The Edificio Espana: A Global Investor Meets Local Politics SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Edificio Espana: A Global Investor Meets Local Politics
The Dalian Wanda Group Co. Ltd. (Wanda) was a fast-growing real estate imperium in China, built by Jianlin Wang, the wealthiest man in China. In 2010, Wang transformed Wanda into an entertainment conglomerate and initiated an ambitious international growth strategy. His ambitions knew few limits; however, one of his acquisitions-the Edificio EspaA?a in Spain, an iconic historical building in the centre of Madrid-ran into difficulties due to conflicts with the local authorities. Wang's refurbishment plans for Edificio EspaA?a envisaged a comprehensive renovation and upgrade of the building's commercial spaces, which required approvals from the Local Historical Heritage Commission. Initially, politicians expressed their support for Wang's plan, but the application progressed slowly through the formal process and became entangled in local politics. A local election mid-process resulted in a new party gaining control of the city council-a governing party that was not supportive of Wang's plans. Should Wang cut his losses and sell the building, or persist and reboot his project management?
Authors :: Klaus Meyer, Alicia Wang, Tomaz Fittipaldi
Swot Analysis of "The Edificio Espana: A Global Investor Meets Local Politics" written by Klaus Meyer, Alicia Wang, Tomaz Fittipaldi includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Edificio Wang's facing as an external strategic factors. Some of the topics covered in The Edificio Espana: A Global Investor Meets Local Politics case study are - Strategic Management Strategies, Policy, Risk management and Global Business.
Some of the macro environment factors that can be used to understand the The Edificio Espana: A Global Investor Meets Local Politics casestudy better are - – central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, increasing commodity prices, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, technology disruption, increasing government debt because of Covid-19 spendings,
increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of The Edificio Espana: A Global Investor Meets Local Politics
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Edificio Espana: A Global Investor Meets Local Politics case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Edificio Wang's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Edificio Wang's 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 Edificio Espana: A Global Investor Meets Local Politics can be done for the following purposes –
1. Strategic planning using facts provided in The Edificio Espana: A Global Investor Meets Local Politics case study
2. Improving business portfolio management of Edificio Wang's
3. Assessing feasibility of the new initiative in Global Business field.
4. Making a Global Business topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Edificio Wang's
Strengths The Edificio Espana: A Global Investor Meets Local Politics | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Edificio Wang's in The Edificio Espana: A Global Investor Meets Local Politics Harvard Business Review case study are -
Learning organization
- Edificio Wang's is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Edificio Wang's is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The Edificio Espana: A Global Investor Meets Local Politics Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Edificio Wang's in the sector have low bargaining power. The Edificio Espana: A Global Investor Meets Local Politics has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Edificio Wang's to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Edificio Wang's in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Successful track record of launching new products
– Edificio Wang's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Edificio Wang's 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.
Sustainable margins compare to other players in Global Business industry
– The Edificio Espana: A Global Investor Meets Local Politics firm has clearly differentiated products in the market place. This has enabled Edificio Wang's to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Edificio Wang's to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the The Edificio Espana: A Global Investor Meets Local Politics 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.
Analytics focus
– Edificio Wang's 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 Klaus Meyer, Alicia Wang, Tomaz Fittipaldi 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.
Effective Research and Development (R&D)
– Edificio Wang's 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 Edificio Espana: A Global Investor Meets Local Politics - 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
– Edificio Wang's 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 recruit top talent
– Edificio Wang's is one of the leading recruiters in the industry. Managers in the The Edificio Espana: A Global Investor Meets Local Politics are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Ability to lead change in Global Business field
– Edificio Wang's 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 Edificio Wang's in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Edificio Wang's has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Edificio Wang's to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses The Edificio Espana: A Global Investor Meets Local Politics | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Edificio Espana: A Global Investor Meets Local Politics are -
Slow to strategic competitive environment developments
– As The Edificio Espana: A Global Investor Meets Local Politics HBR case study mentions - Edificio Wang's 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.
Skills based hiring
– The stress on hiring functional specialists at Edificio Wang's has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High dependence on 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 Edificio Wang's supply chain. Even after few cautionary changes mentioned in the HBR case study - The Edificio Espana: A Global Investor Meets Local Politics, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Edificio Wang's vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Edificio Wang's products
– To increase the profitability and margins on the products, Edificio Wang's needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Edificio Wang's is dominated by functional specialists. It is not different from other players in the Global Business segment. Edificio Wang's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Edificio Wang's to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study The Edificio Espana: A Global Investor Meets Local Politics, it seems that company is thinking about the frontier risks that can impact Global Business 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.
Need for greater diversity
– Edificio Wang's 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the The Edificio Espana: A Global Investor Meets Local Politics 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 Edificio Wang's has relatively successful track record of launching new products.
High cash cycle compare to competitors
Edificio Wang's 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.
Aligning sales with marketing
– It come across in the case study The Edificio Espana: A Global Investor Meets Local Politics 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 Edificio Espana: A Global Investor Meets Local Politics can leverage the sales team experience to cultivate customer relationships as Edificio Wang's is planning to shift buying processes online.
Interest costs
– Compare to the competition, Edificio Wang's 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.
Opportunities The Edificio Espana: A Global Investor Meets Local Politics | 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 Edificio Espana: A Global Investor Meets Local Politics are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Edificio Wang's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Edificio Wang's 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.
Buying journey improvements
– Edificio Wang's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The Edificio Espana: A Global Investor Meets Local Politics 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.
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 Edificio Wang's 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Edificio Wang's 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 Edificio Espana: A Global Investor Meets Local Politics, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Edificio Wang's can use these opportunities to build new business models that can help the communities that Edificio Wang's operates in. Secondly it can use opportunities from government spending in Global Business sector.
Using analytics as competitive advantage
– Edificio Wang's 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 Edificio Espana: A Global Investor Meets Local Politics - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Edificio Wang's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Edificio Wang's 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 Global Business segment.
Better consumer reach
– The expansion of the 5G network will help Edificio Wang's to increase its market reach. Edificio Wang's 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.
Leveraging digital technologies
– Edificio Wang's 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 Edificio Wang's in the consumer business. Now Edificio Wang's can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Edificio Wang's 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 Edificio Wang's to hire the very best people irrespective of their geographical location.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Edificio Wang's is facing challenges because of the dominance of functional experts in the organization. The Edificio Espana: A Global Investor Meets Local Politics 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.
Threats The Edificio Espana: A Global Investor Meets Local Politics External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Edificio Espana: A Global Investor Meets Local Politics are -
High dependence on third party suppliers
– Edificio Wang's 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.
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 Edificio Wang's.
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. Edificio Wang's 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Edificio Wang's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Edificio Wang's needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Edificio Wang's is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Edificio Wang's 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 Global Business industry regulations.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Edificio Wang's 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 The Edificio Espana: A Global Investor Meets Local Politics .
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.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Edificio Wang's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Edificio Wang's in the Global Business industry. The Global Business 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.
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 Edificio Espana: A Global Investor Meets Local Politics, Edificio Wang's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
Increasing wage structure of Edificio Wang's
– 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 Edificio Wang's.
Weighted SWOT Analysis of The Edificio Espana: A Global Investor Meets Local Politics 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 Edificio Espana: A Global Investor Meets Local Politics 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 Edificio Espana: A Global Investor Meets Local Politics 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 Edificio Espana: A Global Investor Meets Local Politics 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 Edificio Espana: A Global Investor Meets Local Politics 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 Edificio Wang's needs to make to build a sustainable competitive advantage.