Project Finance for Autopistas del Centro SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

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.

Authors :: Francisco J. Lopez Lubian

Topics :: Finance & Accounting

Tags :: Performance measurement, Project management, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

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 - – challanges to central banks by blockchain based private currencies, wage bills are increasing, central banks are concerned over increasing inflation, increasing energy prices, talent flight as more people leaving formal jobs, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, etc

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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.

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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

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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 -

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.

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.

Analytics focus

– Project Marta­nez 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 Francisco J. Lopez Lubian 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 recruit top talent

– Project Marta­nez is one of the leading recruiters in the industry. Managers in the Project Finance for Autopistas del Centro are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.

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.

Operational resilience

– The operational resilience strategy in the Project Finance for Autopistas del Centro Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.

High switching costs

– The high switching costs that Project Marta­nez has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.

Cross disciplinary teams

– Horizontal connected teams at the 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.

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.

Organizational Resilience of Project Marta­nez

– The covid-19 pandemic has put organizational resilience at the centre of everthing that Project Marta­nez does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Superior customer experience

– The customer experience strategy of Project Marta­nez in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Learning organization

- Project Marta­nez 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 Project Marta­nez is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Project Finance for Autopistas del Centro Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

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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 -

Skills based hiring

– The stress on hiring functional specialists at Project Marta­nez 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.

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.

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.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Project Marta­nez is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Project Finance for Autopistas del Centro can help to provide better information regarding products and services. It can also build an online community to further reach out to potential 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.

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.

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.

No frontier risks strategy

– After analyzing the HBR case study Project Finance for Autopistas del Centro, it seems that company is thinking about the frontier risks that can impact Finance & Accounting 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.

Low market penetration in new markets

– Outside its home market of Project Marta­nez, firm in the HBR case study Project Finance for Autopistas del Centro 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 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.

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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 -

Leveraging digital technologies

– Project Marta­nez 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.

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.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Project Marta­nez 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 Project Marta­nez 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 Project Marta­nez to hire the very best people irrespective of their geographical location.

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.

Creating value in data economy

– The success of analytics program of Project Marta­nez has opened avenues for new revenue streams for the organization in the industry. This can help Project Marta­nez to build a more holistic ecosystem as suggested in the Project Finance for Autopistas del Centro case study. Project Marta­nez can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.

Better consumer reach

– The expansion of the 5G network will help Project Marta­nez to increase its market reach. Project Marta­nez 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.

Learning at scale

– Online learning technologies has now opened space for Project Marta­nez 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

– 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.

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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Project Marta­nez 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.

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.

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.

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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 -

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 Project Marta­nez.

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.

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.

Consumer confidence and its impact on Project Marta­nez 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.

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.

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.

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.

Stagnating economy with rate increase

– Project Marta­nez 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.

Environmental challenges

– Project Marta­nez 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. Project Marta­nez can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.

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.

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.

Technology acceleration in Forth Industrial Revolution

– Project Marta­nez has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Project Marta­nez needs to keep up with the evolution of technology in the Finance & Accounting 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.

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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.

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