Ireka Construction Berhad: A Chinese Family Business Goes Public SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Global Business
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Ireka Construction Berhad: A Chinese Family Business Goes Public
Ireka Construction Berhad is a small Chinese family business in Malaysia founded in 1967. The company's primary business was earthmoving for the mining industry, factory sites and housing lots, and has expanded its business into civil and structural engineering projects, building and construction, and hotel and property development. In 1992 it became a public company. This case illustrates the process of going from a private to a public company and discusses change management processes.
Swot Analysis of "Ireka Construction Berhad: A Chinese Family Business Goes Public" written by Anne Marie Francesco includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ireka Berhad facing as an external strategic factors. Some of the topics covered in Ireka Construction Berhad: A Chinese Family Business Goes Public case study are - Strategic Management Strategies, and Global Business.
Some of the macro environment factors that can be used to understand the Ireka Construction Berhad: A Chinese Family Business Goes Public casestudy better are - – customer relationship management is fast transforming because of increasing concerns over data privacy, technology disruption, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , geopolitical disruptions, talent flight as more people leaving formal jobs, increasing commodity prices,
cloud computing is disrupting traditional business models, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of Ireka Construction Berhad: A Chinese Family Business Goes Public
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Ireka Construction Berhad: A Chinese Family Business Goes Public case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ireka Berhad, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ireka Berhad 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 Ireka Construction Berhad: A Chinese Family Business Goes Public can be done for the following purposes –
1. Strategic planning using facts provided in Ireka Construction Berhad: A Chinese Family Business Goes Public case study
2. Improving business portfolio management of Ireka Berhad
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 Ireka Berhad
Strengths Ireka Construction Berhad: A Chinese Family Business Goes Public | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ireka Berhad in Ireka Construction Berhad: A Chinese Family Business Goes Public Harvard Business Review case study are -
High switching costs
– The high switching costs that Ireka Berhad 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.
Digital Transformation in Global Business segment
- digital transformation varies from industry to industry. For Ireka Berhad digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ireka Berhad 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.
Low bargaining power of suppliers
– Suppliers of Ireka Berhad in the sector have low bargaining power. Ireka Construction Berhad: A Chinese Family Business Goes Public has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ireka Berhad to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Ireka Berhad has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ireka Berhad to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Diverse revenue streams
– Ireka Berhad is present in almost all the verticals within the industry. This has provided firm in Ireka Construction Berhad: A Chinese Family Business Goes Public 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.
Organizational Resilience of Ireka Berhad
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ireka Berhad does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Global Business industry
– Ireka Construction Berhad: A Chinese Family Business Goes Public firm has clearly differentiated products in the market place. This has enabled Ireka Berhad to fetch slight price premium compare to the competitors in the Global Business industry. The sustainable margins have also helped Ireka Berhad to invest into research and development (R&D) and innovation.
Innovation driven organization
– Ireka Berhad is one of the most innovative firm in sector. Manager in Ireka Construction Berhad: A Chinese Family Business Goes Public Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Ireka Berhad has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Ireka Construction Berhad: A Chinese Family Business Goes Public 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.
Analytics focus
– Ireka Berhad 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 Anne Marie Francesco 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
– Ireka Berhad 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 Ireka Berhad 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
– Ireka Berhad is one of the leading recruiters in the industry. Managers in the Ireka Construction Berhad: A Chinese Family Business Goes Public are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses Ireka Construction Berhad: A Chinese Family Business Goes Public | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ireka Construction Berhad: A Chinese Family Business Goes Public are -
Slow to strategic competitive environment developments
– As Ireka Construction Berhad: A Chinese Family Business Goes Public HBR case study mentions - Ireka Berhad 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.
Products dominated business model
– Even though Ireka Berhad has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Ireka Construction Berhad: A Chinese Family Business Goes Public should strive to include more intangible value offerings along with its core products and services.
Workers concerns about automation
– As automation is fast increasing in the segment, Ireka Berhad 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.
Low market penetration in new markets
– Outside its home market of Ireka Berhad, firm in the HBR case study Ireka Construction Berhad: A Chinese Family Business Goes Public needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High cash cycle compare to competitors
Ireka Berhad 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Ireka Construction Berhad: A Chinese Family Business Goes Public, it seems that the employees of Ireka Berhad 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.
Skills based hiring
– The stress on hiring functional specialists at Ireka Berhad 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ireka Berhad is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Ireka Construction Berhad: A Chinese Family Business Goes Public 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 operating costs
– Compare to the competitors, firm in the HBR case study Ireka Construction Berhad: A Chinese Family Business Goes Public 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 Ireka Berhad 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Anne Marie Francesco suggests that, Ireka Berhad 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 decision making process
– As mentioned earlier in the report, Ireka Berhad 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. Ireka Berhad 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 Ireka Construction Berhad: A Chinese Family Business Goes Public | 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 Ireka Construction Berhad: A Chinese Family Business Goes Public are -
Buying journey improvements
– Ireka Berhad can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Ireka Construction Berhad: A Chinese Family Business Goes Public 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ireka Berhad 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, Ireka Construction Berhad: A Chinese Family Business Goes Public, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Ireka Berhad 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.
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 Ireka Berhad 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.
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. Ireka Berhad 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. Ireka Berhad 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ireka Berhad 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.
Leveraging digital technologies
– Ireka Berhad 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ireka Berhad is facing challenges because of the dominance of functional experts in the organization. Ireka Construction Berhad: A Chinese Family Business Goes Public 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 Ireka Berhad in the consumer business. Now Ireka Berhad can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Ireka Berhad to increase its market reach. Ireka Berhad 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.
Manufacturing automation
– Ireka Berhad 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.
Using analytics as competitive advantage
– Ireka Berhad 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 Ireka Construction Berhad: A Chinese Family Business Goes Public - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ireka Berhad to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Loyalty marketing
– Ireka Berhad 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.
Threats Ireka Construction Berhad: A Chinese Family Business Goes Public External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Ireka Construction Berhad: A Chinese Family Business Goes Public are -
Stagnating economy with rate increase
– Ireka Berhad 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.
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.
Shortening product life cycle
– it is one of the major threat that Ireka Berhad is facing in Global Business sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Ireka Berhad 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.
Consumer confidence and its impact on Ireka Berhad 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.
Easy access to finance
– Easy access to finance in Global Business field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Ireka Berhad can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Ireka Berhad 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 Ireka Berhad
– 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 Ireka Berhad.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Ireka Construction Berhad: A Chinese Family Business Goes Public, Ireka Berhad 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 .
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 Ireka Berhad business can come under increasing regulations regarding data privacy, data security, etc.
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.
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 Ireka Berhad in the Global Business sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Ireka Berhad 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 Ireka Construction Berhad: A Chinese Family Business Goes Public 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 Ireka Construction Berhad: A Chinese Family Business Goes Public 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 Ireka Construction Berhad: A Chinese Family Business Goes Public 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 Ireka Construction Berhad: A Chinese Family Business Goes Public 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 Ireka Construction Berhad: A Chinese Family Business Goes Public 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 Ireka Berhad needs to make to build a sustainable competitive advantage.