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 - – increasing household debt because of falling income levels, increasing commodity prices, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies,
digital marketing is dominated by two big players Facebook and Google, 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 -
Innovation driven organization
– Edificio Wang's is one of the most innovative firm in sector. Manager in The Edificio Espana: A Global Investor Meets Local Politics 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 Global Business segment
- digital transformation varies from industry to industry. For Edificio Wang's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Edificio Wang's 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.
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.
High switching costs
– The high switching costs that Edificio Wang's 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.
Organizational Resilience of Edificio Wang's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Edificio Wang's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
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.
Diverse revenue streams
– Edificio Wang's is present in almost all the verticals within the industry. This has provided firm in The Edificio Espana: A Global Investor Meets Local Politics 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.
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.
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.
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.
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 -
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.
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.
Capital Spending Reduction
– Even during the low interest decade, Edificio Wang's 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.
Products dominated business model
– Even though Edificio Wang's 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 - The Edificio Espana: A Global Investor Meets Local Politics should strive to include more intangible value offerings along with its core products and services.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Edificio Wang's 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The Edificio Espana: A Global Investor Meets Local Politics, in the dynamic environment Edificio Wang's has struggled to respond to the nimble upstart competition. Edificio Wang's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 operating costs
– Compare to the competitors, firm in the HBR case study The Edificio Espana: A Global Investor Meets Local Politics 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 Edificio Wang's 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Edificio Wang's 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. Edificio Wang's 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Edificio Wang's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The Edificio Espana: A Global Investor Meets Local Politics can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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 -
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. Edificio Wang's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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.
Manufacturing automation
– Edificio Wang's can use the latest technology developments to improve its manufacturing and designing process in Global Business 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Edificio Wang's 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
– 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.
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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Global Business industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Edificio Wang's 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. Edificio Wang's 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.
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.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Edificio Wang's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Creating value in data economy
– The success of analytics program of Edificio Wang's has opened avenues for new revenue streams for the organization in the industry. This can help Edificio Wang's to build a more holistic ecosystem as suggested in the The Edificio Espana: A Global Investor Meets Local Politics case study. Edificio Wang's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Edificio Wang's can develop new processes and procedures in Global Business 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.
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.
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 -
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.
Stagnating economy with rate increase
– Edificio Wang's 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.
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 .
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.
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.
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.
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.
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 .
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.
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.
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.
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.
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.
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.
