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 - – increasing energy prices, wage bills are increasing, increasing government debt because of Covid-19 spendings, cloud computing is disrupting traditional business models, increasing transportation and logistics costs, increasing household debt because of falling income levels, there is increasing trade war between United States & China,
supply chains are disrupted by pandemic , technology disruption, 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 -
Organizational Resilience of Ica Empresas
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ica Empresas does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Ica Empresas 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.
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.
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.
Low bargaining power of suppliers
– Suppliers of Ica Empresas in the sector have low bargaining power. Empresas ICA and the Mexican Road Privatization Program has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ica Empresas to manage not only supply disruptions but also source products at highly competitive prices.
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.
Training and development
– Ica Empresas has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Empresas ICA and the Mexican Road Privatization Program 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.
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.
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.
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.
Ability to recruit top talent
– Ica Empresas is one of the leading recruiters in the industry. Managers in the Empresas ICA and the Mexican Road Privatization Program are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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 -
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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ica Empresas is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Empresas ICA and the Mexican Road Privatization Program can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
Slow to strategic competitive environment developments
– As Empresas ICA and the Mexican Road Privatization Program HBR case study mentions - Ica Empresas 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 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.
No frontier risks strategy
– After analyzing the HBR case study Empresas ICA and the Mexican Road Privatization Program, it seems that company is thinking about the frontier risks that can impact Global Business strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Empresas ICA and the Mexican Road Privatization Program, in the dynamic environment Ica Empresas has struggled to respond to the nimble upstart competition. Ica Empresas has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Empresas ICA and the Mexican Road Privatization Program 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 Ica Empresas has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Ica Empresas has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Ica Empresas even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
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 -
Loyalty marketing
– Ica Empresas 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.
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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ica Empresas 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.
Learning at scale
– Online learning technologies has now opened space for Ica Empresas 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.
Using analytics as competitive advantage
– Ica Empresas 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 Empresas ICA and the Mexican Road Privatization Program - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ica Empresas to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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.
Manufacturing automation
– Ica Empresas 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.
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.
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.
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.
Better consumer reach
– The expansion of the 5G network will help Ica Empresas to increase its market reach. Ica Empresas 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 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 -
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.
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 Ica Empresas business can come under increasing regulations regarding data privacy, data security, etc.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ica Empresas 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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ica Empresas with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 .
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.
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.
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
– Ica Empresas 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
– 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.
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.
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.
