Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy
Early in the 21st Century the United Arab Emirates (UAE) government estimated that their oil reserves could run out in a 150 years. They began efforts to diversify the UAE economy into clean industries--tourism, technology and renewable energy--and signal that the country was pivoting away from an oil-based economy toward one that would grow and thrive as an environmentally aware, sustainable, low-carbon economy. Masdar City, a UAE marquee initiative designed to be the world's first zero-carbon city, was an important pillar of this economic diversification. Dr. Al-Jabar, Masdar City founder, envisioned it as a commercially viable "green-tech" cluster including an economic free zone relying on solar energy and other renewable resources that could serve as a model for sustainable urban development regionally and globally. This bold effort was not as straightforward as anticipated and planned. The case documents the wide variety of surprises--technological, financial and environmental challenges--that obstructed the initiative's progress, as well as the invaluable learning that unfolded as the Masdar City initiative evolved. The case provides an opportunity to explore the UAE's business climate, the role of government in economic development, challenges inherent in building an industry cluster, and limitations due to scarce talent resources.
Swot Analysis of "Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy" written by Mary B. Teagarden includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Masdar Uae facing as an external strategic factors. Some of the topics covered in Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy case study are - Strategic Management Strategies, Government, Risk management and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy casestudy better are - – geopolitical disruptions, talent flight as more people leaving formal jobs, increasing household debt because of falling income levels, wage bills are increasing, increasing energy prices, cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings,
challanges to central banks by blockchain based private currencies, increasing commodity prices, etc
Introduction to SWOT Analysis of Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Masdar Uae, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Masdar Uae 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 Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy can be done for the following purposes –
1. Strategic planning using facts provided in Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy case study
2. Improving business portfolio management of Masdar Uae
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 Masdar Uae
Strengths Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Masdar Uae in Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy Harvard Business Review case study are -
Highly skilled collaborators
– Masdar Uae 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 Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy 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 Masdar Uae in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High switching costs
– The high switching costs that Masdar Uae 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.
Training and development
– Masdar Uae has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy 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.
Organizational Resilience of Masdar Uae
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Masdar Uae does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Successful track record of launching new products
– Masdar Uae has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Masdar Uae 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 Masdar Uae in the sector have low bargaining power. Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Masdar Uae to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Masdar Uae is one of the leading recruiters in the industry. Managers in the Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Diverse revenue streams
– Masdar Uae is present in almost all the verticals within the industry. This has provided firm in Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy 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.
Innovation driven organization
– Masdar Uae is one of the most innovative firm in sector. Manager in Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy 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 Strategy & Execution segment
- digital transformation varies from industry to industry. For Masdar Uae digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Masdar Uae 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.
Effective Research and Development (R&D)
– Masdar Uae 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 Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy are -
High operating costs
– Compare to the competitors, firm in the HBR case study Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy 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 Masdar Uae 's lucrative customers.
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 Masdar Uae supply chain. Even after few cautionary changes mentioned in the HBR case study - Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Masdar Uae vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Masdar Uae products
– To increase the profitability and margins on the products, Masdar Uae needs to provide more differentiated products than what it is currently offering in the marketplace.
Capital Spending Reduction
– Even during the low interest decade, Masdar Uae 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Masdar Uae 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.
Products dominated business model
– Even though Masdar Uae 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 - Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy, it seems that the employees of Masdar Uae don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Slow decision making process
– As mentioned earlier in the report, Masdar Uae has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Masdar Uae even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
High cash cycle compare to competitors
Masdar Uae 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy 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 Masdar Uae has relatively successful track record of launching new products.
Increasing silos among functional specialists
– The organizational structure of Masdar Uae is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Masdar Uae needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Masdar Uae to focus more on services rather than just following the product oriented approach.
Opportunities Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy | 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 Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy are -
Using analytics as competitive advantage
– Masdar Uae 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 Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Masdar Uae to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Masdar Uae 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 Masdar Uae 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, Masdar Uae 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, Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Masdar Uae to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Better consumer reach
– The expansion of the 5G network will help Masdar Uae to increase its market reach. Masdar Uae 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Masdar Uae 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, Masdar Uae can use these opportunities to build new business models that can help the communities that Masdar Uae operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Building a culture of innovation
– managers at Masdar Uae 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Masdar Uae is facing challenges because of the dominance of functional experts in the organization. Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy 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.
Leveraging digital technologies
– Masdar Uae 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.
Manufacturing automation
– Masdar Uae 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.
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 Masdar Uae in the consumer business. Now Masdar Uae can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Masdar Uae 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.
Threats Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy are -
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Masdar Uae 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.
Environmental challenges
– Masdar Uae 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. Masdar Uae can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
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. Masdar Uae needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Increasing wage structure of Masdar Uae
– 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 Masdar Uae.
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 Masdar Uae.
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 Masdar Uae business can come under increasing regulations regarding data privacy, data security, 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. Masdar Uae can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Masdar Uae in the Strategy & Execution sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Masdar Uae with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Technology acceleration in Forth Industrial Revolution
– Masdar Uae has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Masdar Uae 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.
Consumer confidence and its impact on Masdar Uae 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.
Weighted SWOT Analysis of Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy 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 Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy 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 Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy 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 Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy 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 Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy 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 Masdar Uae needs to make to build a sustainable competitive advantage.
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