Pro-invest: How to Launch a Private Equity Real Estate Fund SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Pro-invest: How to Launch a Private Equity Real Estate Fund
The case describes how the Pro-invest Group - a boutique investment firm specialising in private equity real estate and real estate asset management - built its business and raised a first-time private equity fund. The Pro-invest founders had boot-strapped the business since its inception in 2013, but in-house funds were running out by mid-2014 and they needed third-party capital to take the venture to the next level. After deciding on a suitable fund structure, the Pro-invest team hits the fundraising trail. Turmoil erupts when a potential investor pulls out at the last minute, leaving the team in shock to re-evaluate its fundraising options. The case explores the pros and cons of each option in detail. Please visit the dedicated case website http://cases.insead.edu/pro-invest to access supplementary material.
Swot Analysis of "Pro-invest: How to Launch a Private Equity Real Estate Fund" written by Anne-Marie Carrick, Bowen White, Claudia Zeisberger includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Pro Invest facing as an external strategic factors. Some of the topics covered in Pro-invest: How to Launch a Private Equity Real Estate Fund case study are - Strategic Management Strategies, Marketing, Recession and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Pro-invest: How to Launch a Private Equity Real Estate Fund casestudy better are - – cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, increasing commodity prices, there is increasing trade war between United States & China, wage bills are increasing, digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion,
increasing government debt because of Covid-19 spendings, geopolitical disruptions, etc
Introduction to SWOT Analysis of Pro-invest: How to Launch a Private Equity Real Estate Fund
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Pro-invest: How to Launch a Private Equity Real Estate Fund case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Pro Invest, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Pro Invest 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 Pro-invest: How to Launch a Private Equity Real Estate Fund can be done for the following purposes –
1. Strategic planning using facts provided in Pro-invest: How to Launch a Private Equity Real Estate Fund case study
2. Improving business portfolio management of Pro Invest
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 Pro Invest
Strengths Pro-invest: How to Launch a Private Equity Real Estate Fund | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Pro Invest in Pro-invest: How to Launch a Private Equity Real Estate Fund Harvard Business Review case study are -
Successful track record of launching new products
– Pro Invest has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Pro Invest 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
– Pro Invest is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Pro Invest 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 Pro-invest: How to Launch a Private Equity Real Estate Fund - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Highly skilled collaborators
– Pro Invest 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 Pro-invest: How to Launch a Private Equity Real Estate Fund HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Diverse revenue streams
– Pro Invest is present in almost all the verticals within the industry. This has provided firm in Pro-invest: How to Launch a Private Equity Real Estate Fund 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.
Organizational Resilience of Pro Invest
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Pro Invest does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Sustainable margins compare to other players in Innovation & Entrepreneurship industry
– Pro-invest: How to Launch a Private Equity Real Estate Fund firm has clearly differentiated products in the market place. This has enabled Pro Invest to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Pro Invest to invest into research and development (R&D) and innovation.
Learning organization
- Pro Invest 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 Pro Invest is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Pro-invest: How to Launch a Private Equity Real Estate Fund Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Pro Invest is one of the most innovative firm in sector. Manager in Pro-invest: How to Launch a Private Equity Real Estate Fund Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Analytics focus
– Pro Invest is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Anne-Marie Carrick, Bowen White, Claudia Zeisberger 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.
High switching costs
– The high switching costs that Pro Invest 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.
Training and development
– Pro Invest has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Pro-invest: How to Launch a Private Equity Real Estate Fund 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 Pro-invest: How to Launch a Private Equity Real Estate Fund | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Pro-invest: How to Launch a Private Equity Real Estate Fund are -
High operating costs
– Compare to the competitors, firm in the HBR case study Pro-invest: How to Launch a Private Equity Real Estate Fund 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 Pro Invest 's lucrative customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Pro Invest 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
– Pro Invest 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.
Lack of clear differentiation of Pro Invest products
– To increase the profitability and margins on the products, Pro Invest needs to provide more differentiated products than what it is currently offering in the marketplace.
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 Pro Invest supply chain. Even after few cautionary changes mentioned in the HBR case study - Pro-invest: How to Launch a Private Equity Real Estate Fund, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Pro Invest 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 Pro-invest: How to Launch a Private Equity Real Estate Fund 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 Pro Invest has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Pro Invest is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Pro-invest: How to Launch a Private Equity Real Estate Fund can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– It come across in the case study Pro-invest: How to Launch a Private Equity Real Estate Fund 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 Pro-invest: How to Launch a Private Equity Real Estate Fund can leverage the sales team experience to cultivate customer relationships as Pro Invest is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Pro Invest, firm in the HBR case study Pro-invest: How to Launch a Private Equity Real Estate Fund needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Pro-invest: How to Launch a Private Equity Real Estate Fund, in the dynamic environment Pro Invest has struggled to respond to the nimble upstart competition. Pro Invest has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Pro Invest is dominated by functional specialists. It is not different from other players in the Innovation & Entrepreneurship segment. Pro Invest needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Pro Invest to focus more on services rather than just following the product oriented approach.
Opportunities Pro-invest: How to Launch a Private Equity Real Estate Fund | 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 Pro-invest: How to Launch a Private Equity Real Estate Fund are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Pro Invest is facing challenges because of the dominance of functional experts in the organization. Pro-invest: How to Launch a Private Equity Real Estate Fund 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.
Leveraging digital technologies
– Pro Invest 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Pro Invest 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, Pro-invest: How to Launch a Private Equity Real Estate Fund, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Pro Invest 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.
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. Pro Invest 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. Pro Invest 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Pro Invest 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 Pro Invest to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Pro Invest 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Pro Invest 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Pro Invest can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Pro Invest can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Pro-invest: How to Launch a Private Equity Real Estate Fund 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.
Developing new processes and practices
– Pro Invest 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.
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 Pro Invest in the consumer business. Now Pro Invest can target international markets with far fewer capital restrictions requirements than the existing system.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Pro Invest can use these opportunities to build new business models that can help the communities that Pro Invest operates in. Secondly it can use opportunities from government spending in Innovation & Entrepreneurship sector.
Threats Pro-invest: How to Launch a Private Equity Real Estate Fund External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Pro-invest: How to Launch a Private Equity Real Estate Fund are -
Regulatory challenges
– Pro Invest 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.
Shortening product life cycle
– it is one of the major threat that Pro Invest is facing in Innovation & Entrepreneurship sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Pro Invest has witnessed rapid integration of technology during Covid-19 in the Innovation & Entrepreneurship industry. As one of the leading players in the industry, Pro Invest 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 Pro-invest: How to Launch a Private Equity Real Estate Fund, Pro Invest 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 .
High dependence on third party suppliers
– Pro Invest 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.
Increasing wage structure of Pro Invest
– 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 Pro Invest.
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 Pro Invest business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Pro Invest 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.
Environmental challenges
– Pro Invest 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. Pro Invest 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, Pro Invest 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 Pro-invest: How to Launch a Private Equity Real Estate Fund .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Pro Invest 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.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Weighted SWOT Analysis of Pro-invest: How to Launch a Private Equity Real Estate Fund 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 Pro-invest: How to Launch a Private Equity Real Estate Fund 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 Pro-invest: How to Launch a Private Equity Real Estate Fund 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 Pro-invest: How to Launch a Private Equity Real Estate Fund 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 Pro-invest: How to Launch a Private Equity Real Estate Fund 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 Pro Invest needs to make to build a sustainable competitive advantage.
