Based on various researches at Oak Spring University , Aeon Reit is operating in a macro-environment that has been destablized by – supply chains are disrupted by pandemic , wage bills are increasing, increasing household debt because of falling income levels, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, increasing inequality as vast percentage of new income is going to the top 1%,
talent flight as more people leaving formal jobs, there is backlash against globalization, etc
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Aeon Reit can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Aeon Reit, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Aeon Reit 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 Aeon Reit can be done for the following purposes –
1. Strategic planning of Aeon Reit
2. Improving business portfolio management of Aeon Reit
3. Assessing feasibility of the new initiative in Japan
4. Making a Real Estate Operations sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Aeon Reit
Strengths of Aeon Reit | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Aeon Reit are -
Cross disciplinary teams
– Horizontal connected teams at the Aeon Reit 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.
Analytics focus
– Aeon Reit 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 Real Estate Operations industry. The technology infrastructure of Japan 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.
Organizational Resilience of Aeon Reit
– The covid-19 pandemic has put organizational resilience at the centre of everthing Aeon Reit does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Aeon Reit has one of the best training and development program in Services industry. The effectiveness of the training programs can be measured in – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Digital Transformation in Real Estate Operations industry
- digital transformation varies from industry to industry. For Aeon Reit digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Aeon Reit 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.
Innovation driven organization
– Aeon Reit is one of the most innovative firm in Real Estate Operations sector.
Ability to lead change in Real Estate Operations
– Aeon Reit is one of the leading players in the Real Estate Operations industry in Japan. Over the years it has not only transformed the business landscape in the Real Estate Operations industry in Japan but also across the existing markets. The ability to lead change has enabled Aeon Reit in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Operational resilience
– The operational resilience strategy of Aeon Reit comprises – understanding the underlying the factors in the Real Estate Operations 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.
Effective Research and Development (R&D)
– Aeon Reit has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Aeon Reit staying ahead in the Real Estate Operations industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Aeon Reit is one of the leading players in the Real Estate Operations industry in Japan. It is in a position to attract the best talent available in Japan. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Aeon Reit has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive Real Estate Operations industry. Secondly the value chain collaborators of Aeon Reit have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Aeon Reit 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 Aeon Reit is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Aeon Reit emphasize – knowledge, initiative, and innovation.
Weaknesses of Aeon Reit | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Aeon Reit are -
Aligning sales with marketing
– From the outside it seems that Aeon Reit needs to have more collaboration between its sales team and marketing team. Sales professionals in the Real Estate Operations industry have deep experience in developing customer relationships. Marketing department at Aeon Reit can leverage the sales team experience to cultivate customer relationships as Aeon Reit is planning to shift buying processes online.
Slow decision making process
– As mentioned earlier in the report, Aeon Reit has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the Real Estate Operations industry over the last five years. Aeon Reit 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.
Low market penetration in new markets
– Outside its home market of Japan, Aeon Reit needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Skills based hiring in Real Estate Operations industry
– The stress on hiring functional specialists at Aeon Reit 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.
Workers concerns about automation
– As automation is fast increasing in the Real Estate Operations industry, Aeon Reit 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.
Employees’ less understanding of Aeon Reit strategy
– From the outside it seems that the employees of Aeon Reit 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.
Interest costs
– Compare to the competition, Aeon Reit 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.
Ability to respond to the competition
– As the decision making is very deliberative at Aeon Reit, in the dynamic environment of Real Estate Operations industry it has struggled to respond to the nimble upstart competition. Aeon Reit has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to strategic competitive environment developments
– As Aeon Reit is one of the leading players in the Real Estate Operations industry, it takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the Real Estate Operations industry in last five years.
Capital Spending Reduction
– Even during the low interest decade, Aeon Reit has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the Real Estate Operations industry using digital technology.
High operating costs
– Compare to the competitors, Aeon Reit has high operating costs in the Real Estate Operations industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Aeon Reit lucrative customers.
Aeon Reit Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Aeon Reit are -
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. Aeon Reit can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Aeon Reit can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Aeon Reit 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Aeon Reit in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Real Estate Operations industry, and it will provide faster access to the consumers.
Better consumer reach
– The expansion of the 5G network will help Aeon Reit to increase its market reach. Aeon Reit 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Aeon Reit 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 Aeon Reit to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Aeon Reit can use the latest technology developments to improve its manufacturing and designing process in Real Estate Operations sector. 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.
Learning at scale
– Online learning technologies has now opened space for Aeon Reit 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.
Building a culture of innovation
– managers at Aeon Reit 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 Real Estate Operations industry.
Loyalty marketing
– Aeon Reit has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Aeon Reit 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 Aeon Reit to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Aeon Reit can use these opportunities to build new business models that can help the communities that Aeon Reit operates in. Secondly it can use opportunities from government spending in Real Estate Operations sector.
Buying journey improvements
– Aeon Reit can improve the customer journey of consumers in the Real Estate Operations 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.
Threats Aeon Reit External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Aeon Reit are -
High dependence on third party suppliers
– Aeon Reit 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.
Shortening product life cycle
– it is one of the major threat that Aeon Reit is facing in Real Estate Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Aeon Reit
– 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 Aeon Reit.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Aeon Reit may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Real Estate Operations sector.
Stagnating economy with rate increase
– Aeon Reit can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the Real Estate Operations industry.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Real Estate Operations industry are lowering. It can presents Aeon Reit with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the Real Estate Operations sector.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Aeon Reit 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.
Regulatory challenges
– Aeon Reit 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 Real Estate Operations industry regulations.
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 Real Estate Operations industry will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Aeon Reit 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
– Aeon Reit has witnessed rapid integration of technology during Covid-19 in the Real Estate Operations industry. As one of the leading players in the industry, Aeon Reit needs to keep up with the evolution of technology in the Real Estate Operations 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. Aeon Reit needs to understand the core reasons impacting the Real Estate Operations industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Aeon Reit Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Aeon Reit 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 Aeon Reit 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 Aeon Reit 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 Aeon Reit 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 Aeon Reit needs to make to build a sustainable competitive advantage.