The Ciputra Group: Shaping the City in Asia SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Ciputra Group: Shaping the City in Asia
The Ciputra Group was set up by Mr. Ciputra in the 1980s, after a long entrepreneurial career with a vision to provide a business for his children. The case describes the development of this group, which evolved into a prominent and innovative player in the Indonesian property sector. Under Ciputra's guidance, the company became known for its satellite cities, in which the group combined technical, construction and urban planning qualities, along with the ability to understand and manoeuvre in the difficult Indonesian environment. The Ciputra Group moved into areas where the government was weak (public facilities, roads, sewerage, city management, security, etc) and as such became an "institutional entrepreneur" that shaped Indonesia's cities. This model was later exported to other emerging markets. The case ends with the company facing two sets of interlinked problems. One set is strategic, as the company's business model has proven to be vulnerable, and it is undergoing various changes. The question is what strategic option the company should choose. The second set of issues concerns the leadership and corporate structure of the group. Since Ciputra is in his late 70s, a generational change in leadership is imminent, and students are asked to reflect on the most appropriate path towards further development of the business from one led by a charismatic entrepreneur towards a professional family business. The two sets of issues are interlinked with each other and pose opportunities and constraints.
Swot Analysis of "The Ciputra Group: Shaping the City in Asia" written by Marleen Dieleman includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ciputra Interlinked facing as an external strategic factors. Some of the topics covered in The Ciputra Group: Shaping the City in Asia case study are - Strategic Management Strategies, Cross-cultural management, Emerging markets, Entrepreneurship, Growth strategy and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the The Ciputra Group: Shaping the City in Asia casestudy better are - – geopolitical disruptions, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies,
challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of The Ciputra Group: Shaping the City in Asia
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Ciputra Group: Shaping the City in Asia case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ciputra Interlinked, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ciputra Interlinked 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 The Ciputra Group: Shaping the City in Asia can be done for the following purposes –
1. Strategic planning using facts provided in The Ciputra Group: Shaping the City in Asia case study
2. Improving business portfolio management of Ciputra Interlinked
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 Ciputra Interlinked
Strengths The Ciputra Group: Shaping the City in Asia | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ciputra Interlinked in The Ciputra Group: Shaping the City in Asia Harvard Business Review case study are -
High switching costs
– The high switching costs that Ciputra Interlinked 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.
Superior customer experience
– The customer experience strategy of Ciputra Interlinked in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Innovation driven organization
– Ciputra Interlinked is one of the most innovative firm in sector. Manager in The Ciputra Group: Shaping the City in Asia Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Diverse revenue streams
– Ciputra Interlinked is present in almost all the verticals within the industry. This has provided firm in The Ciputra Group: Shaping the City in Asia 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.
High brand equity
– Ciputra Interlinked has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ciputra Interlinked to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Successful track record of launching new products
– Ciputra Interlinked has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ciputra Interlinked 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.
Strong track record of project management
– Ciputra Interlinked is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Ciputra Interlinked 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 Ciputra Interlinked is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in The Ciputra Group: Shaping the City in Asia Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Ciputra Interlinked 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.
Effective Research and Development (R&D)
– Ciputra Interlinked 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 The Ciputra Group: Shaping the City in Asia - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Ciputra Interlinked in the sector have low bargaining power. The Ciputra Group: Shaping the City in Asia has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ciputra Interlinked to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Ciputra Interlinked 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 The Ciputra Group: Shaping the City in Asia HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses The Ciputra Group: Shaping the City in Asia | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Ciputra Group: Shaping the City in Asia are -
Capital Spending Reduction
– Even during the low interest decade, Ciputra Interlinked 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, Ciputra Interlinked 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
– Ciputra Interlinked 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.
Slow to strategic competitive environment developments
– As The Ciputra Group: Shaping the City in Asia HBR case study mentions - Ciputra Interlinked takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Products dominated business model
– Even though Ciputra Interlinked 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 - The Ciputra Group: Shaping the City in Asia should strive to include more intangible value offerings along with its core products and services.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The Ciputra Group: Shaping the City in Asia, it seems that the employees of Ciputra Interlinked don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The Ciputra Group: Shaping the City in Asia, in the dynamic environment Ciputra Interlinked has struggled to respond to the nimble upstart competition. Ciputra Interlinked has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study The Ciputra Group: Shaping the City in Asia 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 Ciputra Interlinked 's lucrative customers.
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 Ciputra Interlinked supply chain. Even after few cautionary changes mentioned in the HBR case study - The Ciputra Group: Shaping the City in Asia, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ciputra Interlinked vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the The Ciputra Group: Shaping the City in Asia 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 Ciputra Interlinked has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Ciputra Interlinked has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Opportunities The Ciputra Group: Shaping the City in Asia | 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 The Ciputra Group: Shaping the City in Asia are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ciputra Interlinked 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 Ciputra Interlinked to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Ciputra Interlinked 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 The Ciputra Group: Shaping the City in Asia - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ciputra Interlinked to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Ciputra Interlinked to increase its market reach. Ciputra Interlinked 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.
Learning at scale
– Online learning technologies has now opened space for Ciputra Interlinked 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.
Creating value in data economy
– The success of analytics program of Ciputra Interlinked has opened avenues for new revenue streams for the organization in the industry. This can help Ciputra Interlinked to build a more holistic ecosystem as suggested in the The Ciputra Group: Shaping the City in Asia case study. Ciputra Interlinked can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Ciputra Interlinked 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 Innovation & Entrepreneurship segment.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ciputra Interlinked 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.
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 Ciputra Interlinked in the consumer business. Now Ciputra Interlinked can target international markets with far fewer capital restrictions requirements than the existing system.
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. Ciputra Interlinked 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. Ciputra Interlinked 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ciputra Interlinked can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Ciputra Interlinked 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, Ciputra Interlinked is facing challenges because of the dominance of functional experts in the organization. The Ciputra Group: Shaping the City in Asia 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.
Loyalty marketing
– Ciputra Interlinked 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 The Ciputra Group: Shaping the City in Asia External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Ciputra Group: Shaping the City in Asia are -
Increasing wage structure of Ciputra Interlinked
– 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 Ciputra Interlinked.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ciputra Interlinked with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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. Ciputra Interlinked 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 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.
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 Ciputra Interlinked business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Ciputra Interlinked has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Ciputra Interlinked 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 The Ciputra Group: Shaping the City in Asia, Ciputra Interlinked 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 .
Stagnating economy with rate increase
– Ciputra Interlinked 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ciputra Interlinked in the Innovation & Entrepreneurship industry. The Innovation & Entrepreneurship industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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 Ciputra Interlinked.
High dependence on third party suppliers
– Ciputra Interlinked 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.
Environmental challenges
– Ciputra Interlinked 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. Ciputra Interlinked 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, Ciputra Interlinked 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 The Ciputra Group: Shaping the City in Asia .
Weighted SWOT Analysis of The Ciputra Group: Shaping the City in Asia 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 The Ciputra Group: Shaping the City in Asia 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 The Ciputra Group: Shaping the City in Asia 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 The Ciputra Group: Shaping the City in Asia 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 The Ciputra Group: Shaping the City in Asia 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 Ciputra Interlinked needs to make to build a sustainable competitive advantage.
