CEMEX's Patrimonio Hoy: At the Tipping Point? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of CEMEX's Patrimonio Hoy: At the Tipping Point?
This case sets the stage for the 2012 case study "Constructing a Base-of-the-Pyramid Business in a Multinational Corporation: CEMEX's Patrimonio Hoy Looks to Grow." This revised 2006 case study explores Patrimonio Hoy in 2006, the sales, distribution, and savings program of CEMEX intended to serve Mexico's large self-construction housing market. CEMEX is currently the world's third largest cement producer. Over the years, Patrimonio Hoy has gone from a small, centrally-funded project to a US$25 million revenue generator for CEMEX. This case explores the initiative's opportunities for growth and expansion into new markets.
Swot Analysis of "CEMEX's Patrimonio Hoy: At the Tipping Point?" written by Ted London 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 CEMEX's Patrimonio Hoy: At the Tipping Point? case study are - Strategic Management Strategies, Social responsibility and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the CEMEX's Patrimonio Hoy: At the Tipping Point? casestudy better are - – technology disruption, increasing transportation and logistics costs, increasing household debt because of falling income levels, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, increasing government debt because of Covid-19 spendings, geopolitical disruptions,
cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, etc
Introduction to SWOT Analysis of CEMEX's Patrimonio Hoy: At the Tipping Point?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in CEMEX's Patrimonio Hoy: At the Tipping Point? 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 CEMEX's Patrimonio Hoy: At the Tipping Point? can be done for the following purposes –
1. Strategic planning using facts provided in CEMEX's Patrimonio Hoy: At the Tipping Point? 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 CEMEX's Patrimonio Hoy: At the Tipping Point? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Hoy Patrimonio in CEMEX's Patrimonio Hoy: At the Tipping Point? Harvard Business Review case study are -
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 CEMEX's Patrimonio Hoy: At the Tipping Point? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Analytics focus
– Hoy Patrimonio 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 Ted London 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.
Diverse revenue streams
– Hoy Patrimonio is present in almost all the verticals within the industry. This has provided firm in CEMEX's Patrimonio Hoy: At the Tipping Point? 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.
Low bargaining power of suppliers
– Suppliers of Hoy Patrimonio in the sector have low bargaining power. CEMEX's Patrimonio Hoy: At the Tipping Point? 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.
High switching costs
– The high switching costs that Hoy Patrimonio 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.
Effective Research and Development (R&D)
– Hoy Patrimonio 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 CEMEX's Patrimonio Hoy: At the Tipping Point? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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 CEMEX's Patrimonio Hoy: At the Tipping Point? 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.
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.
Operational resilience
– The operational resilience strategy in the CEMEX's Patrimonio Hoy: At the Tipping Point? 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.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– CEMEX's Patrimonio Hoy: At the Tipping Point? 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.
Organizational Resilience of Hoy Patrimonio
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Hoy Patrimonio does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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 CEMEX's Patrimonio Hoy: At the Tipping Point? HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses CEMEX's Patrimonio Hoy: At the Tipping Point? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of CEMEX's Patrimonio Hoy: At the Tipping Point? are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the CEMEX's Patrimonio Hoy: At the Tipping Point? 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.
High operating costs
– Compare to the competitors, firm in the HBR case study CEMEX's Patrimonio Hoy: At the Tipping Point? 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 Hoy Patrimonio 's lucrative customers.
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 - CEMEX's Patrimonio Hoy: At the Tipping Point? 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.
No frontier risks strategy
– After analyzing the HBR case study CEMEX's Patrimonio Hoy: At the Tipping Point?, 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Hoy Patrimonio is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study CEMEX's Patrimonio Hoy: At the Tipping Point? 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 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.
Need for greater diversity
– Hoy Patrimonio 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.
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.
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 Hoy Patrimonio supply chain. Even after few cautionary changes mentioned in the HBR case study - CEMEX's Patrimonio Hoy: At the Tipping Point?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Hoy Patrimonio vulnerable to further global disruptions in South East Asia.
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.
Opportunities CEMEX's Patrimonio Hoy: At the Tipping Point? | 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 CEMEX's Patrimonio Hoy: At the Tipping Point? are -
Buying journey improvements
– Hoy Patrimonio can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. CEMEX's Patrimonio Hoy: At the Tipping Point? 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Hoy Patrimonio can use these opportunities to build new business models that can help the communities that Hoy Patrimonio operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
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. CEMEX's Patrimonio Hoy: At the Tipping Point? 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.
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.
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.
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.
Developing new processes and practices
– Hoy Patrimonio can develop new processes and procedures in Innovation & Entrepreneurship 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.
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.
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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Hoy Patrimonio 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, CEMEX's Patrimonio Hoy: At the Tipping Point?, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Threats CEMEX's Patrimonio Hoy: At the Tipping Point? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study CEMEX's Patrimonio Hoy: At the Tipping Point? are -
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. Hoy Patrimonio needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
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.
High dependence on third party suppliers
– Hoy Patrimonio 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.
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.
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.
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.
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. 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.
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.
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.
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 CEMEX's Patrimonio Hoy: At the Tipping Point? .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study CEMEX's Patrimonio Hoy: At the Tipping Point?, 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 .
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.
Weighted SWOT Analysis of CEMEX's Patrimonio Hoy: At the Tipping Point? 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 CEMEX's Patrimonio Hoy: At the Tipping Point? 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 CEMEX's Patrimonio Hoy: At the Tipping Point? 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 CEMEX's Patrimonio Hoy: At the Tipping Point? 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 CEMEX's Patrimonio Hoy: At the Tipping Point? 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.