Based on various researches at Oak Spring University , Brookfield Asset Management is operating in a macro-environment that has been destablized by – technology disruption, there is backlash against globalization, talent flight as more people leaving formal jobs, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, wage bills are increasing,
banking and financial system is disrupted by Bitcoin and other crypto currencies, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Brookfield Asset Management
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Brookfield Asset Management can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Brookfield Asset Management, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Brookfield Asset Management 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 Brookfield Asset Management can be done for the following purposes –
1. Strategic planning of Brookfield Asset Management
2. Improving business portfolio management of Brookfield Asset Management
3. Assessing feasibility of the new initiative in United Kingdom
4. Making a Real Estate Operations sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Brookfield Asset Management
Strengths of Brookfield Asset Management | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Brookfield Asset Management are -
Innovation driven organization
– Brookfield Asset Management is one of the most innovative firm in Real Estate Operations sector.
High switching costs
– The high switching costs that Brookfield Asset Management 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
– Brookfield Asset Management has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Brookfield Asset Management to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Brookfield Asset Management 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.
Effective Research and Development (R&D)
– Brookfield Asset Management has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Brookfield Asset Management 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.
Diverse revenue streams
– Brookfield Asset Management is present in almost all the verticals within the Real Estate Operations industry. This has provided Brookfield Asset Management 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.
Training and development
– Brookfield Asset Management 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.
Highly skilled collaborators
– Brookfield Asset Management 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 Brookfield Asset Management have helped the firm to develop new products and bring them quickly to the marketplace.
Superior customer experience
– The customer experience strategy of Brookfield Asset Management in Real Estate Operations industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Real Estate Operations industry
- digital transformation varies from industry to industry. For Brookfield Asset Management digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Brookfield Asset Management 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.
Strong track record of project management in the Real Estate Operations industry
– Brookfield Asset Management is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Low bargaining power of suppliers
– Suppliers of Brookfield Asset Management in the Services sector have low bargaining power. Brookfield Asset Management has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Brookfield Asset Management to manage not only supply disruptions but also source products at highly competitive prices.
Weaknesses of Brookfield Asset Management | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Brookfield Asset Management are -
Skills based hiring in Real Estate Operations industry
– The stress on hiring functional specialists at Brookfield Asset Management 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.
No frontier risks strategy
– From the 10K / annual statement of Brookfield Asset Management, it seems that company is thinking out the frontier risks that can impact Real Estate Operations industry. 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.
Capital Spending Reduction
– Even during the low interest decade, Brookfield Asset Management 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.
Increasing silos among functional specialists
– The organizational structure of Brookfield Asset Management is dominated by functional specialists. It is not different from other players in the Real Estate Operations industry, but Brookfield Asset Management needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Brookfield Asset Management to focus more on services in the Real Estate Operations industry rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the Real Estate Operations industry, Brookfield Asset Management 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.
Compensation and incentives
– The revenue per employee of Brookfield Asset Management is just above the Real Estate Operations 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.
High operating costs
– Compare to the competitors, Brookfield Asset Management 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 Brookfield Asset Management lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative at Brookfield Asset Management, in the dynamic environment of Real Estate Operations industry it has struggled to respond to the nimble upstart competition. Brookfield Asset Management has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Brookfield Asset Management has a high cash cycle compare to other players in the Real Estate Operations industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High dependence on Brookfield Asset Management ‘s star products
– The top 2 products and services of Brookfield Asset Management still accounts for major business revenue. This dependence on star products in Real Estate Operations industry has resulted into insufficient focus on developing new products, even though Brookfield Asset Management has relatively successful track record of launching new products.
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 Brookfield Asset Management supply chain. Even after few cautionary changes, Brookfield Asset Management is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Brookfield Asset Management vulnerable to further global disruptions in South East Asia.
Brookfield Asset Management Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Brookfield Asset Management are -
Using analytics as competitive advantage
– Brookfield Asset Management has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in Real Estate Operations sector. This continuous investment in analytics has enabled Brookfield Asset Management to build a competitive advantage using analytics. The analytics driven competitive advantage can help Brookfield Asset Management to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Brookfield Asset Management 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.
Creating value in data economy
– The success of analytics program of Brookfield Asset Management has opened avenues for new revenue streams for the organization in Real Estate Operations industry. This can help Brookfield Asset Management to build a more holistic ecosystem for Brookfield Asset Management products in the Real Estate Operations industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Manufacturing automation
– Brookfield Asset Management 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.
Loyalty marketing
– Brookfield Asset Management 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Brookfield Asset Management can use these opportunities to build new business models that can help the communities that Brookfield Asset Management operates in. Secondly it can use opportunities from government spending in Real Estate Operations sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Brookfield Asset Management can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Real Estate Operations industry, but it has also influenced the consumer preferences. Brookfield Asset Management can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the Real Estate Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Brookfield Asset Management 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. Brookfield Asset Management 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.
Leveraging digital technologies
– Brookfield Asset Management 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Brookfield Asset Management is facing challenges because of the dominance of functional experts in the organization. Brookfield Asset Management can utilize new technology in the field of Real Estate Operations industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Buying journey improvements
– Brookfield Asset Management 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.
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 Brookfield Asset Management 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 Brookfield Asset Management External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Brookfield Asset Management 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 Brookfield Asset Management in the Real Estate Operations sector and impact the bottomline of the organization.
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. Brookfield Asset Management 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Brookfield Asset Management 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 Brookfield Asset Management prominent markets.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Brookfield Asset Management 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.
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.
Environmental challenges
– Brookfield Asset Management 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. Brookfield Asset Management can take advantage of this fund but it will also bring new competitors in the Real Estate Operations industry.
Regulatory challenges
– Brookfield Asset Management 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.
High dependence on third party suppliers
– Brookfield Asset Management 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.
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. Brookfield Asset Management can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Brookfield Asset Management is facing in Real Estate Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Brookfield Asset Management 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.
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 Brookfield Asset Management business can come under increasing regulations regarding data privacy, data security, etc.
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 Brookfield Asset Management.
Weighted SWOT Analysis of Brookfield Asset Management Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Brookfield Asset Management 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 Brookfield Asset Management 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 Brookfield Asset Management 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 Brookfield Asset Management 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 Brookfield Asset Management needs to make to build a sustainable competitive advantage.
