Battling Over a New York Workout: the W Hotel Strategy Loan Agreement SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Battling Over a New York Workout: the W Hotel Strategy Loan Agreement
On October 11, 2006, Istithmar, a subsidiary of Dubai World, the flagship investment company of the government of Dubai, purchased the 270-room W Hotel in Union Square from Related Companies for $285 million. LEM Capital, a mid-sized private equity firm, subsequently became a junior player in the stack of funders for the property. When Istithmar defaulted on its loan to its primary lender in 2009, LEM's $20 million investment was at risk. This case asks students to review the actual loan and intercreditor agreements to determine what strategy might help LEM to preserve its investment.
Swot Analysis of "Battling Over a New York Workout: the W Hotel Strategy Loan Agreement" written by Lynne B. Sagalyn, Fred Knapp includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Istithmar Lem facing as an external strategic factors. Some of the topics covered in Battling Over a New York Workout: the W Hotel Strategy Loan Agreement case study are - Strategic Management Strategies, Financial management, Recession, Strategy and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Battling Over a New York Workout: the W Hotel Strategy Loan Agreement casestudy better are - – supply chains are disrupted by pandemic , cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, increasing energy prices, challanges to central banks by blockchain based private currencies, central banks are concerned over increasing inflation,
there is backlash against globalization, geopolitical disruptions, etc
Introduction to SWOT Analysis of Battling Over a New York Workout: the W Hotel Strategy Loan Agreement
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Battling Over a New York Workout: the W Hotel Strategy Loan Agreement case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Istithmar Lem, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Istithmar Lem 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 Battling Over a New York Workout: the W Hotel Strategy Loan Agreement can be done for the following purposes –
1. Strategic planning using facts provided in Battling Over a New York Workout: the W Hotel Strategy Loan Agreement case study
2. Improving business portfolio management of Istithmar Lem
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Istithmar Lem
Strengths Battling Over a New York Workout: the W Hotel Strategy Loan Agreement | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Istithmar Lem in Battling Over a New York Workout: the W Hotel Strategy Loan Agreement Harvard Business Review case study are -
Ability to recruit top talent
– Istithmar Lem is one of the leading recruiters in the industry. Managers in the Battling Over a New York Workout: the W Hotel Strategy Loan Agreement are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Istithmar Lem has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Battling Over a New York Workout: the W Hotel Strategy Loan Agreement HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Istithmar Lem has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Istithmar Lem to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Istithmar Lem is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Istithmar Lem has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Battling Over a New York Workout: the W Hotel Strategy Loan Agreement - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Istithmar Lem is present in almost all the verticals within the industry. This has provided firm in Battling Over a New York Workout: the W Hotel Strategy Loan Agreement case study 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.
Innovation driven organization
– Istithmar Lem is one of the most innovative firm in sector. Manager in Battling Over a New York Workout: the W Hotel Strategy Loan Agreement Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Istithmar Lem has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Battling Over a New York Workout: the W Hotel Strategy Loan Agreement Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
High switching costs
– The high switching costs that Istithmar Lem 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.
Low bargaining power of suppliers
– Suppliers of Istithmar Lem in the sector have low bargaining power. Battling Over a New York Workout: the W Hotel Strategy Loan Agreement has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Istithmar Lem to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Finance & Accounting industry
– Battling Over a New York Workout: the W Hotel Strategy Loan Agreement firm has clearly differentiated products in the market place. This has enabled Istithmar Lem to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Istithmar Lem to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Istithmar Lem in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Battling Over a New York Workout: the W Hotel Strategy Loan Agreement | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Battling Over a New York Workout: the W Hotel Strategy Loan Agreement are -
Products dominated business model
– Even though Istithmar Lem has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Battling Over a New York Workout: the W Hotel Strategy Loan Agreement should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Istithmar Lem is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Istithmar Lem needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Istithmar Lem to focus more on services rather than just following the product oriented approach.
Aligning sales with marketing
– It come across in the case study Battling Over a New York Workout: the W Hotel Strategy Loan Agreement that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Battling Over a New York Workout: the W Hotel Strategy Loan Agreement can leverage the sales team experience to cultivate customer relationships as Istithmar Lem is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Battling Over a New York Workout: the W Hotel Strategy Loan Agreement has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Istithmar Lem 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Lynne B. Sagalyn, Fred Knapp suggests that, Istithmar Lem 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 industry.
Interest costs
– Compare to the competition, Istithmar Lem 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.
Low market penetration in new markets
– Outside its home market of Istithmar Lem, firm in the HBR case study Battling Over a New York Workout: the W Hotel Strategy Loan Agreement needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Istithmar Lem has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Lack of clear differentiation of Istithmar Lem products
– To increase the profitability and margins on the products, Istithmar Lem needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Istithmar Lem 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 industry using digital technology.
Need for greater diversity
– Istithmar Lem 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.
Opportunities Battling Over a New York Workout: the W Hotel Strategy Loan Agreement | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Battling Over a New York Workout: the W Hotel Strategy Loan Agreement are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Istithmar Lem in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Istithmar Lem in the consumer business. Now Istithmar Lem can target international markets with far fewer capital restrictions requirements than the existing system.
Using analytics as competitive advantage
– Istithmar Lem has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Battling Over a New York Workout: the W Hotel Strategy Loan Agreement - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Istithmar Lem to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Istithmar Lem 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 Finance & Accounting segment.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Istithmar Lem can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Istithmar Lem 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.
Buying journey improvements
– Istithmar Lem can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Battling Over a New York Workout: the W Hotel Strategy Loan Agreement suggest that firm 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.
Manufacturing automation
– Istithmar Lem can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting segment. 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.
Better consumer reach
– The expansion of the 5G network will help Istithmar Lem to increase its market reach. Istithmar Lem 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.
Learning at scale
– Online learning technologies has now opened space for Istithmar Lem 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Istithmar Lem 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. Istithmar Lem 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Istithmar Lem 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.
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. Istithmar Lem can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats Battling Over a New York Workout: the W Hotel Strategy Loan Agreement External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Battling Over a New York Workout: the W Hotel Strategy Loan Agreement are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Istithmar Lem 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 prominent markets illustrated in HBR case study Battling Over a New York Workout: the W Hotel Strategy Loan Agreement .
High dependence on third party suppliers
– Istithmar Lem 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Istithmar Lem in the Finance & Accounting industry. The Finance & Accounting 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.
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 Istithmar Lem business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Istithmar Lem with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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. Istithmar Lem 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.
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 Istithmar Lem.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Istithmar Lem 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.
Technology acceleration in Forth Industrial Revolution
– Istithmar Lem has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Istithmar Lem needs to keep up with the evolution of technology in the Finance & Accounting 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.
Regulatory challenges
– Istithmar Lem 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 Finance & Accounting industry regulations.
Increasing wage structure of Istithmar Lem
– 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 Istithmar Lem.
Weighted SWOT Analysis of Battling Over a New York Workout: the W Hotel Strategy Loan Agreement Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Battling Over a New York Workout: the W Hotel Strategy Loan Agreement 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 the case study Battling Over a New York Workout: the W Hotel Strategy Loan Agreement 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 the Harvard case study Battling Over a New York Workout: the W Hotel Strategy Loan Agreement 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 Battling Over a New York Workout: the W Hotel Strategy Loan Agreement is 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 Istithmar Lem needs to make to build a sustainable competitive advantage.
