Based on various researches at Oak Spring University , Vinci Shopping Centers FII is operating in a macro-environment that has been destablized by – competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%, there is increasing trade war between United States & China, increasing government debt because of Covid-19 spendings, increasing energy prices,
increasing commodity prices, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Vinci Shopping Centers FII
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Vinci Shopping Centers FII can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Vinci Shopping Centers FII, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Vinci Shopping Centers FII 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 Vinci Shopping Centers FII can be done for the following purposes –
1. Strategic planning of Vinci Shopping Centers FII
2. Improving business portfolio management of Vinci Shopping Centers FII
3. Assessing feasibility of the new initiative in Brazil
4. Making a NA sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Vinci Shopping Centers FII
Strengths of Vinci Shopping Centers FII | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Vinci Shopping Centers FII are -
Analytics focus
– Vinci Shopping Centers FII 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 NA industry. The technology infrastructure of Brazil 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.
Low bargaining power of suppliers
– Suppliers of Vinci Shopping Centers FII in the NA sector have low bargaining power. Vinci Shopping Centers FII has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Vinci Shopping Centers FII to manage not only supply disruptions but also source products at highly competitive prices.
Digital Transformation in NA industry
- digital transformation varies from industry to industry. For Vinci Shopping Centers FII digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Vinci Shopping Centers FII 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 NA industry
– Vinci Shopping Centers FII is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Highly skilled collaborators
– Vinci Shopping Centers FII has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive NA industry. Secondly the value chain collaborators of Vinci Shopping Centers FII have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Vinci Shopping Centers FII 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 Vinci Shopping Centers FII is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Vinci Shopping Centers FII emphasize – knowledge, initiative, and innovation.
Effective Research and Development (R&D)
– Vinci Shopping Centers FII has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Vinci Shopping Centers FII staying ahead in the NA industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to lead change in NA
– Vinci Shopping Centers FII is one of the leading players in the NA industry in Brazil. Over the years it has not only transformed the business landscape in the NA industry in Brazil but also across the existing markets. The ability to lead change has enabled Vinci Shopping Centers FII in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Vinci Shopping Centers FII is present in almost all the verticals within the NA industry. This has provided Vinci Shopping Centers FII 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.
Sustainable margins compare to other players in NA industry
– Vinci Shopping Centers FII has clearly differentiated products in the market place. This has enabled Vinci Shopping Centers FII to fetch slight price premium compare to the competitors in the NA industry. The sustainable margins have also helped Vinci Shopping Centers FII to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Vinci Shopping Centers FII 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.
Organizational Resilience of Vinci Shopping Centers FII
– The covid-19 pandemic has put organizational resilience at the centre of everthing Vinci Shopping Centers FII does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Weaknesses of Vinci Shopping Centers FII | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Vinci Shopping Centers FII are -
Skills based hiring in NA industry
– The stress on hiring functional specialists at Vinci Shopping Centers FII 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.
High operating costs
– Compare to the competitors, Vinci Shopping Centers FII has high operating costs in the NA industry. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Vinci Shopping Centers FII lucrative customers.
Aligning sales with marketing
– From the outside it seems that Vinci Shopping Centers FII needs to have more collaboration between its sales team and marketing team. Sales professionals in the NA industry have deep experience in developing customer relationships. Marketing department at Vinci Shopping Centers FII can leverage the sales team experience to cultivate customer relationships as Vinci Shopping Centers FII is planning to shift buying processes online.
High dependence on Vinci Shopping Centers FII ‘s star products
– The top 2 products and services of Vinci Shopping Centers FII still accounts for major business revenue. This dependence on star products in NA industry has resulted into insufficient focus on developing new products, even though Vinci Shopping Centers FII has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the NA industry, Vinci Shopping Centers FII 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.
No frontier risks strategy
– From the 10K / annual statement of Vinci Shopping Centers FII, it seems that company is thinking out the frontier risks that can impact NA 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.
Interest costs
– Compare to the competition, Vinci Shopping Centers FII 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.
High cash cycle compare to competitors
Vinci Shopping Centers FII has a high cash cycle compare to other players in the NA industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Products dominated business model
– Even though Vinci Shopping Centers FII has some of the most successful models in the NA industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. Vinci Shopping Centers FII should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of Brazil, Vinci Shopping Centers FII needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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 Vinci Shopping Centers FII supply chain. Even after few cautionary changes, Vinci Shopping Centers FII is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Vinci Shopping Centers FII vulnerable to further global disruptions in South East Asia.
Vinci Shopping Centers FII Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Vinci Shopping Centers FII are -
Developing new processes and practices
– Vinci Shopping Centers FII can develop new processes and procedures in NA 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Vinci Shopping Centers FII can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Vinci Shopping Centers FII is facing challenges because of the dominance of functional experts in the organization. Vinci Shopping Centers FII can utilize new technology in the field of NA industry to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
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. Vinci Shopping Centers FII can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Changes in consumer behavior post Covid-19
– consumer behavior has changed in the NA industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Vinci Shopping Centers FII 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. Vinci Shopping Centers FII 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.
Better consumer reach
– The expansion of the 5G network will help Vinci Shopping Centers FII to increase its market reach. Vinci Shopping Centers FII 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in NA industry, but it has also influenced the consumer preferences. Vinci Shopping Centers FII can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Manufacturing automation
– Vinci Shopping Centers FII can use the latest technology developments to improve its manufacturing and designing process in NA 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.
Building a culture of innovation
– managers at Vinci Shopping Centers FII 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 NA industry.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Vinci Shopping Centers FII 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 Vinci Shopping Centers FII to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Vinci Shopping Centers FII 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.
Creating value in data economy
– The success of analytics program of Vinci Shopping Centers FII has opened avenues for new revenue streams for the organization in NA industry. This can help Vinci Shopping Centers FII to build a more holistic ecosystem for Vinci Shopping Centers FII products in the NA industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Vinci Shopping Centers FII can improve the customer journey of consumers in the NA 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 Vinci Shopping Centers FII External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Vinci Shopping Centers FII are -
Regulatory challenges
– Vinci Shopping Centers FII 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 NA industry regulations.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to NA industry are lowering. It can presents Vinci Shopping Centers FII with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the NA sector.
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. Vinci Shopping Centers FII needs to understand the core reasons impacting the NA industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Vinci Shopping Centers FII may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of NA sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Vinci Shopping Centers FII 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 Vinci Shopping Centers FII prominent markets.
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 Vinci Shopping Centers FII in the NA sector and impact the bottomline of the organization.
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 Vinci Shopping Centers FII.
Shortening product life cycle
– it is one of the major threat that Vinci Shopping Centers FII is facing in NA sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing wage structure of Vinci Shopping Centers FII
– 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 Vinci Shopping Centers FII.
Stagnating economy with rate increase
– Vinci Shopping Centers FII 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 NA industry.
High dependence on third party suppliers
– Vinci Shopping Centers FII 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.
Environmental challenges
– Vinci Shopping Centers FII 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. Vinci Shopping Centers FII can take advantage of this fund but it will also bring new competitors in the NA industry.
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. Vinci Shopping Centers FII 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.
Weighted SWOT Analysis of Vinci Shopping Centers FII Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Vinci Shopping Centers FII 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 Vinci Shopping Centers FII 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 Vinci Shopping Centers FII 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 Vinci Shopping Centers FII 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 Vinci Shopping Centers FII needs to make to build a sustainable competitive advantage.