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 government debt because of Covid-19 spendings, competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, increasing transportation and logistics costs,
technology disruption, digital marketing is dominated by two big players Facebook and Google, 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 -
Operational resilience
– The operational resilience strategy in the Saudi Arabia: Getting the House in Order 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.
Innovation driven organization
– Liberalize Arabia is one of the most innovative firm in sector. Manager in Saudi Arabia: Getting the House in Order Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Liberalize Arabia 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 Saudi Arabia: Getting the House in Order - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
Ability to recruit top talent
– Liberalize Arabia is one of the leading recruiters in the industry. Managers in the Saudi Arabia: Getting the House in Order are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
Ability to lead change in Global Business field
– Liberalize Arabia 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 Liberalize Arabia in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Liberalize Arabia has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Saudi Arabia: Getting the House in Order 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.
Low bargaining power of suppliers
– Suppliers of Liberalize Arabia in the sector have low bargaining power. Saudi Arabia: Getting the House in Order has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Liberalize Arabia to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
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 -
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 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.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Saudi Arabia: Getting the House in Order 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 Liberalize Arabia has relatively successful track record of launching new products.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Saudi Arabia: Getting the House in Order, it seems that the employees of Liberalize Arabia 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.
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 bargaining power of channel partners
– Because of the regulatory requirements, Richard H.K. Vietor, Rebecca Evans suggests that, Liberalize Arabia 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.
Capital Spending Reduction
– Even during the low interest decade, Liberalize Arabia 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.
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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Saudi Arabia: Getting the House in Order, is just above the industry average. Liberalize Arabia 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.
Slow to strategic competitive environment developments
– As Saudi Arabia: Getting the House in Order HBR case study mentions - Liberalize Arabia 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 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 -
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.
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 Liberalize Arabia 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.
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.
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.
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.
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.
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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Global Business industry, but it has also influenced the consumer preferences. Liberalize Arabia can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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.
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.
Learning at scale
– Online learning technologies has now opened space for Liberalize Arabia 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.
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 -
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.
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.
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.
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.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
High 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.
Increasing wage structure of Liberalize Arabia
– 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 Liberalize Arabia.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Saudi Arabia: Getting the House in Order, Liberalize Arabia may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Global Business .
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.
Regulatory challenges
– Liberalize Arabia needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Global Business industry regulations.
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.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Liberalize Arabia 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 Saudi Arabia: Getting the House in Order .
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.
