Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor
The case examines the March 2015 Centerbridge Partners investment decision regarding whether to acquire Great Wolf Resorts, a North American family-oriented indoor water parks and hotel operator, from a private equity (PE) competitor, Apollo Global Management. The case allows for discussion of strategic and financing considerations by Centerbridge, a New York-based investment firm employing a flexible approach across investment disciplines: private equity (PE); credit, distressed strategies, and special situations; and real estate. Students are presented the opportunity to perform valuation analysis and compare two possible forms of financing for the potential acquisition: 1) traditional corporate debt and bond financing and 2) commercial mortgage-backed security (CMBS) financing. Strategically, the case poses the questions: Was Centerbridge valuing Great Wolf correctly? Would CMBS be the optimal financing structure, and why had no other firm contemplated this type of financing? Would the company, in partnership with Centerbridge, be able to execute on operational improvements and growth strategy? Was the purchase price multiple of 9.4x warranted in light of the opportunity set? Would an established PE firm like Apollo ever leave enough on the table for a successor private-equity owner to generate gains without necessary multiple expansion?
Swot Analysis of "Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor" written by Josh Lerner, John Dionne, Amram Migdal includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Centerbridge Wolf facing as an external strategic factors. Some of the topics covered in Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor case study are - Strategic Management Strategies, Costs, Entrepreneurial finance, Financial analysis, Financial markets, Negotiations and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor casestudy better are - – supply chains are disrupted by pandemic , increasing household debt because of falling income levels, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion, digital marketing is dominated by two big players Facebook and Google, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%,
central banks are concerned over increasing inflation, technology disruption, etc
Introduction to SWOT Analysis of Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Centerbridge Wolf, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Centerbridge Wolf 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 Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor can be done for the following purposes –
1. Strategic planning using facts provided in Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor case study
2. Improving business portfolio management of Centerbridge Wolf
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Centerbridge Wolf
Strengths Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Centerbridge Wolf in Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor Harvard Business Review case study are -
Highly skilled collaborators
– Centerbridge Wolf 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 Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Centerbridge Wolf has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Centerbridge Wolf to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Centerbridge Wolf is one of the most innovative firm in sector. Manager in Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Superior customer experience
– The customer experience strategy of Centerbridge Wolf in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Learning organization
- Centerbridge Wolf 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 Centerbridge Wolf is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Strong track record of project management
– Centerbridge Wolf is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Successful track record of launching new products
– Centerbridge Wolf has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Centerbridge Wolf 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.
Operational resilience
– The operational resilience strategy in the Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor 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.
Low bargaining power of suppliers
– Suppliers of Centerbridge Wolf in the sector have low bargaining power. Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Centerbridge Wolf to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Finance & Accounting industry
– Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor firm has clearly differentiated products in the market place. This has enabled Centerbridge Wolf to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Centerbridge Wolf to invest into research and development (R&D) and innovation.
Ability to lead change in Finance & Accounting field
– Centerbridge Wolf 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 Centerbridge Wolf in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Centerbridge Wolf digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Centerbridge Wolf 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.
Weaknesses Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor are -
High operating costs
– Compare to the competitors, firm in the HBR case study Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor 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 Centerbridge Wolf 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor, in the dynamic environment Centerbridge Wolf has struggled to respond to the nimble upstart competition. Centerbridge Wolf has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
No frontier risks strategy
– After analyzing the HBR case study Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor, it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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.
Aligning sales with marketing
– It come across in the case study Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor 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 Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor can leverage the sales team experience to cultivate customer relationships as Centerbridge Wolf is planning to shift buying processes online.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor, is just above the industry average. Centerbridge Wolf 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.
Need for greater diversity
– Centerbridge Wolf 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.
Slow decision making process
– As mentioned earlier in the report, Centerbridge Wolf 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. Centerbridge Wolf 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor 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 Centerbridge Wolf has relatively successful track record of launching new products.
Lack of clear differentiation of Centerbridge Wolf products
– To increase the profitability and margins on the products, Centerbridge Wolf needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Centerbridge Wolf 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 - Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor should strive to include more intangible value offerings along with its core products and services.
High cash cycle compare to competitors
Centerbridge Wolf 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.
Opportunities Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor | 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 Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Centerbridge Wolf 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, Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Centerbridge Wolf can develop new processes and procedures in Finance & Accounting 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Centerbridge Wolf can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Learning at scale
– Online learning technologies has now opened space for Centerbridge Wolf 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Centerbridge Wolf can use these opportunities to build new business models that can help the communities that Centerbridge Wolf operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Centerbridge Wolf 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
– Centerbridge Wolf 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Centerbridge Wolf 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.
Better consumer reach
– The expansion of the 5G network will help Centerbridge Wolf to increase its market reach. Centerbridge Wolf will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Using analytics as competitive advantage
– Centerbridge Wolf 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 Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Centerbridge Wolf to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Centerbridge Wolf can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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.
Creating value in data economy
– The success of analytics program of Centerbridge Wolf has opened avenues for new revenue streams for the organization in the industry. This can help Centerbridge Wolf to build a more holistic ecosystem as suggested in the Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor case study. Centerbridge Wolf can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Centerbridge Wolf is facing challenges because of the dominance of functional experts in the organization. Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor 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 Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor are -
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 Centerbridge Wolf business can come under increasing regulations regarding data privacy, data security, etc.
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 Centerbridge Wolf.
Consumer confidence and its impact on Centerbridge Wolf 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.
Shortening product life cycle
– it is one of the major threat that Centerbridge Wolf is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Centerbridge Wolf needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Environmental challenges
– Centerbridge Wolf 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. Centerbridge Wolf can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Centerbridge Wolf in the Finance & Accounting industry. The Finance & Accounting 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.
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. Centerbridge Wolf 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.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Centerbridge Wolf can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Centerbridge Wolf 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Centerbridge Wolf with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Centerbridge Wolf 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 Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor .
Regulatory challenges
– Centerbridge Wolf 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 Finance & Accounting industry regulations.
Weighted SWOT Analysis of Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor 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 Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor 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 Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor 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 Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor 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 Centerbridge Partners and Great Wolf Resorts: Buying from a Highly Regarded Competitor 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 Centerbridge Wolf needs to make to build a sustainable competitive advantage.
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