Empresas ICA and the Mexican Road Privatization Program SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Empresas ICA and the Mexican Road Privatization Program
Mexico's largest construction company, Empresas ICA, makes an initial public offering to international equity investors in April 1992 to help fund its participation in an ambitious new private-sector approach to highway development. Under the new program, launched by President Carlos Salinas de Gotari in 1989, the Mexican government offers concessions to private sector bidders for the construction and operation of toll roads along key transportation corridors. Winning bidders are required to take an equity stake in their communities and to raise debt capital outside of the public sector. The case allows students to explore the opportunities and risks offered to domestic and foreign firms by the privatization movement sweeping Latin America in the early 1990s.
Swot Analysis of "Empresas ICA and the Mexican Road Privatization Program" written by Willis Emmons, Monica Brand includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ica Empresas facing as an external strategic factors. Some of the topics covered in Empresas ICA and the Mexican Road Privatization Program case study are - Strategic Management Strategies, Financial management, International business, IPO, Policy, Regulation and Global Business.
Some of the macro environment factors that can be used to understand the Empresas ICA and the Mexican Road Privatization Program casestudy better are - – technology disruption, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, geopolitical disruptions, increasing transportation and logistics costs, increasing inequality as vast percentage of new income is going to the top 1%,
supply chains are disrupted by pandemic , digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Empresas ICA and the Mexican Road Privatization Program
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Empresas ICA and the Mexican Road Privatization Program case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ica Empresas, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ica Empresas 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 Empresas ICA and the Mexican Road Privatization Program can be done for the following purposes –
1. Strategic planning using facts provided in Empresas ICA and the Mexican Road Privatization Program case study
2. Improving business portfolio management of Ica Empresas
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 Ica Empresas
Strengths Empresas ICA and the Mexican Road Privatization Program | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ica Empresas in Empresas ICA and the Mexican Road Privatization Program Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Ica Empresas in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Ica Empresas is one of the most innovative firm in sector. Manager in Empresas ICA and the Mexican Road Privatization Program Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Ica Empresas is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Ica Empresas 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 Ica Empresas is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Empresas ICA and the Mexican Road Privatization Program Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Ica Empresas is present in almost all the verticals within the industry. This has provided firm in Empresas ICA and the Mexican Road Privatization Program 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.
Highly skilled collaborators
– Ica Empresas 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 Empresas ICA and the Mexican Road Privatization Program HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Ica Empresas 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.
Effective Research and Development (R&D)
– Ica Empresas 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 Empresas ICA and the Mexican Road Privatization Program - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Ica Empresas has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ica Empresas 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
– Ica Empresas 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 Willis Emmons, Monica Brand 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.
Ability to lead change in Global Business field
– Ica Empresas 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 Ica Empresas in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High brand equity
– Ica Empresas has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ica Empresas to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Empresas ICA and the Mexican Road Privatization Program | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Empresas ICA and the Mexican Road Privatization Program are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Empresas ICA and the Mexican Road Privatization Program, is just above the industry average. Ica Empresas 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.
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 Ica Empresas supply chain. Even after few cautionary changes mentioned in the HBR case study - Empresas ICA and the Mexican Road Privatization Program, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ica Empresas vulnerable to further global disruptions in South East Asia.
Lack of clear differentiation of Ica Empresas products
– To increase the profitability and margins on the products, Ica Empresas needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Ica Empresas is dominated by functional specialists. It is not different from other players in the Global Business segment. Ica Empresas needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ica Empresas to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Ica Empresas 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.
Low market penetration in new markets
– Outside its home market of Ica Empresas, firm in the HBR case study Empresas ICA and the Mexican Road Privatization Program 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 Empresas ICA and the Mexican Road Privatization Program 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 Ica Empresas 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Ica Empresas 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Willis Emmons, Monica Brand suggests that, Ica Empresas 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Empresas ICA and the Mexican Road Privatization Program, it seems that the employees of Ica Empresas 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.
Aligning sales with marketing
– It come across in the case study Empresas ICA and the Mexican Road Privatization Program 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 Empresas ICA and the Mexican Road Privatization Program can leverage the sales team experience to cultivate customer relationships as Ica Empresas is planning to shift buying processes online.
Opportunities Empresas ICA and the Mexican Road Privatization Program | 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 Empresas ICA and the Mexican Road Privatization Program are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ica Empresas can use these opportunities to build new business models that can help the communities that Ica Empresas operates in. Secondly it can use opportunities from government spending in Global Business sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ica Empresas is facing challenges because of the dominance of functional experts in the organization. Empresas ICA and the Mexican Road Privatization Program case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ica Empresas can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ica Empresas 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 Ica Empresas to hire the very best people irrespective of their geographical location.
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. Ica Empresas 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. Ica Empresas 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ica Empresas 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, Empresas ICA and the Mexican Road Privatization Program, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Ica Empresas in the consumer business. Now Ica Empresas can target international markets with far fewer capital restrictions requirements than the existing system.
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. Ica Empresas 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. Ica Empresas can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Ica Empresas 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 Ica Empresas 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.
Building a culture of innovation
– managers at Ica Empresas 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.
Developing new processes and practices
– Ica Empresas can develop new processes and procedures in Global Business 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.
Threats Empresas ICA and the Mexican Road Privatization Program External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Empresas ICA and the Mexican Road Privatization Program are -
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. Ica Empresas 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.
Increasing wage structure of Ica Empresas
– 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 Ica Empresas.
Shortening product life cycle
– it is one of the major threat that Ica Empresas is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Ica Empresas 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.
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 Ica Empresas.
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. Ica Empresas needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ica Empresas 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 Empresas ICA and the Mexican Road Privatization Program .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Empresas ICA and the Mexican Road Privatization Program, Ica Empresas 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 .
Technology acceleration in Forth Industrial Revolution
– Ica Empresas has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Ica Empresas 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.
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 Ica Empresas in the Global Business sector and impact the bottomline of the organization.
Consumer confidence and its impact on Ica Empresas demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Environmental challenges
– Ica Empresas 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. Ica Empresas can take advantage of this fund but it will also bring new competitors in the Global Business industry.
High dependence on third party suppliers
– Ica Empresas 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 Empresas ICA and the Mexican Road Privatization Program 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 Empresas ICA and the Mexican Road Privatization Program 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 Empresas ICA and the Mexican Road Privatization Program 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 Empresas ICA and the Mexican Road Privatization Program 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 Empresas ICA and the Mexican Road Privatization Program 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 Ica Empresas needs to make to build a sustainable competitive advantage.