spending Reduction
– Even during the low interest decade, San Miguel Brewery Hong Kong 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 Beverages (Alcoholic) industry using digital technology.
Lack of clear differentiation of San Miguel Brewery Hong Kong products
– To increase the profitability and margins on the products, San Miguel Brewery Hong Kong needs to provide more differentiated products than what it is currently offering in the marketplace.
High dependence on San Miguel Brewery Hong Kong ‘s star products
– The top 2 products and services of San Miguel Brewery Hong Kong still accounts for major business revenue. This dependence on star products in Beverages (Alcoholic) industry has resulted into insufficient focus on developing new products, even though San Miguel Brewery Hong Kong has relatively successful track record of launching new products.
Products dominated business model
– Even though San Miguel Brewery Hong Kong has some of the most successful models in the Beverages (Alcoholic) industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. San Miguel Brewery Hong Kong should strive to include more intangible value offerings along with its core products and services.
High operating costs
– Compare to the competitors, San Miguel Brewery Hong Kong has high operating costs in the Beverages (Alcoholic) industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract San Miguel Brewery Hong Kong lucrative customers.
Slow decision making process
– As mentioned earlier in the report, San Miguel Brewery Hong Kong has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Beverages (Alcoholic) industry over the last five years. San Miguel Brewery Hong Kong 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.
Ability to respond to the competition
– As the decision making is very deliberative at San Miguel Brewery Hong Kong, in the dynamic environment of Beverages (Alcoholic) industry it has struggled to respond to the nimble upstart competition. San Miguel Brewery Hong Kong has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
San Miguel Brewery Hong Kong Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of San Miguel Brewery Hong Kong are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects San Miguel Brewery Hong Kong can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, San Miguel Brewery Hong Kong 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.
Loyalty marketing
– San Miguel Brewery Hong Kong 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.
Learning at scale
– Online learning technologies has now opened space for San Miguel Brewery Hong Kong 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.
Creating value in data economy
– The success of analytics program of San Miguel Brewery Hong Kong has opened avenues for new revenue streams for the organization in Beverages (Alcoholic) industry. This can help San Miguel Brewery Hong Kong to build a more holistic ecosystem for San Miguel Brewery Hong Kong products in the Beverages (Alcoholic) industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– San Miguel Brewery Hong Kong 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.
Manufacturing automation
– San Miguel Brewery Hong Kong can use the latest technology developments to improve its manufacturing and designing process in Beverages (Alcoholic) 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for San Miguel Brewery Hong Kong 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 San Miguel Brewery Hong Kong to hire the very best people irrespective of their geographical location.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Beverages (Alcoholic) industry, but it has also influenced the consumer preferences. San Miguel Brewery Hong Kong can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, San Miguel Brewery Hong Kong is facing challenges because of the dominance of functional experts in the organization. San Miguel Brewery Hong Kong can utilize new technology in the field of Beverages (Alcoholic) industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Use of Bitcoin and other crypto currencies for transactions in Beverages (Alcoholic) industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for San Miguel Brewery Hong Kong in the Beverages (Alcoholic) industry. Now San Miguel Brewery Hong Kong can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help San Miguel Brewery Hong Kong to increase its market reach. San Miguel Brewery Hong Kong 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.
Buying journey improvements
– San Miguel Brewery Hong Kong can improve the customer journey of consumers in the Beverages (Alcoholic) 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.
Threats San Miguel Brewery Hong Kong External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of San Miguel Brewery Hong Kong are -
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.
Technology acceleration in Forth Industrial Revolution
– San Miguel Brewery Hong Kong has witnessed rapid integration of technology during Covid-19 in the Beverages (Alcoholic) industry. As one of the leading players in the industry, San Miguel Brewery Hong Kong needs to keep up with the evolution of technology in the Beverages (Alcoholic) 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for San Miguel Brewery Hong Kong in Beverages (Alcoholic) industry. The Beverages (Alcoholic) 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 San Miguel Brewery Hong Kong
– 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 San Miguel Brewery Hong Kong.
Environmental challenges
– San Miguel Brewery Hong Kong 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. San Miguel Brewery Hong Kong can take advantage of this fund but it will also bring new competitors in the Beverages (Alcoholic) industry.
Easy access to finance
– Easy access to finance in Beverages (Alcoholic) industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. San Miguel Brewery Hong Kong can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Beverages (Alcoholic) industry are lowering. It can presents San Miguel Brewery Hong Kong with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Beverages (Alcoholic) sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, San Miguel Brewery Hong Kong may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Beverages (Alcoholic) sector.
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 San Miguel Brewery Hong Kong.
Regulatory challenges
– San Miguel Brewery Hong Kong 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 Beverages (Alcoholic) industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, San Miguel Brewery Hong Kong can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate San Miguel Brewery Hong Kong prominent markets.
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. San Miguel Brewery Hong Kong 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.
Weighted SWOT Analysis of San Miguel Brewery Hong Kong Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at San Miguel Brewery Hong Kong 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 San Miguel Brewery Hong Kong 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 San Miguel Brewery Hong Kong 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 San Miguel Brewery Hong Kong 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 San Miguel Brewery Hong Kong needs to make to build a sustainable competitive advantage.