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 - – digital marketing is dominated by two big players Facebook and Google, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, technology disruption, cloud computing is disrupting traditional business models, increasing commodity prices, competitive advantages are harder to sustain because of technology dispersion,
talent flight as more people leaving formal jobs, increasing energy prices, 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.
Learning organization
- Istithmar Lem 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 Istithmar Lem is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Battling Over a New York Workout: the W Hotel Strategy Loan Agreement Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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.
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.
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.
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.
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.
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Istithmar Lem 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.
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.
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 -
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Istithmar Lem is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Battling Over a New York Workout: the W Hotel Strategy Loan Agreement can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Skills based hiring
– The stress on hiring functional specialists at Istithmar Lem 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.
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.
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 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Battling Over a New York Workout: the W Hotel Strategy Loan Agreement HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Istithmar Lem has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Battling Over a New York Workout: the W Hotel Strategy Loan Agreement, it seems that the employees of Istithmar Lem 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.
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.
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.
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 -
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Istithmar Lem can use these opportunities to build new business models that can help the communities that Istithmar Lem operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
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.
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.
Loyalty marketing
– Istithmar Lem 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.
Creating value in data economy
– The success of analytics program of Istithmar Lem has opened avenues for new revenue streams for the organization in the industry. This can help Istithmar Lem to build a more holistic ecosystem as suggested in the Battling Over a New York Workout: the W Hotel Strategy Loan Agreement case study. Istithmar Lem can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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.
Leveraging digital technologies
– Istithmar Lem 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Istithmar Lem is facing challenges because of the dominance of functional experts in the organization. Battling Over a New York Workout: the W Hotel Strategy Loan Agreement case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Istithmar Lem 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 Istithmar Lem to hire the very best people irrespective of their geographical location.
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 -
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.
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.
Consumer confidence and its impact on Istithmar Lem 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 the industry and other sectors.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Battling Over a New York Workout: the W Hotel Strategy Loan Agreement, Istithmar Lem may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
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.
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.
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 Istithmar Lem in the Finance & Accounting sector and impact the bottomline of the organization.
Environmental challenges
– Istithmar Lem 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. Istithmar Lem can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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 .
Stagnating economy with rate increase
– Istithmar Lem 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 field.
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.
Shortening product life cycle
– it is one of the major threat that Istithmar Lem is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.