Battling Over a New York Workout: the W Hotel Strategy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Battling Over a New York Workout: the W Hotel Strategy
On October 11, 2006, Istithmar, a subsidiary of Dubai World, the flagship investment company of the government of Dubai, purchased the 270-room W Hotel in Union Square from Related Companies for $285 million. LEM Capital, a mid-sized private equity firm, subsequently became a junior player in the stack of funders for the property. When Istithmar defaulted on its loan to its primary lender in 2009, LEM's $20 million investment was at risk. This case asks students to review the actual loan and intercreditor agreements to determine what strategy might help LEM to preserve its investment.
Swot Analysis of "Battling Over a New York Workout: the W Hotel Strategy" written by Lynne B. Sagalyn, Fred Knapp includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Istithmar Lem facing as an external strategic factors. Some of the topics covered in Battling Over a New York Workout: the W Hotel Strategy case study are - Strategic Management Strategies, Financial management, Recession, Strategy and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Battling Over a New York Workout: the W Hotel Strategy casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, increasing commodity prices, increasing government debt because of Covid-19 spendings, banking and financial system is disrupted by Bitcoin and other crypto currencies,
increasing household debt because of falling income levels, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Battling Over a New York Workout: the W Hotel Strategy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Battling Over a New York Workout: the W Hotel Strategy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Istithmar Lem, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Istithmar Lem 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 Battling Over a New York Workout: the W Hotel Strategy can be done for the following purposes –
1. Strategic planning using facts provided in Battling Over a New York Workout: the W Hotel Strategy case study
2. Improving business portfolio management of Istithmar Lem
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 Istithmar Lem
Strengths Battling Over a New York Workout: the W Hotel Strategy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Istithmar Lem in Battling Over a New York Workout: the W Hotel Strategy Harvard Business Review case study are -
High switching costs
– The high switching costs that Istithmar Lem 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.
Superior customer experience
– The customer experience strategy of Istithmar Lem in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Istithmar Lem 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 Battling Over a New York Workout: the W Hotel Strategy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Istithmar Lem has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Istithmar Lem to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Istithmar Lem 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 Battling Over a New York Workout: the W Hotel Strategy - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Istithmar Lem in the sector have low bargaining power. Battling Over a New York Workout: the W Hotel Strategy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Istithmar Lem to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Finance & Accounting industry
– Battling Over a New York Workout: the W Hotel Strategy firm has clearly differentiated products in the market place. This has enabled Istithmar Lem to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Istithmar Lem to invest into research and development (R&D) and innovation.
Analytics focus
– Istithmar Lem 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 Lynne B. Sagalyn, Fred Knapp 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.
Cross disciplinary teams
– Horizontal connected teams at the Istithmar Lem 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.
Learning organization
- Istithmar Lem 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 Istithmar Lem is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Battling Over a New York Workout: the W Hotel Strategy Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Istithmar Lem is present in almost all the verticals within the industry. This has provided firm in Battling Over a New York Workout: the W Hotel Strategy 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.
Training and development
– Istithmar Lem has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Battling Over a New York Workout: the W Hotel Strategy Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Weaknesses Battling Over a New York Workout: the W Hotel Strategy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Battling Over a New York Workout: the W Hotel Strategy are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Battling Over a New York Workout: the W Hotel Strategy 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 Istithmar Lem has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Istithmar Lem 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. Istithmar Lem 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 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 Istithmar Lem supply chain. Even after few cautionary changes mentioned in the HBR case study - Battling Over a New York Workout: the W Hotel Strategy, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Istithmar Lem vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Istithmar Lem is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Istithmar Lem needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Istithmar Lem to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Battling Over a New York Workout: the W Hotel Strategy 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 Istithmar Lem 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Istithmar Lem 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.
Low market penetration in new markets
– Outside its home market of Istithmar Lem, firm in the HBR case study Battling Over a New York Workout: the W Hotel Strategy needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Battling Over a New York Workout: the W Hotel Strategy, in the dynamic environment Istithmar Lem has struggled to respond to the nimble upstart competition. Istithmar Lem has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Skills based hiring
– The stress on hiring functional specialists at Istithmar Lem 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.
Lack of clear differentiation of Istithmar Lem products
– To increase the profitability and margins on the products, Istithmar Lem needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow to strategic competitive environment developments
– As Battling Over a New York Workout: the W Hotel Strategy HBR case study mentions - Istithmar Lem 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.
Opportunities Battling Over a New York Workout: the W Hotel Strategy | 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 Battling Over a New York Workout: the W Hotel Strategy are -
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Istithmar Lem 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. Istithmar Lem 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Istithmar Lem 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.
Creating value in data economy
– The success of analytics program of Istithmar Lem has opened avenues for new revenue streams for the organization in the industry. This can help Istithmar Lem to build a more holistic ecosystem as suggested in the Battling Over a New York Workout: the W Hotel Strategy case study. Istithmar Lem 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
– Istithmar Lem 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.
Manufacturing automation
– Istithmar Lem 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.
Using analytics as competitive advantage
– Istithmar Lem 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 Battling Over a New York Workout: the W Hotel Strategy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Istithmar Lem to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Istithmar Lem 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, Battling Over a New York Workout: the W Hotel Strategy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Istithmar Lem 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.
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 Istithmar Lem 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.
Building a culture of innovation
– managers at Istithmar Lem 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 Finance & Accounting segment.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Istithmar Lem in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Istithmar Lem is facing challenges because of the dominance of functional experts in the organization. Battling Over a New York Workout: the W Hotel Strategy 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.
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 Istithmar Lem in the consumer business. Now Istithmar Lem can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Battling Over a New York Workout: the W Hotel Strategy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Battling Over a New York Workout: the W Hotel Strategy 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 Istithmar Lem 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. Istithmar Lem 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.
Consumer confidence and its impact on Istithmar Lem 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.
Environmental challenges
– Istithmar Lem 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. Istithmar Lem can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Stagnating economy with rate increase
– Istithmar Lem 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Battling Over a New York Workout: the W Hotel Strategy, Istithmar Lem may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Istithmar Lem with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Istithmar Lem 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.
High dependence on third party suppliers
– Istithmar Lem 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.
Regulatory challenges
– Istithmar Lem 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.
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. Istithmar Lem needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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.
Weighted SWOT Analysis of Battling Over a New York Workout: the W Hotel Strategy 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 Battling Over a New York Workout: the W Hotel Strategy 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 Battling Over a New York Workout: the W Hotel Strategy 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 Battling Over a New York Workout: the W Hotel Strategy 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 Battling Over a New York Workout: the W Hotel Strategy 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 Istithmar Lem needs to make to build a sustainable competitive advantage.