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 - – increasing commodity prices, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, central banks are concerned over increasing inflation,
digital marketing is dominated by two big players Facebook and Google, supply chains are disrupted by pandemic , 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 -
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.
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.
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.
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.
Learning organization
- Ireka Berhad 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 Ireka Berhad is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Ireka Construction Berhad: A Chinese Family Business Goes Public Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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.
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.
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.
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.
Successful track record of launching new products
– Ireka Berhad has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ireka Berhad has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
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.
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 -
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Ireka Berhad supply chain. Even after few cautionary changes mentioned in the HBR case study - Ireka Construction Berhad: A Chinese Family Business Goes Public, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ireka Berhad vulnerable to further global disruptions in South East Asia.
No frontier risks strategy
– After analyzing the HBR case study Ireka Construction Berhad: A Chinese Family Business Goes Public, it seems that company is thinking about the frontier risks that can impact Global Business strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
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.
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.
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.
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.
Aligning sales with marketing
– It come across in the case study Ireka Construction Berhad: A Chinese Family Business Goes Public 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 Ireka Construction Berhad: A Chinese Family Business Goes Public can leverage the sales team experience to cultivate customer relationships as Ireka Berhad is planning to shift buying processes online.
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.
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.
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.
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.
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 -
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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. Ireka Berhad can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 -
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 .
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. 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.
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.
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. Ireka Berhad needs to understand the core reasons impacting the Global Business industry. This will help it in building a better workplace.
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.
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.
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.
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 .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ireka Berhad with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.
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.
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.
