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 – increasing government debt because of Covid-19 spendings, wage bills are increasing, increasing household debt because of falling income levels, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , geopolitical disruptions, banking and financial system is disrupted by Bitcoin and other crypto currencies,
digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, 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 -
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.
Strong track record of project management in the Beverages (Alcoholic) industry
– San Miguel Brewery Hong Kong is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
Organizational Resilience of San Miguel Brewery Hong Kong
– The covid-19 pandemic has put organizational resilience at the centre of everthing San Miguel Brewery Hong Kong does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
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.
Analytics focus
– San Miguel Brewery Hong Kong 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 Beverages (Alcoholic) 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.
Ability to recruit top talent
– San Miguel Brewery Hong Kong is one of the leading players in the Beverages (Alcoholic) 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.
Highly skilled collaborators
– San Miguel Brewery Hong Kong has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Beverages (Alcoholic) industry. Secondly the value chain collaborators of San Miguel Brewery Hong Kong have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of San Miguel Brewery Hong Kong in Beverages (Alcoholic) industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
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 -
Increasing silos among functional specialists
– The organizational structure of San Miguel Brewery Hong Kong is dominated by functional specialists. It is not different from other players in the Beverages (Alcoholic) industry, but San Miguel Brewery Hong Kong needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help San Miguel Brewery Hong Kong to focus more on services in the Beverages (Alcoholic) industry rather than just following the product oriented approach.
Employees’ less understanding of San Miguel Brewery Hong Kong strategy
– From the outside it seems that the employees of San Miguel Brewery Hong Kong 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.
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.
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.
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.
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.
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 San Miguel Brewery Hong Kong supply chain. Even after few cautionary changes, San Miguel Brewery Hong Kong is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left San Miguel Brewery Hong Kong vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Hong Kong, San Miguel Brewery Hong Kong needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 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.
High cash cycle compare to competitors
San Miguel Brewery Hong Kong has a high cash cycle compare to other players in the Beverages (Alcoholic) industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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 -
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 San Miguel Brewery Hong Kong 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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for San Miguel Brewery Hong Kong in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Beverages (Alcoholic) industry, and it will provide faster access to the consumers.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Beverages (Alcoholic) industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. San Miguel Brewery Hong Kong 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. San Miguel Brewery Hong Kong 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.
Developing new processes and practices
– San Miguel Brewery Hong Kong can develop new processes and procedures in Beverages (Alcoholic) 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.
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.
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.
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.
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.
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.
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.
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.
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 -
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.
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 San Miguel Brewery Hong Kong business can come under increasing regulations regarding data privacy, data security, etc.
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.
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.
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 San Miguel Brewery Hong Kong in the Beverages (Alcoholic) sector and impact the bottomline of the organization.
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.
Consumer confidence and its impact on San Miguel Brewery Hong Kong 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 Beverages (Alcoholic) industry and other sectors.
High dependence on third party suppliers
– San Miguel Brewery Hong Kong 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.
Stagnating economy with rate increase
– San Miguel Brewery Hong Kong 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 Beverages (Alcoholic) industry.
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.
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.
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.
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.
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.