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 - – challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, wage bills are increasing, competitive advantages are harder to sustain because of technology dispersion, technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions,
cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, 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 -
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.
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.
Innovation driven organization
– Istithmar Lem is one of the most innovative firm in sector. Manager in Battling Over a New York Workout: the W Hotel Strategy Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
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.
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.
Operational resilience
– The operational resilience strategy in the Battling Over a New York Workout: the W Hotel Strategy 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 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.
Strong track record of project management
– Istithmar Lem is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
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.
Organizational Resilience of Istithmar Lem
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Istithmar Lem does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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 -
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Battling Over a New York Workout: the W Hotel Strategy, is just above the industry average. Istithmar Lem 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.
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.
No frontier risks strategy
– After analyzing the HBR case study Battling Over a New York Workout: the W Hotel Strategy, 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Lynne B. Sagalyn, Fred Knapp suggests that, Istithmar Lem is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
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.
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.
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.
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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Battling Over a New York Workout: the W Hotel Strategy, it seems that the employees of Istithmar Lem don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Products dominated business model
– Even though Istithmar Lem 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 - Battling Over a New York Workout: the W Hotel Strategy should strive to include more intangible value offerings along with its core products and services.
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 -
Loyalty marketing
– Istithmar Lem 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.
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. Istithmar Lem can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Istithmar Lem 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 Istithmar Lem to hire the very best people irrespective of their geographical location.
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Istithmar Lem can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
Buying journey improvements
– Istithmar Lem can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Battling Over a New York Workout: the W Hotel Strategy 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.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Istithmar Lem can use these opportunities to build new business models that can help the communities that Istithmar Lem operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
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.
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.
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.
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 -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Istithmar Lem 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 Battling Over a New York Workout: the W Hotel Strategy .
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.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Istithmar Lem in the Finance & Accounting sector and impact the bottomline of the organization.
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.
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 Istithmar Lem.
Technology acceleration in Forth Industrial Revolution
– Istithmar Lem has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Istithmar Lem needs to keep up with the evolution of technology in the Finance & Accounting sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Shortening product life cycle
– it is one of the major threat that Istithmar Lem is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
Increasing wage structure of Istithmar Lem
– 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 Istithmar Lem.
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.
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. Istithmar Lem can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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.
