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 SWOT Analysis Solution
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 - – challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, increasing commodity prices, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, cloud computing is disrupting traditional business models,
there is backlash against globalization, increasing energy 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 -
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.
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.
Strong track record of project management
– Masdar Uae is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
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.
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.
Operational resilience
– The operational resilience strategy in the Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy 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.
High brand equity
– Masdar Uae has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Masdar Uae to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Masdar Uae 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.
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.
Ability to lead change in Strategy & Execution field
– Masdar Uae 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 Masdar Uae in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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 bargaining power of channel partners
– Because of the regulatory requirements, Mary B. Teagarden suggests that, Masdar Uae 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.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy, is just above the industry average. Masdar Uae 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.
Low market penetration in new markets
– Outside its home market of Masdar Uae, firm in the HBR case study Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
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.
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.
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.
Interest costs
– Compare to the competition, Masdar Uae 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Masdar Uae is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy 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 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.
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 -
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.
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.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Masdar Uae can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
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 Masdar Uae 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.
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.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Masdar Uae can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Masdar Uae can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Masdar Uae in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Strategy & Execution segment, and it will provide faster access to the consumers.
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 -
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.
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.
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. Masdar Uae 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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Masdar Uae 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 Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy .
Regulatory challenges
– Masdar Uae needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Masdar City Initiative: One Step in the United Arab Emirates Journey to a New Energy Economy, Masdar Uae 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 .
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.
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.
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.
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.
Shortening product life cycle
– it is one of the major threat that Masdar Uae is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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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