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 - – technology disruption, increasing energy prices, talent flight as more people leaving formal jobs, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, increasing commodity prices, increasing transportation and logistics costs,
central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings, 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 -
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Ciputra Interlinked digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ciputra Interlinked 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.
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.
Ability to recruit top talent
– Ciputra Interlinked is one of the leading recruiters in the industry. Managers in the The Ciputra Group: Shaping the City in Asia are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
Organizational Resilience of Ciputra Interlinked
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ciputra Interlinked does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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.
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.
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.
Ability to lead change in Innovation & Entrepreneurship field
– Ciputra Interlinked 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 Ciputra Interlinked in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– The Ciputra Group: Shaping the City in Asia firm has clearly differentiated products in the market place. This has enabled Ciputra Interlinked to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Ciputra Interlinked to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the The Ciputra Group: Shaping the City in Asia 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.
Training and development
– Ciputra Interlinked has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Ciputra Group: Shaping the City in Asia 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.
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 -
Increasing silos among functional specialists
– The organizational structure of Ciputra Interlinked is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Ciputra Interlinked needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ciputra Interlinked to focus more on services rather than just following the product oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ciputra Interlinked is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study The Ciputra Group: Shaping the City in Asia can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
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.
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.
Slow decision making process
– As mentioned earlier in the report, Ciputra Interlinked 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. Ciputra Interlinked 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.
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.
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.
Aligning sales with marketing
– It come across in the case study The Ciputra Group: Shaping the City in Asia 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 The Ciputra Group: Shaping the City in Asia can leverage the sales team experience to cultivate customer relationships as Ciputra Interlinked is planning to shift buying processes online.
High cash cycle compare to competitors
Ciputra Interlinked 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.
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.
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.
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 -
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.
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 Ciputra Interlinked 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.
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.
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.
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.
Manufacturing automation
– Ciputra Interlinked 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
– Ciputra Interlinked 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.
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.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ciputra Interlinked can use these opportunities to build new business models that can help the communities that Ciputra Interlinked operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
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.
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.
Buying journey improvements
– Ciputra Interlinked can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. The Ciputra Group: Shaping the City in Asia 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.
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 -
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.
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.
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. Ciputra Interlinked needs to understand the core reasons impacting the Innovation & Entrepreneurship industry. This will help it in building a better workplace.
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.
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.
Regulatory challenges
– Ciputra Interlinked 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.
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 .
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.
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 .
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 Ciputra Interlinked in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Consumer confidence and its impact on Ciputra Interlinked 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.
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.
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.
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.