Africa Israel Residences (AFRE) SWOT Analysis / TOWS Matrix / MBA Resources

Introduction to SWOT Analysis

SWOT Analysis / TOWS Matrix for Africa Israel Residences (Israel)

Based on various researches at Oak Spring University , Africa Israel Residences is operating in a macro-environment that has been destablized by – increasing household debt because of falling income levels, there is increasing trade war between United States & China, increasing transportation and logistics costs, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, there is backlash against globalization, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, etc

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Introduction to SWOT Analysis of Africa Israel Residences

SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Africa Israel Residences can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Africa Israel Residences, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Africa Israel Residences 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.

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SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix

SWOT analysis of Africa Israel Residences can be done for the following purposes –
1. Strategic planning of Africa Israel Residences
2. Improving business portfolio management of Africa Israel Residences
3. Assessing feasibility of the new initiative in Israel
4. Making a Construction Services sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Africa Israel Residences

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Strengths of Africa Israel Residences | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Africa Israel Residences are -

Effective Research and Development (R&D)

– Africa Israel Residences has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Africa Israel Residences staying ahead in the Construction Services industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

High switching costs

– The high switching costs that Africa Israel Residences 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.

High brand equity

– Africa Israel Residences has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Africa Israel Residences to keep acquiring new customers and building profitable relationship with both the new and loyal customers.

Diverse revenue streams

– Africa Israel Residences is present in almost all the verticals within the Construction Services industry. This has provided Africa Israel Residences 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.

Digital Transformation in Construction Services industry

- digital transformation varies from industry to industry. For Africa Israel Residences digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Africa Israel Residences 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.

Analytics focus

– Africa Israel Residences 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 Construction Services industry. The technology infrastructure of Israel is also helping it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.

Successful track record of launching new products

– Africa Israel Residences has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Africa Israel Residences 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.

Low bargaining power of suppliers

– Suppliers of Africa Israel Residences in the Capital Goods sector have low bargaining power. Africa Israel Residences has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Africa Israel Residences to manage not only supply disruptions but also source products at highly competitive prices.

Organizational Resilience of Africa Israel Residences

– The covid-19 pandemic has put organizational resilience at the centre of everthing Africa Israel Residences does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Strong track record of project management in the Construction Services industry

– Africa Israel Residences is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Sustainable margins compare to other players in Construction Services industry

– Africa Israel Residences has clearly differentiated products in the market place. This has enabled Africa Israel Residences to fetch slight price premium compare to the competitors in the Construction Services industry. The sustainable margins have also helped Africa Israel Residences to invest into research and development (R&D) and innovation.

Superior customer experience

– The customer experience strategy of Africa Israel Residences in Construction Services industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

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Weaknesses of Africa Israel Residences | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Africa Israel Residences are -

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 Africa Israel Residences supply chain. Even after few cautionary changes, Africa Israel Residences is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Africa Israel Residences vulnerable to further global disruptions in South East Asia.

Lack of clear differentiation of Africa Israel Residences products

– To increase the profitability and margins on the products, Africa Israel Residences needs to provide more differentiated products than what it is currently offering in the marketplace.

Slow to strategic competitive environment developments

– As Africa Israel Residences is one of the leading players in the Construction Services industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Construction Services industry in last five years.

Compensation and incentives

– The revenue per employee of Africa Israel Residences is just above the Construction Services industry average. It 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.

Need for greater diversity

– Africa Israel Residences 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.

High dependence on Africa Israel Residences ‘s star products

– The top 2 products and services of Africa Israel Residences still accounts for major business revenue. This dependence on star products in Construction Services industry has resulted into insufficient focus on developing new products, even though Africa Israel Residences has relatively successful track record of launching new products.

High operating costs

– Compare to the competitors, Africa Israel Residences has high operating costs in the Construction Services industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Africa Israel Residences lucrative customers.

Interest costs

– Compare to the competition, Africa Israel Residences has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.

Products dominated business model

– Even though Africa Israel Residences has some of the most successful models in the Construction Services industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Africa Israel Residences should strive to include more intangible value offerings along with its core products and services.

Employees’ less understanding of Africa Israel Residences strategy

– From the outside it seems that the employees of Africa Israel Residences 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.

Slow decision making process

– As mentioned earlier in the report, Africa Israel Residences has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Construction Services industry over the last five years. Africa Israel Residences 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.

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Africa Israel Residences Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The opportunities of Africa Israel Residences are -

Leveraging digital technologies

– Africa Israel Residences 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.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Africa Israel Residences in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Construction Services industry, and it will provide faster access to the consumers.

Creating value in data economy

– The success of analytics program of Africa Israel Residences has opened avenues for new revenue streams for the organization in Construction Services industry. This can help Africa Israel Residences to build a more holistic ecosystem for Africa Israel Residences products in the Construction Services industry by providing – data insight services, data privacy related products, data based consulting services, etc.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Africa Israel Residences can use these opportunities to build new business models that can help the communities that Africa Israel Residences operates in. Secondly it can use opportunities from government spending in Construction Services sector.

Use of Bitcoin and other crypto currencies for transactions in Construction Services industry

– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Africa Israel Residences in the Construction Services industry. Now Africa Israel Residences can target international markets with far fewer capital restrictions requirements than the existing system.

Buying journey improvements

– Africa Israel Residences can improve the customer journey of consumers in the Construction Services industry by using analytics and artificial intelligence. It 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.

Using analytics as competitive advantage

– Africa Israel Residences has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Construction Services sector. This continuous investment in analytics has enabled Africa Israel Residences to build a competitive advantage using analytics. The analytics driven competitive advantage can help Africa Israel Residences to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Africa Israel Residences can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Developing new processes and practices

– Africa Israel Residences can develop new processes and procedures in Construction Services 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.

Harnessing reconfiguration of the global supply chains

– As the trade war between US and China heats up in the coming years, Africa Israel Residences 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 Africa Israel Residences to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.

Better consumer reach

– The expansion of the 5G network will help Africa Israel Residences to increase its market reach. Africa Israel Residences 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.

Identify volunteer opportunities

– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Africa Israel Residences can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Building a culture of innovation

– managers at Africa Israel Residences 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 Construction Services industry.

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Threats Africa Israel Residences External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The threats of Africa Israel Residences are -

Increasing wage structure of Africa Israel Residences

– 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 Africa Israel Residences.

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 Africa Israel Residences business can come under increasing regulations regarding data privacy, data security, etc.

Shortening product life cycle

– it is one of the major threat that Africa Israel Residences is facing in Construction Services sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

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. Africa Israel Residences needs to understand the core reasons impacting the Construction Services industry. This will help it in building a better workplace.

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 Africa Israel Residences in the Construction Services sector and impact the bottomline of the organization.

Consumer confidence and its impact on Africa Israel Residences 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 Construction Services 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.

Easy access to finance

– Easy access to finance in Construction Services industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Africa Israel Residences can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

Technology acceleration in Forth Industrial Revolution

– Africa Israel Residences has witnessed rapid integration of technology during Covid-19 in the Construction Services industry. As one of the leading players in the industry, Africa Israel Residences needs to keep up with the evolution of technology in the Construction Services 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, Africa Israel Residences may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Construction Services sector.

Environmental challenges

– Africa Israel Residences 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. Africa Israel Residences can take advantage of this fund but it will also bring new competitors in the Construction Services industry.

High dependence on third party suppliers

– Africa Israel Residences 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 to Construction Services industry are lowering. It can presents Africa Israel Residences with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Construction Services sector.

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Weighted SWOT Analysis of Africa Israel Residences Template, Example

Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Africa Israel Residences 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 Africa Israel Residences 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 Africa Israel Residences 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 Africa Israel Residences 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 Africa Israel Residences needs to make to build a sustainable competitive advantage.

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