Prodigy Network: Democratizing Real Estate Design and Financing SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Prodigy Network: Democratizing Real Estate Design and Financing
This case follows Rodrigo Nino, founder and CEO of commercial real estate development company Prodigy Network, as he develops an equity-based crowdfunding model for small investors to access commercial real estate in Colombia, then tries out the model in the U.S. U.S. regulations, starting with the Securities Act of 1933, effectively barred sponsors from soliciting small investors for large commercial real estate. However, the JOBS Act of 2013 loosened U.S. restrictions on equity crowdfunding. Nino believes that crowdfunding will democratize real estate development by providing a new asset class for small investors, revolutionizing the industry. The case also follows Nino's development of an online platform to crowdsource design for his crowdfunded buildings, maximizing shared value throughout the development process. Nino faces many challenges as he attempts to crowdfund an extended stay hotel in Manhattan, New York. For example, crowdfunded real estate faces resistance from industry leaders, especially in regards to the concern of fraud, and SEC regulations on crowdfunding remain undetermined at the time of the case.
Authors :: Karim R. Lakhani, Katja Hutter, Greta Friar
Swot Analysis of "Prodigy Network: Democratizing Real Estate Design and Financing" written by Karim R. Lakhani, Katja Hutter, Greta Friar includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Crowdfunding Nino facing as an external strategic factors. Some of the topics covered in Prodigy Network: Democratizing Real Estate Design and Financing case study are - Strategic Management Strategies, Design, Disruptive innovation, Financial analysis, IT, Venture capital and Technology & Operations.
Some of the macro environment factors that can be used to understand the Prodigy Network: Democratizing Real Estate Design and Financing casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, technology disruption, wage bills are increasing, cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, increasing energy prices,
increasing government debt because of Covid-19 spendings, geopolitical disruptions, etc
Introduction to SWOT Analysis of Prodigy Network: Democratizing Real Estate Design and Financing
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Prodigy Network: Democratizing Real Estate Design and Financing case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Crowdfunding Nino, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Crowdfunding Nino 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 Prodigy Network: Democratizing Real Estate Design and Financing can be done for the following purposes –
1. Strategic planning using facts provided in Prodigy Network: Democratizing Real Estate Design and Financing case study
2. Improving business portfolio management of Crowdfunding Nino
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Crowdfunding Nino
Strengths Prodigy Network: Democratizing Real Estate Design and Financing | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Crowdfunding Nino in Prodigy Network: Democratizing Real Estate Design and Financing Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Crowdfunding Nino in the sector have low bargaining power. Prodigy Network: Democratizing Real Estate Design and Financing has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Crowdfunding Nino to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Crowdfunding Nino 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 Prodigy Network: Democratizing Real Estate Design and Financing - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Strong track record of project management
– Crowdfunding Nino 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 lead change in Technology & Operations field
– Crowdfunding Nino 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 Crowdfunding Nino in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Organizational Resilience of Crowdfunding Nino
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Crowdfunding Nino does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Crowdfunding Nino 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 Karim R. Lakhani, Katja Hutter, Greta Friar 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.
Sustainable margins compare to other players in Technology & Operations industry
– Prodigy Network: Democratizing Real Estate Design and Financing firm has clearly differentiated products in the market place. This has enabled Crowdfunding Nino to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Crowdfunding Nino to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Crowdfunding Nino has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Crowdfunding Nino 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.
Innovation driven organization
– Crowdfunding Nino is one of the most innovative firm in sector. Manager in Prodigy Network: Democratizing Real Estate Design and Financing Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Crowdfunding Nino has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Crowdfunding Nino to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Crowdfunding Nino is one of the leading recruiters in the industry. Managers in the Prodigy Network: Democratizing Real Estate Design and Financing are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Crowdfunding Nino 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 Prodigy Network: Democratizing Real Estate Design and Financing HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Prodigy Network: Democratizing Real Estate Design and Financing | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Prodigy Network: Democratizing Real Estate Design and Financing are -
Workers concerns about automation
– As automation is fast increasing in the segment, Crowdfunding Nino 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.
Low market penetration in new markets
– Outside its home market of Crowdfunding Nino, firm in the HBR case study Prodigy Network: Democratizing Real Estate Design and Financing needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Crowdfunding Nino 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 - Prodigy Network: Democratizing Real Estate Design and Financing should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Crowdfunding Nino 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.
Capital Spending Reduction
– Even during the low interest decade, Crowdfunding Nino 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, Karim R. Lakhani, Katja Hutter, Greta Friar suggests that, Crowdfunding Nino is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High operating costs
– Compare to the competitors, firm in the HBR case study Prodigy Network: Democratizing Real Estate Design and Financing 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 Crowdfunding Nino 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Prodigy Network: Democratizing Real Estate Design and Financing, in the dynamic environment Crowdfunding Nino has struggled to respond to the nimble upstart competition. Crowdfunding Nino has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Need for greater diversity
– Crowdfunding Nino has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Prodigy Network: Democratizing Real Estate Design and Financing, is just above the industry average. Crowdfunding Nino 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.
Increasing silos among functional specialists
– The organizational structure of Crowdfunding Nino is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Crowdfunding Nino needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Crowdfunding Nino to focus more on services rather than just following the product oriented approach.
Opportunities Prodigy Network: Democratizing Real Estate Design and Financing | 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 Prodigy Network: Democratizing Real Estate Design and Financing are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Crowdfunding Nino 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. Crowdfunding Nino 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.
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 Crowdfunding Nino 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Crowdfunding Nino can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Crowdfunding Nino is facing challenges because of the dominance of functional experts in the organization. Prodigy Network: Democratizing Real Estate Design and Financing 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.
Creating value in data economy
– The success of analytics program of Crowdfunding Nino has opened avenues for new revenue streams for the organization in the industry. This can help Crowdfunding Nino to build a more holistic ecosystem as suggested in the Prodigy Network: Democratizing Real Estate Design and Financing case study. Crowdfunding Nino can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Crowdfunding Nino can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Prodigy Network: Democratizing Real Estate Design and Financing 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Crowdfunding Nino can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Better consumer reach
– The expansion of the 5G network will help Crowdfunding Nino to increase its market reach. Crowdfunding Nino 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.
Using analytics as competitive advantage
– Crowdfunding Nino 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 Prodigy Network: Democratizing Real Estate Design and Financing - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Crowdfunding Nino to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Crowdfunding Nino 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.
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 Crowdfunding Nino in the consumer business. Now Crowdfunding Nino can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Crowdfunding Nino 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Crowdfunding Nino can use these opportunities to build new business models that can help the communities that Crowdfunding Nino operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Threats Prodigy Network: Democratizing Real Estate Design and Financing External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Prodigy Network: Democratizing Real Estate Design and Financing are -
Technology acceleration in Forth Industrial Revolution
– Crowdfunding Nino has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Crowdfunding Nino needs to keep up with the evolution of technology in the Technology & Operations 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.
Environmental challenges
– Crowdfunding Nino 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. Crowdfunding Nino can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
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 Crowdfunding Nino.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Prodigy Network: Democratizing Real Estate Design and Financing, Crowdfunding Nino may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Crowdfunding Nino can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Crowdfunding Nino needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
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 Crowdfunding Nino business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Crowdfunding Nino 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.
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.
High dependence on third party suppliers
– Crowdfunding Nino 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Crowdfunding Nino in the Technology & Operations industry. The Technology & Operations 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Crowdfunding Nino 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 Prodigy Network: Democratizing Real Estate Design and Financing .
Shortening product life cycle
– it is one of the major threat that Crowdfunding Nino is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Prodigy Network: Democratizing Real Estate Design and Financing 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 Prodigy Network: Democratizing Real Estate Design and Financing 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 Prodigy Network: Democratizing Real Estate Design and Financing 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 Prodigy Network: Democratizing Real Estate Design and Financing 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 Prodigy Network: Democratizing Real Estate Design and Financing 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 Crowdfunding Nino needs to make to build a sustainable competitive advantage.