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 - – technology disruption, central banks are concerned over increasing inflation, there is backlash against globalization, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing transportation and logistics costs, increasing commodity prices, wage bills are increasing,
customer relationship management is fast transforming because of increasing concerns over data privacy, cloud computing is disrupting traditional business models, 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 -
Effective Research and Development (R&D)
– Ireka Berhad 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 Ireka Construction Berhad: A Chinese Family Business Goes Public - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
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.
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.
Strong track record of project management
– Ireka Berhad is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Superior customer experience
– The customer experience strategy of Ireka Berhad in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
Operational resilience
– The operational resilience strategy in the Ireka Construction Berhad: A Chinese Family Business Goes Public 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 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.
Highly skilled collaborators
– Ireka Berhad 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 Ireka Construction Berhad: A Chinese Family Business Goes Public HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
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 -
Increasing silos among functional specialists
– The organizational structure of Ireka Berhad is dominated by functional specialists. It is not different from other players in the Global Business segment. Ireka Berhad needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ireka Berhad to focus more on services rather than just following the product oriented approach.
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.
Need for greater diversity
– Ireka Berhad has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Ireka Construction Berhad: A Chinese Family Business Goes Public, in the dynamic environment Ireka Berhad has struggled to respond to the nimble upstart competition. Ireka Berhad has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Ireka Berhad products
– To increase the profitability and margins on the products, Ireka Berhad needs to provide more differentiated products than what it is currently offering in the marketplace.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Ireka Construction Berhad: A Chinese Family Business Goes Public 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 Ireka Berhad has relatively successful track record of launching new products.
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.
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.
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 -
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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ireka Berhad can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ireka Berhad can use these opportunities to build new business models that can help the communities that Ireka Berhad operates in. Secondly it can use opportunities from government spending in Global Business sector.
Learning at scale
– Online learning technologies has now opened space for Ireka Berhad 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.
Building a culture of innovation
– managers at Ireka Berhad can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Global Business segment.
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.
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.
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.
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.
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. Ireka Berhad can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ireka Berhad 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.
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 -
Environmental challenges
– Ireka Berhad 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. Ireka Berhad can take advantage of this fund but it will also bring new competitors in the Global Business industry.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ireka Berhad 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 Ireka Construction Berhad: A Chinese Family Business Goes Public .
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.
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.
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.
Technology acceleration in Forth Industrial Revolution
– Ireka Berhad has witnessed rapid integration of technology during Covid-19 in the Global Business industry. As one of the leading players in the industry, Ireka Berhad needs to keep up with the evolution of technology in the Global Business sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
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 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 .
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.
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.
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.
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.
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.