Equity International: The Second Act, Chinese Version SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Equity International: The Second Act, Chinese Version
Thomas McDonald, senior vice president of Equity International, is weighing an investment in the Brazilian homebuilder Gafisa. Was this the right country? The right company? The right co-investor? The right time? McDonald would be investing alongside a Brazilian private equity firm, GP Investments, and must decide how to structure the investment. Especially, he must decide how to align his interests with those of GP. GP has recruited EI due to its prior experience with the Mexican homebuilder Homex. McDonald must also consider: Is that experience transferable to this investment?
Authors :: Nicolas P. Retsinas, Ben Creo, Ricardo Reisen de Pinho
Swot Analysis of "Equity International: The Second Act, Chinese Version" written by Nicolas P. Retsinas, Ben Creo, Ricardo Reisen de Pinho includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Gp Mcdonald facing as an external strategic factors. Some of the topics covered in Equity International: The Second Act, Chinese Version case study are - Strategic Management Strategies, Entrepreneurial finance, Joint ventures and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Equity International: The Second Act, Chinese Version casestudy better are - – talent flight as more people leaving formal jobs, technology disruption, increasing government debt because of Covid-19 spendings, there is backlash against globalization, increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs,
increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Equity International: The Second Act, Chinese Version
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Equity International: The Second Act, Chinese Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Gp Mcdonald, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Gp Mcdonald 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 Equity International: The Second Act, Chinese Version can be done for the following purposes –
1. Strategic planning using facts provided in Equity International: The Second Act, Chinese Version case study
2. Improving business portfolio management of Gp Mcdonald
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 Gp Mcdonald
Strengths Equity International: The Second Act, Chinese Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Gp Mcdonald in Equity International: The Second Act, Chinese Version Harvard Business Review case study are -
Organizational Resilience of Gp Mcdonald
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Gp Mcdonald does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Gp Mcdonald 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 Gp Mcdonald is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Equity International: The Second Act, Chinese Version Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Gp Mcdonald is one of the leading recruiters in the industry. Managers in the Equity International: The Second Act, Chinese Version are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Gp Mcdonald digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Gp Mcdonald has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
High brand equity
– Gp Mcdonald has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Gp Mcdonald to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to lead change in Finance & Accounting field
– Gp Mcdonald 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 Gp Mcdonald in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Innovation driven organization
– Gp Mcdonald is one of the most innovative firm in sector. Manager in Equity International: The Second Act, Chinese Version 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)
– Gp Mcdonald 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 Equity International: The Second Act, Chinese Version - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Gp Mcdonald is present in almost all the verticals within the industry. This has provided firm in Equity International: The Second Act, Chinese Version 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.
Cross disciplinary teams
– Horizontal connected teams at the Gp Mcdonald 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.
Highly skilled collaborators
– Gp Mcdonald 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 Equity International: The Second Act, Chinese Version HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Training and development
– Gp Mcdonald has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Equity International: The Second Act, Chinese Version 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 Equity International: The Second Act, Chinese Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Equity International: The Second Act, Chinese Version are -
Slow to strategic competitive environment developments
– As Equity International: The Second Act, Chinese Version HBR case study mentions - Gp Mcdonald 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Nicolas P. Retsinas, Ben Creo, Ricardo Reisen de Pinho suggests that, Gp Mcdonald 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.
Interest costs
– Compare to the competition, Gp Mcdonald 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Equity International: The Second Act, Chinese Version, it seems that the employees of Gp Mcdonald 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.
Increasing silos among functional specialists
– The organizational structure of Gp Mcdonald is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Gp Mcdonald needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Gp Mcdonald to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Gp Mcdonald 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Equity International: The Second Act, Chinese Version, is just above the industry average. Gp Mcdonald 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.
Products dominated business model
– Even though Gp Mcdonald 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 - Equity International: The Second Act, Chinese Version should strive to include more intangible value offerings along with its core products and services.
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 Gp Mcdonald supply chain. Even after few cautionary changes mentioned in the HBR case study - Equity International: The Second Act, Chinese Version, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Gp Mcdonald vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Gp Mcdonald 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.
Aligning sales with marketing
– It come across in the case study Equity International: The Second Act, Chinese Version 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 Equity International: The Second Act, Chinese Version can leverage the sales team experience to cultivate customer relationships as Gp Mcdonald is planning to shift buying processes online.
Opportunities Equity International: The Second Act, Chinese Version | 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 Equity International: The Second Act, Chinese Version are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Gp Mcdonald 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, Gp Mcdonald 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
– Gp Mcdonald 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.
Building a culture of innovation
– managers at Gp Mcdonald 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Gp Mcdonald can use these opportunities to build new business models that can help the communities that Gp Mcdonald operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Developing new processes and practices
– Gp Mcdonald 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.
Leveraging digital technologies
– Gp Mcdonald can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Learning at scale
– Online learning technologies has now opened space for Gp Mcdonald 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Gp Mcdonald 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.
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. Gp Mcdonald can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Gp Mcdonald 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, Equity International: The Second Act, Chinese Version, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Loyalty marketing
– Gp Mcdonald 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.
Using analytics as competitive advantage
– Gp Mcdonald 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 Equity International: The Second Act, Chinese Version - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Gp Mcdonald to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Threats Equity International: The Second Act, Chinese Version External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Equity International: The Second Act, Chinese Version are -
Shortening product life cycle
– it is one of the major threat that Gp Mcdonald 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 Gp Mcdonald 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.
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.
Regulatory challenges
– Gp Mcdonald 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.
Environmental challenges
– Gp Mcdonald 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. Gp Mcdonald can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Stagnating economy with rate increase
– Gp Mcdonald 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.
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. Gp Mcdonald needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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. Gp Mcdonald 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Equity International: The Second Act, Chinese Version, Gp Mcdonald 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 .
Increasing wage structure of Gp Mcdonald
– 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 Gp Mcdonald.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Gp Mcdonald with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Gp Mcdonald in the Finance & Accounting sector and impact the bottomline of the organization.
Weighted SWOT Analysis of Equity International: The Second Act, Chinese Version 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 Equity International: The Second Act, Chinese Version 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 Equity International: The Second Act, Chinese Version 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 Equity International: The Second Act, Chinese Version 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 Equity International: The Second Act, Chinese Version 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 Gp Mcdonald needs to make to build a sustainable competitive advantage.
