The Biggest Gorilla in the Room SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Biggest Gorilla in the Room
In late spring 2010, Liv Hugen returned to her native Scandinavia to relax before assuming responsibility over the real estate portfolio for her government's sovereign wealth fund. The fund's composite portfolio was expected to grow to approximately $500 billion in the near term and to $1 trillion over the next 10 years. The proceeds were to be invested to benefit the peoples of Scandinavia, a broadly defined objective including, among other things, health care services, social security, and social services. In March 2010, the fund received approval to invest up to 5 percent of the portfolio in real estate. Hugen essentially had a tabula rasa for the real estate program. She needed to finalize investment guidelines for the program, a long-term and short-term investment strategy, and equally important, an implementation plan for what would ultimately be one of the world's largest real estate portfolios. This case explores the information Hugen gathered and what issues she considered.
Swot Analysis of "The Biggest Gorilla in the Room" written by Douglas Abbey, Nori Gerardo Lietz includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hugen Estate facing as an external strategic factors. Some of the topics covered in The Biggest Gorilla in the Room case study are - Strategic Management Strategies, and Finance & Accounting.
Some of the macro environment factors that can be used to understand the The Biggest Gorilla in the Room casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, increasing energy prices, technology disruption,
cloud computing is disrupting traditional business models, increasing commodity prices, etc
Introduction to SWOT Analysis of The Biggest Gorilla in the Room
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Biggest Gorilla in the Room case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hugen Estate, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hugen Estate 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 The Biggest Gorilla in the Room can be done for the following purposes –
1. Strategic planning using facts provided in The Biggest Gorilla in the Room case study
2. Improving business portfolio management of Hugen Estate
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 Hugen Estate
Strengths The Biggest Gorilla in the Room | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hugen Estate in The Biggest Gorilla in the Room Harvard Business Review case study are -
Effective Research and Development (R&D)
– Hugen Estate 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 The Biggest Gorilla in the Room - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Hugen Estate in the sector have low bargaining power. The Biggest Gorilla in the Room has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hugen Estate to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Finance & Accounting industry
– The Biggest Gorilla in the Room firm has clearly differentiated products in the market place. This has enabled Hugen Estate to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Hugen Estate to invest into research and development (R&D) and innovation.
Training and development
– Hugen Estate has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Biggest Gorilla in the Room 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.
Diverse revenue streams
– Hugen Estate is present in almost all the verticals within the industry. This has provided firm in The Biggest Gorilla in the Room 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.
Strong track record of project management
– Hugen Estate is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Hugen Estate in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Organizational Resilience of Hugen Estate
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Hugen Estate does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Hugen Estate has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Hugen Estate 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.
Analytics focus
– Hugen Estate 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 industry. The technology infrastructure suggested by Douglas Abbey, Nori Gerardo Lietz can also help 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
– Hugen Estate is one of the leading recruiters in the industry. Managers in the The Biggest Gorilla in the Room are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Hugen Estate is one of the most innovative firm in sector. Manager in The Biggest Gorilla in the Room Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Weaknesses The Biggest Gorilla in the Room | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Biggest Gorilla in the Room are -
Workers concerns about automation
– As automation is fast increasing in the segment, Hugen Estate needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The Biggest Gorilla in the Room, it seems that the employees of Hugen Estate 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Hugen Estate is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The Biggest Gorilla in the Room 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 Hugen Estate 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.
Interest costs
– Compare to the competition, Hugen Estate 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.
Slow decision making process
– As mentioned earlier in the report, Hugen Estate has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Hugen Estate 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.
Increasing silos among functional specialists
– The organizational structure of Hugen Estate is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Hugen Estate needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hugen Estate to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Hugen Estate products
– To increase the profitability and margins on the products, Hugen Estate needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study The Biggest Gorilla in the Room 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 The Biggest Gorilla in the Room can leverage the sales team experience to cultivate customer relationships as Hugen Estate is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study The Biggest Gorilla in the Room 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 Hugen Estate 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The Biggest Gorilla in the Room, in the dynamic environment Hugen Estate has struggled to respond to the nimble upstart competition. Hugen Estate has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities The Biggest Gorilla in the Room | 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 The Biggest Gorilla in the Room are -
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. Hugen Estate can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Hugen Estate 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. Hugen Estate 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.
Leveraging digital technologies
– Hugen Estate 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.
Buying journey improvements
– Hugen Estate can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The Biggest Gorilla in the Room 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hugen Estate 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.
Better consumer reach
– The expansion of the 5G network will help Hugen Estate to increase its market reach. Hugen Estate 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.
Developing new processes and practices
– Hugen Estate can develop new processes and procedures in Finance & Accounting 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hugen Estate 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hugen Estate 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 Hugen Estate to hire the very best people irrespective of their geographical location.
Building a culture of innovation
– managers at Hugen Estate 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hugen Estate is facing challenges because of the dominance of functional experts in the organization. The Biggest Gorilla in the Room 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.
Loyalty marketing
– Hugen Estate 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.
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 Hugen Estate in the consumer business. Now Hugen Estate can target international markets with far fewer capital restrictions requirements than the existing system.
Threats The Biggest Gorilla in the Room External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Biggest Gorilla in the Room 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.
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 Hugen Estate business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Hugen Estate 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.
Shortening product life cycle
– it is one of the major threat that Hugen Estate is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Hugen Estate 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.
High dependence on third party suppliers
– Hugen Estate 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.
Increasing wage structure of Hugen Estate
– 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 Hugen Estate.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Hugen Estate needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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 Hugen Estate in the Finance & Accounting sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hugen Estate 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 The Biggest Gorilla in the Room .
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. Hugen Estate can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Hugen Estate 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Hugen Estate 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.
Weighted SWOT Analysis of The Biggest Gorilla in the Room 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 The Biggest Gorilla in the Room 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 The Biggest Gorilla in the Room 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 The Biggest Gorilla in the Room 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 The Biggest Gorilla in the Room 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 Hugen Estate needs to make to build a sustainable competitive advantage.
