The Redevelopment of Palazzo Tornabuoni (B) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Redevelopment of Palazzo Tornabuoni (B)
On December 16, 2010, Byrne Murphy received a call from his Italian partner at Fingen Group. The recently-renovated Palazzo Tornabuoni, an iconic 15th century palace in the heart of Florence, Italy, had been seized by the local police. While Murphy tries to understand the reasons behind the seizure and figures out a strategy to accomodate guests flying in for holidays, he wonders if he and partners have chosen the right redevelopment option for the palace.
Authors :: Sid Yog, Arthur I Segel, Ricardo Andrade
Swot Analysis of "The Redevelopment of Palazzo Tornabuoni (B)" written by Sid Yog, Arthur I Segel, Ricardo Andrade includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tornabuoni Palazzo facing as an external strategic factors. Some of the topics covered in The Redevelopment of Palazzo Tornabuoni (B) case study are - Strategic Management Strategies, and Finance & Accounting.
Some of the macro environment factors that can be used to understand the The Redevelopment of Palazzo Tornabuoni (B) casestudy better are - – cloud computing is disrupting traditional business models, there is backlash against globalization, increasing commodity prices, increasing energy prices, there is increasing trade war between United States & China, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%,
supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of The Redevelopment of Palazzo Tornabuoni (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Redevelopment of Palazzo Tornabuoni (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tornabuoni Palazzo, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tornabuoni Palazzo 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 Redevelopment of Palazzo Tornabuoni (B) can be done for the following purposes –
1. Strategic planning using facts provided in The Redevelopment of Palazzo Tornabuoni (B) case study
2. Improving business portfolio management of Tornabuoni Palazzo
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 Tornabuoni Palazzo
Strengths The Redevelopment of Palazzo Tornabuoni (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tornabuoni Palazzo in The Redevelopment of Palazzo Tornabuoni (B) Harvard Business Review case study are -
High brand equity
– Tornabuoni Palazzo has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Tornabuoni Palazzo to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Finance & Accounting field
– Tornabuoni Palazzo 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 Tornabuoni Palazzo in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Tornabuoni Palazzo has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Redevelopment of Palazzo Tornabuoni (B) 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.
Successful track record of launching new products
– Tornabuoni Palazzo has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Tornabuoni Palazzo 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 Tornabuoni Palazzo in the sector have low bargaining power. The Redevelopment of Palazzo Tornabuoni (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tornabuoni Palazzo to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Tornabuoni Palazzo is one of the most innovative firm in sector. Manager in The Redevelopment of Palazzo Tornabuoni (B) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Tornabuoni Palazzo digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Tornabuoni Palazzo has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Cross disciplinary teams
– Horizontal connected teams at the Tornabuoni Palazzo 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.
Effective Research and Development (R&D)
– Tornabuoni Palazzo 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 Redevelopment of Palazzo Tornabuoni (B) - 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 switching costs
– The high switching costs that Tornabuoni Palazzo 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
– Tornabuoni Palazzo 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 The Redevelopment of Palazzo Tornabuoni (B) 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 Tornabuoni Palazzo in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses The Redevelopment of Palazzo Tornabuoni (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Redevelopment of Palazzo Tornabuoni (B) are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The Redevelopment of Palazzo Tornabuoni (B), it seems that the employees of Tornabuoni Palazzo 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.
Low market penetration in new markets
– Outside its home market of Tornabuoni Palazzo, firm in the HBR case study The Redevelopment of Palazzo Tornabuoni (B) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The Redevelopment of Palazzo Tornabuoni (B), is just above the industry average. Tornabuoni Palazzo 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.
High cash cycle compare to competitors
Tornabuoni Palazzo 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Tornabuoni Palazzo is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The Redevelopment of Palazzo Tornabuoni (B) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As The Redevelopment of Palazzo Tornabuoni (B) HBR case study mentions - Tornabuoni Palazzo 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Sid Yog, Arthur I Segel, Ricardo Andrade suggests that, Tornabuoni Palazzo 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.
No frontier risks strategy
– After analyzing the HBR case study The Redevelopment of Palazzo Tornabuoni (B), it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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.
Capital Spending Reduction
– Even during the low interest decade, Tornabuoni Palazzo 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.
Aligning sales with marketing
– It come across in the case study The Redevelopment of Palazzo Tornabuoni (B) 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 Redevelopment of Palazzo Tornabuoni (B) can leverage the sales team experience to cultivate customer relationships as Tornabuoni Palazzo is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Tornabuoni Palazzo is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Tornabuoni Palazzo needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Tornabuoni Palazzo to focus more on services rather than just following the product oriented approach.
Opportunities The Redevelopment of Palazzo Tornabuoni (B) | 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 Redevelopment of Palazzo Tornabuoni (B) are -
Using analytics as competitive advantage
– Tornabuoni Palazzo 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 The Redevelopment of Palazzo Tornabuoni (B) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Tornabuoni Palazzo to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Tornabuoni Palazzo can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Creating value in data economy
– The success of analytics program of Tornabuoni Palazzo has opened avenues for new revenue streams for the organization in the industry. This can help Tornabuoni Palazzo to build a more holistic ecosystem as suggested in the The Redevelopment of Palazzo Tornabuoni (B) case study. Tornabuoni Palazzo can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Tornabuoni Palazzo 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.
Building a culture of innovation
– managers at Tornabuoni Palazzo 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.
Better consumer reach
– The expansion of the 5G network will help Tornabuoni Palazzo to increase its market reach. Tornabuoni Palazzo 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.
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. Tornabuoni Palazzo 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. Tornabuoni Palazzo 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Tornabuoni Palazzo 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 Tornabuoni Palazzo to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Tornabuoni Palazzo 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, The Redevelopment of Palazzo Tornabuoni (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Tornabuoni Palazzo in the consumer business. Now Tornabuoni Palazzo can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Tornabuoni Palazzo can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Loyalty marketing
– Tornabuoni Palazzo 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
– Tornabuoni Palazzo 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.
Threats The Redevelopment of Palazzo Tornabuoni (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Redevelopment of Palazzo Tornabuoni (B) are -
Consumer confidence and its impact on Tornabuoni Palazzo 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Tornabuoni Palazzo in the Finance & Accounting industry. The Finance & Accounting industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Tornabuoni Palazzo business can come under increasing regulations regarding data privacy, data security, etc.
Increasing wage structure of Tornabuoni Palazzo
– 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 Tornabuoni Palazzo.
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. Tornabuoni Palazzo needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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. Tornabuoni Palazzo 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.
Stagnating economy with rate increase
– Tornabuoni Palazzo 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The Redevelopment of Palazzo Tornabuoni (B), Tornabuoni Palazzo 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 .
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.
Regulatory challenges
– Tornabuoni Palazzo 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.
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 Tornabuoni Palazzo in the Finance & Accounting sector and impact the bottomline of the organization.
Environmental challenges
– Tornabuoni Palazzo 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. Tornabuoni Palazzo can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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.
Weighted SWOT Analysis of The Redevelopment of Palazzo Tornabuoni (B) 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 Redevelopment of Palazzo Tornabuoni (B) 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 Redevelopment of Palazzo Tornabuoni (B) 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 Redevelopment of Palazzo Tornabuoni (B) 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 Redevelopment of Palazzo Tornabuoni (B) 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 Tornabuoni Palazzo needs to make to build a sustainable competitive advantage.