Saudi Arabia: Getting the House in Order SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Saudi Arabia: Getting the House in Order
Provides a vehicle to explore Islamic development and political issues within BGIE (business, government, and international economy). Set in early 2002, the case focuses on Crown Prince Abdullah's efforts to liberalize a failing rentier state, that had been dependent on petroleum for too long. His efforts to liberalize, however, come at a politically and socially sensitive time--just after September 11, 2001, and in the midst of the Palestinian intifada. In a desperate effort to maintain oil prices, OPEC has recently reduced output by 1.5 million barrels daily, with Saudi Arabia bearing the largest cut.
Swot Analysis of "Saudi Arabia: Getting the House in Order" written by Richard H.K. Vietor, Rebecca Evans includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Liberalize Arabia facing as an external strategic factors. Some of the topics covered in Saudi Arabia: Getting the House in Order case study are - Strategic Management Strategies, Government and Global Business.
Some of the macro environment factors that can be used to understand the Saudi Arabia: Getting the House in Order casestudy better are - – increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, challanges to central banks by blockchain based private currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs,
competitive advantages are harder to sustain because of technology dispersion, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Saudi Arabia: Getting the House in Order
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Saudi Arabia: Getting the House in Order case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Liberalize Arabia, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Liberalize Arabia 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 Saudi Arabia: Getting the House in Order can be done for the following purposes –
1. Strategic planning using facts provided in Saudi Arabia: Getting the House in Order case study
2. Improving business portfolio management of Liberalize Arabia
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 Liberalize Arabia
Strengths Saudi Arabia: Getting the House in Order | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Liberalize Arabia in Saudi Arabia: Getting the House in Order Harvard Business Review case study are -
High brand equity
– Liberalize Arabia has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Liberalize Arabia to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Global Business industry
– Saudi Arabia: Getting the House in Order firm has clearly differentiated products in the market place. This has enabled Liberalize Arabia to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Liberalize Arabia to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Liberalize Arabia 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.
High switching costs
– The high switching costs that Liberalize Arabia 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.
Successful track record of launching new products
– Liberalize Arabia has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Liberalize Arabia 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.
Diverse revenue streams
– Liberalize Arabia is present in almost all the verticals within the industry. This has provided firm in Saudi Arabia: Getting the House in Order 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.
Organizational Resilience of Liberalize Arabia
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Liberalize Arabia does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Liberalize Arabia 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 Richard H.K. Vietor, Rebecca Evans 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.
Highly skilled collaborators
– Liberalize Arabia 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 Saudi Arabia: Getting the House in Order HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Liberalize Arabia 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 Liberalize Arabia is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Saudi Arabia: Getting the House in Order Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Liberalize Arabia in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Liberalize Arabia is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Saudi Arabia: Getting the House in Order | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Saudi Arabia: Getting the House in Order are -
Need for greater diversity
– Liberalize Arabia 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.
Aligning sales with marketing
– It come across in the case study Saudi Arabia: Getting the House in Order 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 Saudi Arabia: Getting the House in Order can leverage the sales team experience to cultivate customer relationships as Liberalize Arabia is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Liberalize Arabia 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 Liberalize Arabia products
– To increase the profitability and margins on the products, Liberalize Arabia needs to provide more differentiated products than what it is currently offering in the marketplace.
High operating costs
– Compare to the competitors, firm in the HBR case study Saudi Arabia: Getting the House in Order 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 Liberalize Arabia 's lucrative customers.
Interest costs
– Compare to the competition, Liberalize Arabia 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.
Low market penetration in new markets
– Outside its home market of Liberalize Arabia, firm in the HBR case study Saudi Arabia: Getting the House in Order needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Liberalize Arabia supply chain. Even after few cautionary changes mentioned in the HBR case study - Saudi Arabia: Getting the House in Order, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Liberalize Arabia vulnerable to further global disruptions in South East Asia.
Workers concerns about automation
– As automation is fast increasing in the segment, Liberalize Arabia 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Liberalize Arabia is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Saudi Arabia: Getting the House in Order can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Saudi Arabia: Getting the House in Order, in the dynamic environment Liberalize Arabia has struggled to respond to the nimble upstart competition. Liberalize Arabia has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Opportunities Saudi Arabia: Getting the House in Order | 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 Saudi Arabia: Getting the House in Order are -
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 Liberalize Arabia in the consumer business. Now Liberalize Arabia can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Liberalize Arabia 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
– Liberalize Arabia 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Liberalize Arabia 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 Liberalize Arabia to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Liberalize Arabia 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 Saudi Arabia: Getting the House in Order - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Liberalize Arabia to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Liberalize Arabia 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.
Buying journey improvements
– Liberalize Arabia can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Saudi Arabia: Getting the House in Order 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Liberalize Arabia can use these opportunities to build new business models that can help the communities that Liberalize Arabia operates in. Secondly it can use opportunities from government spending in Global Business sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Liberalize Arabia in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Global Business segment, and it will provide faster access to the consumers.
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. Liberalize Arabia can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Liberalize Arabia can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Global Business segment.
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. Liberalize Arabia 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. Liberalize Arabia 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.
Better consumer reach
– The expansion of the 5G network will help Liberalize Arabia to increase its market reach. Liberalize Arabia 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.
Threats Saudi Arabia: Getting the House in Order External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Saudi Arabia: Getting the House in Order are -
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Liberalize Arabia 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 Liberalize Arabia in the Global Business industry. The Global Business industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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 Liberalize Arabia business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Liberalize Arabia has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Liberalize Arabia needs to keep up with the evolution of technology in the Global Business 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.
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. Liberalize Arabia can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Liberalize Arabia needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Liberalize Arabia 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.
Shortening product life cycle
– it is one of the major threat that Liberalize Arabia is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Environmental challenges
– Liberalize Arabia 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. Liberalize Arabia can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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 Liberalize Arabia.
High dependence on third party suppliers
– Liberalize Arabia 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.
Weighted SWOT Analysis of Saudi Arabia: Getting the House in Order 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 Saudi Arabia: Getting the House in Order 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 Saudi Arabia: Getting the House in Order 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 Saudi Arabia: Getting the House in Order 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 Saudi Arabia: Getting the House in Order 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 Liberalize Arabia needs to make to build a sustainable competitive advantage.