First Capital Realty (FCR) SWOT Analysis / TOWS Matrix / MBA Resources
Real Estate Operations
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for First Capital Realty (Canada)
Based on various researches at Oak Spring University , First Capital Realty is operating in a macro-environment that has been destablized by – customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China, cloud computing is disrupting traditional business models, increasing transportation and logistics costs,
increasing household debt because of falling income levels, technology disruption, etc
Introduction to SWOT Analysis of First Capital Realty
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that First Capital Realty can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the First Capital Realty, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which First Capital Realty 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 First Capital Realty can be done for the following purposes –
1. Strategic planning of First Capital Realty
2. Improving business portfolio management of First Capital Realty
3. Assessing feasibility of the new initiative in Canada
4. Making a Real Estate Operations sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of First Capital Realty
Strengths of First Capital Realty | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of First Capital Realty are -
Sustainable margins compare to other players in Real Estate Operations industry
– First Capital Realty has clearly differentiated products in the market place. This has enabled First Capital Realty to fetch slight price premium compare to the competitors in the Real Estate Operations industry. The sustainable margins have also helped First Capital Realty to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– First Capital Realty 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 First Capital Realty have helped the firm to develop new products and bring them quickly to the marketplace.
Low bargaining power of suppliers
– Suppliers of First Capital Realty in the Services sector have low bargaining power. First Capital Realty has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps First Capital Realty to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Real Estate Operations
– First Capital Realty is one of the leading players in the Real Estate Operations industry in Canada. Over the years it has not only transformed the business landscape in the Real Estate Operations industry in Canada but also across the existing markets. The ability to lead change has enabled First Capital Realty in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– First Capital Realty has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – First Capital Realty 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.
Successful track record of launching new products
– First Capital Realty has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. First Capital Realty 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.
Diverse revenue streams
– First Capital Realty is present in almost all the verticals within the Real Estate Operations industry. This has provided First Capital Realty 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.
Innovation driven organization
– First Capital Realty is one of the most innovative firm in Real Estate Operations sector.
Training and development
– First Capital Realty 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 First Capital Realty digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. First Capital Realty 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.
Cross disciplinary teams
– Horizontal connected teams at the First Capital Realty 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.
High switching costs
– The high switching costs that First Capital Realty 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.
Weaknesses of First Capital Realty | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of First Capital Realty are -
Products dominated business model
– Even though First Capital Realty has some of the most successful models in the Real Estate Operations industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. First Capital Realty should strive to include more intangible value offerings along with its core products and services.
High dependence on First Capital Realty ‘s star products
– The top 2 products and services of First Capital Realty 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 First Capital Realty has relatively successful track record of launching new products.
Workers concerns about automation
– As automation is fast increasing in the Real Estate Operations industry, First Capital Realty 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, First Capital Realty is slow explore the new channels of communication. These new channels of communication can help First Capital Realty to provide better information regarding Real Estate Operations products and services. It can also build an online community to further reach out to potential customers.
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 First Capital Realty supply chain. Even after few cautionary changes, First Capital Realty is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left First Capital Realty vulnerable to further global disruptions in South East Asia.
Interest costs
– Compare to the competition, First Capital Realty 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.
Capital Spending Reduction
– Even during the low interest decade, First Capital Realty 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 bargaining power of channel partners in Real Estate Operations industry
– because of the regulatory requirements in Canada, First Capital Realty is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the Real Estate Operations industry.
Increasing silos among functional specialists
– The organizational structure of First Capital Realty is dominated by functional specialists. It is not different from other players in the Real Estate Operations industry, but First Capital Realty needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help First Capital Realty to focus more on services in the Real Estate Operations industry rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee of First Capital Realty 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.
Ability to respond to the competition
– As the decision making is very deliberative at First Capital Realty, in the dynamic environment of Real Estate Operations industry it has struggled to respond to the nimble upstart competition. First Capital Realty has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
First Capital Realty Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of First Capital Realty are -
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 First Capital Realty 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.
Buying journey improvements
– First Capital Realty 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.
Learning at scale
– Online learning technologies has now opened space for First Capital Realty 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.
Manufacturing automation
– First Capital Realty 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.
Developing new processes and practices
– First Capital Realty can develop new processes and procedures in Real Estate Operations 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.
Creating value in data economy
– The success of analytics program of First Capital Realty has opened avenues for new revenue streams for the organization in Real Estate Operations industry. This can help First Capital Realty to build a more holistic ecosystem for First Capital Realty products in the Real Estate Operations industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at First Capital Realty 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.
Using analytics as competitive advantage
– First Capital Realty 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 First Capital Realty to build a competitive advantage using analytics. The analytics driven competitive advantage can help First Capital Realty to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Lowering marketing communication costs
– 5G expansion will open new opportunities for First Capital Realty 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.
Leveraging digital technologies
– First Capital Realty 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, First Capital Realty 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for First Capital Realty 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 First Capital Realty to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects First Capital Realty can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats First Capital Realty External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of First Capital Realty are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for First Capital Realty in Real Estate Operations industry. The Real Estate Operations industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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.
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. First Capital Realty 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.
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 First Capital Realty in the Real Estate Operations sector and impact the bottomline of the organization.
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. First Capital Realty needs to understand the core reasons impacting the Real Estate Operations industry. This will help it in building a better workplace.
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 First Capital Realty business can come under increasing regulations regarding data privacy, data security, etc.
Environmental challenges
– First Capital Realty 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. First Capital Realty can take advantage of this fund but it will also bring new competitors in the Real Estate Operations industry.
Technology acceleration in Forth Industrial Revolution
– First Capital Realty has witnessed rapid integration of technology during Covid-19 in the Real Estate Operations industry. As one of the leading players in the industry, First Capital Realty 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.
Regulatory challenges
– First Capital Realty 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, First Capital Realty 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 First Capital Realty prominent markets.
High dependence on third party suppliers
– First Capital Realty 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. First Capital Realty can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 First Capital Realty.
Weighted SWOT Analysis of First Capital Realty Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at First Capital Realty 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 First Capital Realty 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 First Capital Realty 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 First Capital Realty 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 First Capital Realty needs to make to build a sustainable competitive advantage.