Grupo SALA - Improving Lives, Spaces and the Environment SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Innovation & Entrepreneurship
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Grupo SALA - Improving Lives, Spaces and the Environment
The Grupo SALA case focuses on entrepreneur Humberto Rodriguez's venture based in Bogota, Colombia. Rodriguez saw an opportunity in the environmental-solutions space when the Colombian government decided to privatize public services. Rodriguez started his venture in 1997 in a 62-square-meter office with an investment of $100,000 by a U.S.-based investor. By June 2015, the time of the case, Grupo SALA operated in three areas-solid waste, dangerous residues, and water and sewer-and had grown at an average rate of 21.3% over the 2002-2014 period. The group drew on three foundations-entrepreneurship, technology innovation and regulatory management, and successful environmental management-and, with 3,270 employees working in eighteen companies, recorded Colombian pesos 256 billion in revenue in 2014 (US$128 million at 2014 conversion rate of 1 Colombian Peso = US$0.0005). After a quick introduction, the case takes the reader through the following six sections: (1) Rodriguez's personal background and approach to risk-taking and entrepreneurship; (2) a window into Grupo SALA's businesses, organizational structure, and ownership; (3) the group's opportunities transforming Colombian attitudes and behavior toward waste, the introduction of containerization, the incineration of hazardous waste, water treatment, and the eventual end game around sustainability and improved lives, spaces, and the environment; (4) Rodriguez's and Grupo SALA's approach to management; (5) the staging of a first "shark tank" to encourage ideas to fuel Grupo SALA's future growth; and (6) Rodriguez's questions for his group regarding the road ahead.
Swot Analysis of "Grupo SALA - Improving Lives, Spaces and the Environment" written by Anirudh Dhebar includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Grupo Rodriguez's facing as an external strategic factors. Some of the topics covered in Grupo SALA - Improving Lives, Spaces and the Environment case study are - Strategic Management Strategies, Sustainability and Innovation & Entrepreneurship.
Some of the macro environment factors that can be used to understand the Grupo SALA - Improving Lives, Spaces and the Environment casestudy better are - – there is backlash against globalization, wage bills are increasing, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, increasing energy prices, increasing government debt because of Covid-19 spendings,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing commodity prices, etc
Introduction to SWOT Analysis of Grupo SALA - Improving Lives, Spaces and the Environment
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Grupo SALA - Improving Lives, Spaces and the Environment case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Grupo Rodriguez's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Grupo Rodriguez's 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 Grupo SALA - Improving Lives, Spaces and the Environment can be done for the following purposes –
1. Strategic planning using facts provided in Grupo SALA - Improving Lives, Spaces and the Environment case study
2. Improving business portfolio management of Grupo Rodriguez's
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 Grupo Rodriguez's
Strengths Grupo SALA - Improving Lives, Spaces and the Environment | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Grupo Rodriguez's in Grupo SALA - Improving Lives, Spaces and the Environment Harvard Business Review case study are -
Highly skilled collaborators
– Grupo Rodriguez's 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 Grupo SALA - Improving Lives, Spaces and the Environment HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Grupo Rodriguez's 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 Anirudh Dhebar 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.
Ability to lead change in Innovation & Entrepreneurship field
– Grupo Rodriguez's 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 Grupo Rodriguez's 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
– Grupo SALA - Improving Lives, Spaces and the Environment firm has clearly differentiated products in the market place. This has enabled Grupo Rodriguez's to fetch slight price premium compare to the competitors in the Innovation & Entrepreneurship industry. The sustainable margins have also helped Grupo Rodriguez's to invest into research and development (R&D) and innovation.
Ability to recruit top talent
– Grupo Rodriguez's is one of the leading recruiters in the industry. Managers in the Grupo SALA - Improving Lives, Spaces and the Environment are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Grupo Rodriguez's is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Grupo Rodriguez's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Grupo Rodriguez's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Digital Transformation in Innovation & Entrepreneurship segment
- digital transformation varies from industry to industry. For Grupo Rodriguez's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Grupo Rodriguez's 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.
Diverse revenue streams
– Grupo Rodriguez's is present in almost all the verticals within the industry. This has provided firm in Grupo SALA - Improving Lives, Spaces and the Environment 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.
Effective Research and Development (R&D)
– Grupo Rodriguez's 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 Grupo SALA - Improving Lives, Spaces and the Environment - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Grupo Rodriguez's 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.
Low bargaining power of suppliers
– Suppliers of Grupo Rodriguez's in the sector have low bargaining power. Grupo SALA - Improving Lives, Spaces and the Environment has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Grupo Rodriguez's to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses Grupo SALA - Improving Lives, Spaces and the Environment | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Grupo SALA - Improving Lives, Spaces and the Environment are -
Low market penetration in new markets
– Outside its home market of Grupo Rodriguez's, firm in the HBR case study Grupo SALA - Improving Lives, Spaces and the Environment needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Products dominated business model
– Even though Grupo Rodriguez's 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 - Grupo SALA - Improving Lives, Spaces and the Environment should strive to include more intangible value offerings along with its core products and services.
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 Grupo Rodriguez's supply chain. Even after few cautionary changes mentioned in the HBR case study - Grupo SALA - Improving Lives, Spaces and the Environment, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Grupo Rodriguez's vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Grupo SALA - Improving Lives, Spaces and the Environment, is just above the industry average. Grupo Rodriguez's needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High operating costs
– Compare to the competitors, firm in the HBR case study Grupo SALA - Improving Lives, Spaces and the Environment 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 Grupo Rodriguez's 's lucrative customers.
Aligning sales with marketing
– It come across in the case study Grupo SALA - Improving Lives, Spaces and the Environment 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 Grupo SALA - Improving Lives, Spaces and the Environment can leverage the sales team experience to cultivate customer relationships as Grupo Rodriguez's is planning to shift buying processes online.
High cash cycle compare to competitors
Grupo Rodriguez's 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.
Slow to strategic competitive environment developments
– As Grupo SALA - Improving Lives, Spaces and the Environment HBR case study mentions - Grupo Rodriguez's 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.
No frontier risks strategy
– After analyzing the HBR case study Grupo SALA - Improving Lives, Spaces and the Environment, 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Grupo SALA - Improving Lives, Spaces and the Environment, in the dynamic environment Grupo Rodriguez's has struggled to respond to the nimble upstart competition. Grupo Rodriguez's has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Grupo Rodriguez's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Grupo SALA - Improving Lives, Spaces and the Environment can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Grupo SALA - Improving Lives, Spaces and the Environment | 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 Grupo SALA - Improving Lives, Spaces and the Environment are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Grupo Rodriguez's 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 Grupo Rodriguez's in the consumer business. Now Grupo Rodriguez's can target international markets with far fewer capital restrictions requirements than the existing system.
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. Grupo Rodriguez's can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Grupo Rodriguez's 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, Grupo SALA - Improving Lives, Spaces and the Environment, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Creating value in data economy
– The success of analytics program of Grupo Rodriguez's has opened avenues for new revenue streams for the organization in the industry. This can help Grupo Rodriguez's to build a more holistic ecosystem as suggested in the Grupo SALA - Improving Lives, Spaces and the Environment case study. Grupo Rodriguez's can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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. Grupo Rodriguez's 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. Grupo Rodriguez's 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.
Using analytics as competitive advantage
– Grupo Rodriguez's 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 Grupo SALA - Improving Lives, Spaces and the Environment - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Grupo Rodriguez's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Grupo Rodriguez's 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.
Manufacturing automation
– Grupo Rodriguez's 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.
Better consumer reach
– The expansion of the 5G network will help Grupo Rodriguez's to increase its market reach. Grupo Rodriguez's 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 Grupo Rodriguez's 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 Grupo Rodriguez's 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 Grupo Rodriguez's to hire the very best people irrespective of their geographical location.
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 Grupo Rodriguez's 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.
Threats Grupo SALA - Improving Lives, Spaces and the Environment External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Grupo SALA - Improving Lives, Spaces and the Environment are -
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 Grupo Rodriguez's in the Innovation & Entrepreneurship sector and impact the bottomline of the organization.
Increasing wage structure of Grupo Rodriguez's
– 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 Grupo Rodriguez's.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Grupo Rodriguez's 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 Grupo SALA - Improving Lives, Spaces and the Environment .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Grupo SALA - Improving Lives, Spaces and the Environment, Grupo Rodriguez's 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 .
Environmental challenges
– Grupo Rodriguez's 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. Grupo Rodriguez's can take advantage of this fund but it will also bring new competitors in the Innovation & Entrepreneurship industry.
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 Grupo Rodriguez's business can come under increasing regulations regarding data privacy, data security, etc.
Easy access to finance
– Easy access to finance in Innovation & Entrepreneurship field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Grupo Rodriguez's can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Grupo Rodriguez's 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.
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. Grupo Rodriguez's will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Grupo Rodriguez's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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 Grupo Rodriguez's.
Weighted SWOT Analysis of Grupo SALA - Improving Lives, Spaces and the Environment 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 Grupo SALA - Improving Lives, Spaces and the Environment 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 Grupo SALA - Improving Lives, Spaces and the Environment 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 Grupo SALA - Improving Lives, Spaces and the Environment 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 Grupo SALA - Improving Lives, Spaces and the Environment 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 Grupo Rodriguez's needs to make to build a sustainable competitive advantage.
