Case Study Description of AMB Property Corporation: Navigating Treacherous Waters
n November 2008, in the depths of the worst financial crisis since the Great Depression, Hamid Moghadam, CEO of industrial REIT AMB, had to act decisively to reverse the sell-off in AMB shares and position the company to take advantage of future opportunities. Considering both the long and short term, Moghadam needed to re-evaluate the company's investment strategy and business model, formulate a financial strategy for maintaining liquidity and fortifying the company's balance sheet, and consider a number of organizational issues in order to successfully navigate the company through this crisis.
Swot Analysis of "AMB Property Corporation: Navigating Treacherous Waters" written by Douglas Abbey, Jahan J. Moslehi includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Amb Moghadam facing as an external strategic factors. Some of the topics covered in AMB Property Corporation: Navigating Treacherous Waters case study are - Strategic Management Strategies, and Strategy & Execution.
Some of the macro environment factors that can be used to understand the AMB Property Corporation: Navigating Treacherous Waters casestudy better are - – wage bills are increasing, increasing government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, talent flight as more people leaving formal jobs,
digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of AMB Property Corporation: Navigating Treacherous Waters
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in AMB Property Corporation: Navigating Treacherous Waters case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Amb Moghadam, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Amb Moghadam 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 AMB Property Corporation: Navigating Treacherous Waters can be done for the following purposes –
1. Strategic planning using facts provided in AMB Property Corporation: Navigating Treacherous Waters case study
2. Improving business portfolio management of Amb Moghadam
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 Amb Moghadam
Strengths AMB Property Corporation: Navigating Treacherous Waters | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Amb Moghadam in AMB Property Corporation: Navigating Treacherous Waters Harvard Business Review case study are -
High switching costs
– The high switching costs that Amb Moghadam 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.
Cross disciplinary teams
– Horizontal connected teams at the Amb Moghadam 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.
Strong track record of project management
– Amb Moghadam is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Amb Moghadam is present in almost all the verticals within the industry. This has provided firm in AMB Property Corporation: Navigating Treacherous Waters 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.
Superior customer experience
– The customer experience strategy of Amb Moghadam in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Training and development
– Amb Moghadam has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in AMB Property Corporation: Navigating Treacherous Waters 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.
Ability to lead change in Strategy & Execution field
– Amb Moghadam is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Amb Moghadam in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Highly skilled collaborators
– Amb Moghadam 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 AMB Property Corporation: Navigating Treacherous Waters HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Amb Moghadam has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Amb Moghadam 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.
Low bargaining power of suppliers
– Suppliers of Amb Moghadam in the sector have low bargaining power. AMB Property Corporation: Navigating Treacherous Waters has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Amb Moghadam to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Strategy & Execution industry
– AMB Property Corporation: Navigating Treacherous Waters firm has clearly differentiated products in the market place. This has enabled Amb Moghadam to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Amb Moghadam to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the AMB Property Corporation: Navigating Treacherous Waters Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Weaknesses AMB Property Corporation: Navigating Treacherous Waters | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of AMB Property Corporation: Navigating Treacherous Waters are -
Slow to strategic competitive environment developments
– As AMB Property Corporation: Navigating Treacherous Waters HBR case study mentions - Amb Moghadam 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.
Lack of clear differentiation of Amb Moghadam products
– To increase the profitability and margins on the products, Amb Moghadam needs to provide more differentiated products than what it is currently offering in the marketplace.
Interest costs
– Compare to the competition, Amb Moghadam 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.
High cash cycle compare to competitors
Amb Moghadam 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 Amb Moghadam is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Amb Moghadam needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Amb Moghadam to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Amb Moghadam 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.
No frontier risks strategy
– After analyzing the HBR case study AMB Property Corporation: Navigating Treacherous Waters, it seems that company is thinking about the frontier risks that can impact Strategy & Execution strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Skills based hiring
– The stress on hiring functional specialists at Amb Moghadam 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the AMB Property Corporation: Navigating Treacherous Waters 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 Amb Moghadam has relatively successful track record of launching new products.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Amb Moghadam supply chain. Even after few cautionary changes mentioned in the HBR case study - AMB Property Corporation: Navigating Treacherous Waters, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Amb Moghadam vulnerable to further global disruptions in South East Asia.
High operating costs
– Compare to the competitors, firm in the HBR case study AMB Property Corporation: Navigating Treacherous Waters 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 Amb Moghadam 's lucrative customers.
Opportunities AMB Property Corporation: Navigating Treacherous Waters | 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 AMB Property Corporation: Navigating Treacherous Waters are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Amb Moghadam 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. Amb Moghadam 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.
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 Amb Moghadam in the consumer business. Now Amb Moghadam can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Amb Moghadam can use these opportunities to build new business models that can help the communities that Amb Moghadam operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Building a culture of innovation
– managers at Amb Moghadam 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 Strategy & Execution segment.
Using analytics as competitive advantage
– Amb Moghadam 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 AMB Property Corporation: Navigating Treacherous Waters - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Amb Moghadam to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Amb Moghadam 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Amb Moghadam 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 Amb Moghadam to increase its market reach. Amb Moghadam 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.
Buying journey improvements
– Amb Moghadam can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. AMB Property Corporation: Navigating Treacherous Waters 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Amb Moghadam 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, AMB Property Corporation: Navigating Treacherous Waters, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Amb Moghadam 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.
Creating value in data economy
– The success of analytics program of Amb Moghadam has opened avenues for new revenue streams for the organization in the industry. This can help Amb Moghadam to build a more holistic ecosystem as suggested in the AMB Property Corporation: Navigating Treacherous Waters case study. Amb Moghadam can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Amb Moghadam 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.
Threats AMB Property Corporation: Navigating Treacherous Waters External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study AMB Property Corporation: Navigating Treacherous Waters are -
Consumer confidence and its impact on Amb Moghadam 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.
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.
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 Amb Moghadam in the Strategy & Execution sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Amb Moghadam is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Amb Moghadam can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
Stagnating economy with rate increase
– Amb Moghadam 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.
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 Amb Moghadam business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Amb Moghadam 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.
Environmental challenges
– Amb Moghadam 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. Amb Moghadam can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Technology acceleration in Forth Industrial Revolution
– Amb Moghadam has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Amb Moghadam 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.
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. Amb Moghadam needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study AMB Property Corporation: Navigating Treacherous Waters, Amb Moghadam 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 .
Weighted SWOT Analysis of AMB Property Corporation: Navigating Treacherous Waters 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 AMB Property Corporation: Navigating Treacherous Waters 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 AMB Property Corporation: Navigating Treacherous Waters 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 AMB Property Corporation: Navigating Treacherous Waters 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 AMB Property Corporation: Navigating Treacherous Waters 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 Amb Moghadam needs to make to build a sustainable competitive advantage.