Project Finance for Autopistas del Centro SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Project Finance for Autopistas del Centro
In late spring 2009, Osvaldo MartAnez, Finance Manager at Autopistas del Centro, a private company operating a toll road bypass in Madrid, was analysing with growing concern the financial impact of reduced traffic on its toll road. In 2008, overall freeway traffic in Spain fell by 12%, and the trend did not suggest any improvement in 2009. Mr. MartAnez believed the situation to be basically unsustainable. The company's lenders wanted to renegotiate costs and deadlines, due to the increase in risk of the project. Due to the drop in revenues and operating earnings, the project would need an additional two million euros and the current shareholders refused to agree to all the refinancing of the project coming out of their pockets. Operational and financial improvements would be needed in order for the project to be viable and offer at least a minimal return. The case describes the progress of a project finance operation from its beginnings in 2004, and the situation of the project in 2009 in the face of a crisis and consequent failure to meet the initially expected cash flows. The case offers an excellent opportunity to discuss what to do when a Project Finance fails, analysing the alternative ways of ensuring the project's viability and profitability.
Swot Analysis of "Project Finance for Autopistas del Centro" written by Francisco J. Lopez Lubian includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Project Martanez facing as an external strategic factors. Some of the topics covered in Project Finance for Autopistas del Centro case study are - Strategic Management Strategies, Performance measurement, Project management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Project Finance for Autopistas del Centro casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing energy prices, central banks are concerned over increasing inflation, increasing transportation and logistics costs, challanges to central banks by blockchain based private currencies,
competitive advantages are harder to sustain because of technology dispersion, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Project Finance for Autopistas del Centro
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Project Finance for Autopistas del Centro case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Project Martanez, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Project Martanez 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 Project Finance for Autopistas del Centro can be done for the following purposes –
1. Strategic planning using facts provided in Project Finance for Autopistas del Centro case study
2. Improving business portfolio management of Project Martanez
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 Project Martanez
Strengths Project Finance for Autopistas del Centro | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Project Martanez in Project Finance for Autopistas del Centro Harvard Business Review case study are -
Training and development
– Project Martanez has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Project Finance for Autopistas del Centro 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.
Innovation driven organization
– Project Martanez is one of the most innovative firm in sector. Manager in Project Finance for Autopistas del Centro Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Sustainable margins compare to other players in Finance & Accounting industry
– Project Finance for Autopistas del Centro firm has clearly differentiated products in the market place. This has enabled Project Martanez to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Project Martanez to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Project Martanez 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 Project Finance for Autopistas del Centro - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Project Martanez in the sector have low bargaining power. Project Finance for Autopistas del Centro has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Project Martanez to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Finance & Accounting field
– Project Martanez 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 Project Martanez in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Cross disciplinary teams
– Horizontal connected teams at the Project Martanez 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
– Project Martanez 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 Project Finance for Autopistas del Centro HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Project Martanez is present in almost all the verticals within the industry. This has provided firm in Project Finance for Autopistas del Centro 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.
High brand equity
– Project Martanez has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Project Martanez to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Strong track record of project management
– Project Martanez is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Project Martanez digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Project Martanez 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.
Weaknesses Project Finance for Autopistas del Centro | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Project Finance for Autopistas del Centro are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Project Finance for Autopistas del Centro, it seems that the employees of Project Martanez 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.
Interest costs
– Compare to the competition, Project Martanez 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Francisco J. Lopez Lubian suggests that, Project Martanez 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Project Finance for Autopistas del Centro, in the dynamic environment Project Martanez has struggled to respond to the nimble upstart competition. Project Martanez has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study Project Finance for Autopistas del Centro 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 Project Martanez 's lucrative customers.
Slow decision making process
– As mentioned earlier in the report, Project Martanez 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. Project Martanez 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.
Slow to strategic competitive environment developments
– As Project Finance for Autopistas del Centro HBR case study mentions - Project Martanez 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.
Lack of clear differentiation of Project Martanez products
– To increase the profitability and margins on the products, Project Martanez needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study Project Finance for Autopistas del Centro 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 Project Finance for Autopistas del Centro can leverage the sales team experience to cultivate customer relationships as Project Martanez is planning to shift buying processes online.
Capital Spending Reduction
– Even during the low interest decade, Project Martanez 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.
High cash cycle compare to competitors
Project Martanez has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Opportunities Project Finance for Autopistas del Centro | 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 Project Finance for Autopistas del Centro are -
Using analytics as competitive advantage
– Project Martanez 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 Project Finance for Autopistas del Centro - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Project Martanez to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Project Martanez is facing challenges because of the dominance of functional experts in the organization. Project Finance for Autopistas del Centro 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.
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 Project Martanez 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.
Building a culture of innovation
– managers at Project Martanez 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.
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 Project Martanez in the consumer business. Now Project Martanez can target international markets with far fewer capital restrictions requirements than the existing system.
Manufacturing automation
– Project Martanez 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Project Martanez can use these opportunities to build new business models that can help the communities that Project Martanez operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Project Martanez can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Project Martanez 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.
Buying journey improvements
– Project Martanez can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Project Finance for Autopistas del Centro 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.
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. Project Martanez 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 Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Project Martanez 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. Project Martanez 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Project Martanez 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.
Threats Project Finance for Autopistas del Centro External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Project Finance for Autopistas del Centro are -
Regulatory challenges
– Project Martanez 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Project Finance for Autopistas del Centro, Project Martanez 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 Project Martanez
– 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 Project Martanez.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Project Martanez with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Project Martanez 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.
Shortening product life cycle
– it is one of the major threat that Project Martanez is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Project Martanez 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 Project Finance for Autopistas del Centro .
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. Project Martanez 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.
High dependence on third party suppliers
– Project Martanez 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.
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 Project Martanez business can come under increasing regulations regarding data privacy, data security, etc.
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 Project Martanez in the Finance & Accounting sector and impact the bottomline 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. Project Martanez needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Project Martanez can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Project Finance for Autopistas del Centro 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 Project Finance for Autopistas del Centro 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 Project Finance for Autopistas del Centro 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 Project Finance for Autopistas del Centro 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 Project Finance for Autopistas del Centro 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 Project Martanez needs to make to build a sustainable competitive advantage.
