Centaline Property Agency: Tactics for the Virtual Marketplace SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Strategy & Execution
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Centaline Property Agency: Tactics for the Virtual Marketplace
Since 1995, Centaline's business had evolved from being a pure provider of estate brokerage services, to a combined provider of both estate brokerage services and timely property information to prospective customers. Although the company had been successful in pioneering the concept of disseminating information to customers through the Internet free-of-charge since 1998, it was now facing fierce competition from other local real estate agencies. Centaline's main market competitor, Midland Realty Ltd., for example, started providing similar services to customers with the extensive use of IT, and vertical portal Propertystreet.net recently introduced a one-stop property shop incorporating information provided from various real estate agencies in Hong Kong. This case explores web-based business strategies and issues. Also allows for a discussion of how the WWW changes the nature of "reach, richness, and affiliation" and how that affects the balance of power between industry players and buyers. This case demonstrates that while new concepts enrich our understanding of e-business, the same types of tools and analysis that work in traditional businesses are still applicable and effective.
Authors :: Ali F. Farhoomand, Frederik Pretorius, Connie Sim, Andrew Lee
Swot Analysis of "Centaline Property Agency: Tactics for the Virtual Marketplace" written by Ali F. Farhoomand, Frederik Pretorius, Connie Sim, Andrew Lee includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Centaline's Estate facing as an external strategic factors. Some of the topics covered in Centaline Property Agency: Tactics for the Virtual Marketplace case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Centaline Property Agency: Tactics for the Virtual Marketplace casestudy better are - – there is backlash against globalization, talent flight as more people leaving formal jobs, increasing inequality as vast percentage of new income is going to the top 1%, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , technology disruption,
increasing commodity prices, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Centaline Property Agency: Tactics for the Virtual Marketplace
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Centaline Property Agency: Tactics for the Virtual Marketplace case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Centaline's Estate, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Centaline's 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 Centaline Property Agency: Tactics for the Virtual Marketplace can be done for the following purposes –
1. Strategic planning using facts provided in Centaline Property Agency: Tactics for the Virtual Marketplace case study
2. Improving business portfolio management of Centaline's Estate
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Centaline's Estate
Strengths Centaline Property Agency: Tactics for the Virtual Marketplace | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Centaline's Estate in Centaline Property Agency: Tactics for the Virtual Marketplace Harvard Business Review case study are -
Highly skilled collaborators
– Centaline's Estate 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 Centaline Property Agency: Tactics for the Virtual Marketplace HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Centaline's Estate in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Centaline's 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.
Ability to recruit top talent
– Centaline's Estate is one of the leading recruiters in the industry. Managers in the Centaline Property Agency: Tactics for the Virtual Marketplace 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
– Centaline's Estate is one of the most innovative firm in sector. Manager in Centaline Property Agency: Tactics for the Virtual Marketplace Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Organizational Resilience of Centaline's Estate
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Centaline's Estate does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Centaline's 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 Ali F. Farhoomand, Frederik Pretorius, Connie Sim, Andrew Lee 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.
Learning organization
- Centaline's Estate 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 Centaline's Estate is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Centaline Property Agency: Tactics for the Virtual Marketplace Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Centaline's Estate 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 Centaline's Estate in the sector have low bargaining power. Centaline Property Agency: Tactics for the Virtual Marketplace has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Centaline's Estate to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Centaline's 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 Centaline Property Agency: Tactics for the Virtual Marketplace - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Centaline's Estate has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Centaline's Estate to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Centaline Property Agency: Tactics for the Virtual Marketplace | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Centaline Property Agency: Tactics for the Virtual Marketplace are -
High cash cycle compare to competitors
Centaline's Estate 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.
Increasing silos among functional specialists
– The organizational structure of Centaline's Estate is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Centaline's Estate needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Centaline's Estate to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Centaline's Estate 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 - Centaline Property Agency: Tactics for the Virtual Marketplace should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Centaline Property Agency: Tactics for the Virtual Marketplace HBR case study mentions - Centaline's Estate takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Aligning sales with marketing
– It come across in the case study Centaline Property Agency: Tactics for the Virtual Marketplace 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 Centaline Property Agency: Tactics for the Virtual Marketplace can leverage the sales team experience to cultivate customer relationships as Centaline's Estate is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Centaline Property Agency: Tactics for the Virtual Marketplace, is just above the industry average. Centaline's Estate 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Centaline's Estate is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Centaline Property Agency: Tactics for the Virtual Marketplace can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Centaline Property Agency: Tactics for the Virtual Marketplace, in the dynamic environment Centaline's Estate has struggled to respond to the nimble upstart competition. Centaline's Estate has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Capital Spending Reduction
– Even during the low interest decade, Centaline's Estate 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Ali F. Farhoomand, Frederik Pretorius, Connie Sim, Andrew Lee suggests that, Centaline's Estate 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Centaline Property Agency: Tactics for the Virtual Marketplace, it seems that the employees of Centaline's 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.
Opportunities Centaline Property Agency: Tactics for the Virtual Marketplace | 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 Centaline Property Agency: Tactics for the Virtual Marketplace 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 Centaline's Estate 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Centaline's Estate can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Centaline Property Agency: Tactics for the Virtual Marketplace, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Centaline's Estate is facing challenges because of the dominance of functional experts in the organization. Centaline Property Agency: Tactics for the Virtual Marketplace 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Centaline's Estate can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Centaline's 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 Strategy & Execution segment, and it will provide faster access to the consumers.
Manufacturing automation
– Centaline's Estate can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
Using analytics as competitive advantage
– Centaline's Estate 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 Centaline Property Agency: Tactics for the Virtual Marketplace - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Centaline's Estate to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Centaline's 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.
Leveraging digital technologies
– Centaline's 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.
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. Centaline's Estate can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Centaline's 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 Centaline's Estate to hire the very best people irrespective of their geographical location.
Developing new processes and practices
– Centaline's Estate can develop new processes and procedures in Strategy & Execution 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.
Better consumer reach
– The expansion of the 5G network will help Centaline's Estate to increase its market reach. Centaline's 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.
Threats Centaline Property Agency: Tactics for the Virtual Marketplace External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Centaline Property Agency: Tactics for the Virtual Marketplace are -
Consumer confidence and its impact on Centaline's Estate 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.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Centaline's Estate can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Centaline's 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 Centaline Property Agency: Tactics for the Virtual Marketplace .
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 Centaline's Estate business can come under increasing regulations regarding data privacy, data security, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Centaline Property Agency: Tactics for the Virtual Marketplace, Centaline's Estate may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Technology acceleration in Forth Industrial Revolution
– Centaline's Estate has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Centaline's Estate needs to keep up with the evolution of technology in the Strategy & Execution 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.
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 Centaline's Estate.
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 Centaline's Estate is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Centaline's 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 Strategy & Execution industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Centaline's Estate in the Strategy & Execution industry. The Strategy & Execution 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.
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 Centaline's Estate in the Strategy & Execution sector and impact the bottomline of the organization.
Environmental challenges
– Centaline's Estate 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. Centaline's Estate can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Weighted SWOT Analysis of Centaline Property Agency: Tactics for the Virtual Marketplace 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 Centaline Property Agency: Tactics for the Virtual Marketplace 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 Centaline Property Agency: Tactics for the Virtual Marketplace 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 Centaline Property Agency: Tactics for the Virtual Marketplace 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 Centaline Property Agency: Tactics for the Virtual Marketplace 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 Centaline's Estate needs to make to build a sustainable competitive advantage.