SWOT Analysis / TOWS Matrix for Highwoods Properties (United States)
Based on various researches at Oak Spring University , Highwoods Properties is operating in a macro-environment that has been destablized by – challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, geopolitical disruptions, competitive advantages are harder to sustain because of technology dispersion, central banks are concerned over increasing inflation, increasing government debt because of Covid-19 spendings,
cloud computing is disrupting traditional business models, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Highwoods Properties
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Highwoods Properties can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Highwoods Properties, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Highwoods Properties 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 Highwoods Properties can be done for the following purposes –
1. Strategic planning of Highwoods Properties
2. Improving business portfolio management of Highwoods Properties
3. Assessing feasibility of the new initiative in United States
4. Making a Real Estate Operations sector specific business decision
5. Set goals for the organization
6. Organizational restructuring of Highwoods Properties
Strengths of Highwoods Properties | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Highwoods Properties are -
Innovation driven organization
– Highwoods Properties is one of the most innovative firm in Real Estate Operations sector.
Low bargaining power of suppliers
– Suppliers of Highwoods Properties in the Services sector have low bargaining power. Highwoods Properties has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Highwoods Properties to manage not only supply disruptions but also source products at highly competitive prices.
Operational resilience
– The operational resilience strategy of Highwoods Properties 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.
Analytics focus
– Highwoods Properties 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 United States 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.
Learning organization
- Highwoods Properties 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 Highwoods Properties is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders at Highwoods Properties emphasize – knowledge, initiative, and innovation.
High brand equity
– Highwoods Properties has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Highwoods Properties to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Training and development
– Highwoods Properties 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.
Effective Research and Development (R&D)
– Highwoods Properties has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Highwoods Properties 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.
Strong track record of project management in the Real Estate Operations industry
– Highwoods Properties is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Real Estate Operations industry
– Highwoods Properties has clearly differentiated products in the market place. This has enabled Highwoods Properties to fetch slight price premium compare to the competitors in the Real Estate Operations industry. The sustainable margins have also helped Highwoods Properties to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Highwoods Properties in Real Estate Operations industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Cross disciplinary teams
– Horizontal connected teams at the Highwoods Properties 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.
Weaknesses of Highwoods Properties | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Highwoods Properties are -
Need for greater diversity
– Highwoods Properties has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Capital Spending Reduction
– Even during the low interest decade, Highwoods Properties 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 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 Highwoods Properties supply chain. Even after few cautionary changes, Highwoods Properties is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Highwoods Properties vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– From the outside it seems that Highwoods Properties 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 Highwoods Properties can leverage the sales team experience to cultivate customer relationships as Highwoods Properties is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the Real Estate Operations industry, Highwoods Properties 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.
High dependence on Highwoods Properties ‘s star products
– The top 2 products and services of Highwoods Properties 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 Highwoods Properties has relatively successful track record of launching new products.
Products dominated business model
– Even though Highwoods Properties 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. Highwoods Properties should strive to include more intangible value offerings along with its core products and services.
Skills based hiring in Real Estate Operations industry
– The stress on hiring functional specialists at Highwoods Properties 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Highwoods Properties is slow explore the new channels of communication. These new channels of communication can help Highwoods Properties 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.
Compensation and incentives
– The revenue per employee of Highwoods Properties 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.
Increasing silos among functional specialists
– The organizational structure of Highwoods Properties is dominated by functional specialists. It is not different from other players in the Real Estate Operations industry, but Highwoods Properties needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Highwoods Properties to focus more on services in the Real Estate Operations industry rather than just following the product oriented approach.
Highwoods Properties Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Highwoods Properties are -
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. Highwoods Properties 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. Highwoods Properties 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.
Use of Bitcoin and other crypto currencies for transactions in Real Estate Operations industry
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Highwoods Properties in the Real Estate Operations industry. Now Highwoods Properties can target international markets with far fewer capital restrictions requirements than the existing system.
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. Highwoods Properties can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Building a culture of innovation
– managers at Highwoods Properties 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
– Highwoods Properties 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 Highwoods Properties to build a competitive advantage using analytics. The analytics driven competitive advantage can help Highwoods Properties to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Highwoods Properties has opened avenues for new revenue streams for the organization in Real Estate Operations industry. This can help Highwoods Properties to build a more holistic ecosystem for Highwoods Properties products in the Real Estate Operations industry by providing – data insight services, data privacy related products, data based consulting services, etc.
Better consumer reach
– The expansion of the 5G network will help Highwoods Properties to increase its market reach. Highwoods Properties 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.
Learning at scale
– Online learning technologies has now opened space for Highwoods Properties 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
– Highwoods Properties 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Highwoods Properties 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Highwoods Properties can use these opportunities to build new business models that can help the communities that Highwoods Properties operates in. Secondly it can use opportunities from government spending in Real Estate Operations sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Highwoods Properties is facing challenges because of the dominance of functional experts in the organization. Highwoods Properties 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.
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. Highwoods Properties can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Threats Highwoods Properties External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Highwoods Properties are -
High dependence on third party suppliers
– Highwoods Properties 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.
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 Highwoods Properties business can come under increasing regulations regarding data privacy, data security, etc.
Regulatory challenges
– Highwoods Properties 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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Highwoods Properties 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.
Shortening product life cycle
– it is one of the major threat that Highwoods Properties is facing in Real Estate Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Highwoods Properties 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 Highwoods Properties prominent markets.
Increasing wage structure of Highwoods Properties
– 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 Highwoods Properties.
Stagnating economy with rate increase
– Highwoods Properties 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.
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. Highwoods Properties can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Highwoods Properties needs to understand the core reasons impacting the Real Estate Operations industry. This will help it in building a better workplace.
Environmental challenges
– Highwoods Properties 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. Highwoods Properties can take advantage of this fund but it will also bring new competitors in the Real Estate Operations industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Real Estate Operations industry are lowering. It can presents Highwoods Properties 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.
Weighted SWOT Analysis of Highwoods Properties Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Highwoods Properties 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 Highwoods Properties 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 Highwoods Properties 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 Highwoods Properties 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 Highwoods Properties needs to make to build a sustainable competitive advantage.