A briefing note to prepare for part-time MBA students to participate in a 2-hour focus group session

A briefing note to prepare for part-time MBA students to participate in a 2-hour focus group session (information from perplexity.ai)

My question: "Please provide some briefing (pre-reading materials) on the following topic to prepare for my part-time MBA students in Hong Kong to participate in my upcoming 2-hour focus group session: "how the local retail SMEs in Hong Kong should respond to the tough business environment facing them in 2025 and the next 10 years"."

The reply: "Here is a briefing on how local retail SMEs in Hong Kong should respond to the tough business environment they face in 2025 and over the next decade. This includes context on challenges and strategies relevant for your MBA students in preparation for the focus group session.

Current Business Environment for Hong Kong Retail SMEs in 2025

Hong Kong retail SMEs are navigating a cautious and challenging business environment in 2025. Factors affecting them include global economic uncertainties, US tariffs, rising operational costs, and shifts in consumer behavior, including less local spending due to outbound "revenge tourism" by local residents. Despite some modest economic growth overall, local retail sales still face declines due to competition from cross-border shopping and changing market dynamics.

Key Challenges Facing Local Retail SMEs

1. Economic Flux & Market Uncertainty: Fluctuating global trade conditions, tightened financing, and economic volatility contribute to business caution.

2. Cash Flow & Financing Issues: Many SMEs face cash flow management difficulties and challenges in obtaining financing to support growth or operational needs.

3. Talent Acquisition: SMEs struggle to compete with larger firms for skilled employees amid growing labor shortages expected by 2028.

4. Changing Consumer Trends: Reduced local consumption due to outbound tourism, evolving shopping habits, and preference for digital and e-commerce channels.

Strategic Responses for Hong Kong Retail SMEs

• Diversification of Market Focus: Expanding local customer base and exploring new markets, including online and cross-border e-commerce opportunities.

• Digital Transformation: Investing in digital tools, online sales channels, and e-commerce platforms to reach customers cost-effectively and create new revenue streams.

• Innovation in Business Models: Incorporating creativity for product, service, and customer experience innovation to differentiate and stay competitive.

• Talent Development: Enhancing employee skills and knowledge through training to address recruitment challenges.

• Risk Management: Mitigating risks by source diversification, market expansion planning, and adapting to regulatory and cultural challenges in new markets.

• Maintaining Investment: Continued or increased investment plans in digital marketing, technology, and training despite cautious market sentiment.

This overview should provide useful context and themes for your students to discuss strategies for HK retail SMEs to survive and thrive going forward amid complex local and global pressures."