Case Study Description of Patrimonio Hoy, Spanish Version
Patrimonio Hoy is a program targeting the housing needs of the low-income population by CEMEX, a major Mexican company and a leading global cement producer. Originally conceived as a project to understand the customers in the self-construction segment better, a major component of Mexican home-building concentrated in low-income neighborhoods, Patrimonio Hoy has generated recognition and good will for the company. Its innovative approach reduces significantly the cost and time needed by the poor to improve their housing. Begun in 1998, the program has reached break-even in 2004, with strong prospects of growth in the future. The president of CEMEX North America wonders whether the program should be turned into a major line of business for the company. Provides a good understanding of financing mechanisms available to home builders in Mexico and represents an interesting application of microfinance and product design to open a new market segment based on the needs of low-income customers.
Authors :: Arthur I Segel, Michael Chu, Gustavo A. Herrero
Swot Analysis of "Patrimonio Hoy, Spanish Version" written by Arthur I Segel, Michael Chu, Gustavo A. Herrero includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Hoy Patrimonio facing as an external strategic factors. Some of the topics covered in Patrimonio Hoy, Spanish Version case study are - Strategic Management Strategies, Collaboration, Competition, Emerging markets, Entrepreneurial finance, Innovation, Marketing, Social enterprise and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Patrimonio Hoy, Spanish Version casestudy better are - – geopolitical disruptions, increasing commodity prices, challanges to central banks by blockchain based private currencies, there is increasing trade war between United States & China, wage bills are increasing, there is backlash against globalization, increasing transportation and logistics costs,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Patrimonio Hoy, Spanish Version
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Patrimonio Hoy, Spanish Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Hoy Patrimonio, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Hoy Patrimonio 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 Patrimonio Hoy, Spanish Version can be done for the following purposes –
1. Strategic planning using facts provided in Patrimonio Hoy, Spanish Version case study
2. Improving business portfolio management of Hoy Patrimonio
3. Assessing feasibility of the new initiative in Innovation & Entrepreneurship field.
4. Making a Innovation & Entrepreneurship topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Hoy Patrimonio
Strengths Patrimonio Hoy, Spanish Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hoy Patrimonio in Patrimonio Hoy, Spanish Version Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Hoy Patrimonio in the sector have low bargaining power. Patrimonio Hoy, Spanish Version has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Hoy Patrimonio to manage not only supply disruptions but also source products at highly competitive prices.
Cross disciplinary teams
– Horizontal connected teams at the Hoy Patrimonio 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.
High brand equity
– Hoy Patrimonio has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Hoy Patrimonio to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Patrimonio Hoy, Spanish Version firm has clearly differentiated products in the market place. This has enabled Hoy Patrimonio to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Hoy Patrimonio to invest into research and development (R&D) and innovation.
Learning organization
- Hoy Patrimonio 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 Hoy Patrimonio is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Patrimonio Hoy, Spanish Version Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Hoy Patrimonio is present in almost all the verticals within the industry. This has provided firm in Patrimonio Hoy, Spanish Version 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.
Superior customer experience
– The customer experience strategy of Hoy Patrimonio in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Hoy Patrimonio 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 Patrimonio Hoy, Spanish Version HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to recruit top talent
– Hoy Patrimonio is one of the leading recruiters in the industry. Managers in the Patrimonio Hoy, Spanish Version are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Hoy Patrimonio is one of the most innovative firm in sector. Manager in Patrimonio Hoy, Spanish Version 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
– Hoy Patrimonio has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Patrimonio Hoy, Spanish Version 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.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Hoy Patrimonio digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Hoy Patrimonio has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Weaknesses Patrimonio Hoy, Spanish Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Patrimonio Hoy, Spanish Version are -
Slow decision making process
– As mentioned earlier in the report, Hoy Patrimonio 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. Hoy Patrimonio 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Patrimonio Hoy, Spanish Version, is just above the industry average. Hoy Patrimonio needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
No frontier risks strategy
– After analyzing the HBR case study Patrimonio Hoy, Spanish Version, it seems that company is thinking about the frontier risks that can impact Innovation & Entrepreneurship 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 Hoy Patrimonio is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Hoy Patrimonio needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Hoy Patrimonio to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Hoy Patrimonio 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.
Aligning sales with marketing
– It come across in the case study Patrimonio Hoy, Spanish Version 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 Patrimonio Hoy, Spanish Version can leverage the sales team experience to cultivate customer relationships as Hoy Patrimonio is planning to shift buying processes online.
Interest costs
– Compare to the competition, Hoy Patrimonio 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.
Products dominated business model
– Even though Hoy Patrimonio 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 - Patrimonio Hoy, Spanish Version should strive to include more intangible value offerings along with its core products and services.
Capital Spending Reduction
– Even during the low interest decade, Hoy Patrimonio has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Workers concerns about automation
– As automation is fast increasing in the segment, Hoy Patrimonio 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Patrimonio Hoy, Spanish Version 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 Hoy Patrimonio has relatively successful track record of launching new products.
Opportunities Patrimonio Hoy, Spanish Version | 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 Patrimonio Hoy, Spanish Version are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Hoy Patrimonio 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 Hoy Patrimonio to hire the very best people irrespective of their geographical location.
Learning at scale
– Online learning technologies has now opened space for Hoy Patrimonio 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.
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 Hoy Patrimonio 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Innovation & Entrepreneurship industry, but it has also influenced the consumer preferences. Hoy Patrimonio can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Hoy Patrimonio is facing challenges because of the dominance of functional experts in the organization. Patrimonio Hoy, Spanish Version 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.
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. Hoy Patrimonio can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Low interest rates
– Even though inflation is raising its head in most developed economies, Hoy Patrimonio 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Hoy Patrimonio in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Innovation & Entrepreneurship segment, and it will provide faster access to the consumers.
Using analytics as competitive advantage
– Hoy Patrimonio 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 Patrimonio Hoy, Spanish Version - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Hoy Patrimonio to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Hoy Patrimonio can use the latest technology developments to improve its manufacturing and designing process in Innovation & Entrepreneurship 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.
Leveraging digital technologies
– Hoy Patrimonio 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Hoy Patrimonio can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Innovation & Entrepreneurship industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Hoy Patrimonio 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. Hoy Patrimonio 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.
Threats Patrimonio Hoy, Spanish Version External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Patrimonio Hoy, Spanish Version are -
Environmental challenges
– Hoy Patrimonio 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. Hoy Patrimonio can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Hoy Patrimonio can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Hoy Patrimonio has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Hoy Patrimonio needs to keep up with the evolution of technology in the Innovation & Entrepreneurship 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Patrimonio Hoy, Spanish Version, Hoy Patrimonio may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Innovation & Entrepreneurship .
Shortening product life cycle
– it is one of the major threat that Hoy Patrimonio is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Hoy Patrimonio in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Regulatory challenges
– Hoy Patrimonio 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 Innovation & Entrepreneurship industry regulations.
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 Hoy Patrimonio.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Hoy Patrimonio 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 Patrimonio Hoy, Spanish Version .
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. Hoy Patrimonio 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Hoy Patrimonio with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Hoy Patrimonio 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.
Increasing wage structure of Hoy Patrimonio
– 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 Hoy Patrimonio.
Weighted SWOT Analysis of Patrimonio Hoy, Spanish Version 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 Patrimonio Hoy, Spanish Version 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 Patrimonio Hoy, Spanish Version 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 Patrimonio Hoy, Spanish Version 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 Patrimonio Hoy, Spanish Version 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 Hoy Patrimonio needs to make to build a sustainable competitive advantage.