Brookfield Real Estate (BRE) SWOT Analysis / TOWS Matrix / MBA Resources
Real Estate Operations
Strategy / MBA Resources
Introduction to SWOT Analysis
SWOT Analysis / TOWS Matrix for Brookfield Real Estate (Canada)
Based on various researches at Oak Spring University , Brookfield Real Estate is operating in a macro-environment that has been destablized by – geopolitical disruptions, there is backlash against globalization, increasing government debt because of Covid-19 spendings, increasing energy prices, central banks are concerned over increasing inflation, wage bills are increasing, technology disruption,
competitive advantages are harder to sustain because of technology dispersion, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Brookfield Real Estate
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University, we believe that Brookfield Real Estate can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Brookfield Real Estate, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Brookfield Real Estate 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 Real Estate can be done for the following purposes –
1. Strategic planning of Brookfield Real Estate
2. Improving business portfolio management of Brookfield Real Estate
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 Brookfield Real Estate
Strengths of Brookfield Real Estate | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Brookfield Real Estate are -
Training and development
– Brookfield Real Estate 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.
Successful track record of launching new products
– Brookfield Real Estate has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Brookfield Real Estate 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.
Cross disciplinary teams
– Horizontal connected teams at the Brookfield Real Estate 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.
Superior customer experience
– The customer experience strategy of Brookfield Real Estate in Real Estate Operations industry is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Brookfield Real Estate has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Brookfield Real Estate to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Effective Research and Development (R&D)
– Brookfield Real Estate has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in – Brookfield Real Estate staying ahead in the Real Estate Operations industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Ability to recruit top talent
– Brookfield Real Estate is one of the leading players in the Real Estate Operations industry in Canada. It is in a position to attract the best talent available in Canada. The firm has a robust talent identification program that helps in identifying the brightest.
Sustainable margins compare to other players in Real Estate Operations industry
– Brookfield Real Estate has clearly differentiated products in the market place. This has enabled Brookfield Real Estate to fetch slight price premium compare to the competitors in the Real Estate Operations industry. The sustainable margins have also helped Brookfield Real Estate to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Brookfield Real Estate 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.
Low bargaining power of suppliers
– Suppliers of Brookfield Real Estate in the Services sector have low bargaining power. Brookfield Real Estate has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Brookfield Real Estate to manage not only supply disruptions but also source products at highly competitive prices.
Organizational Resilience of Brookfield Real Estate
– The covid-19 pandemic has put organizational resilience at the centre of everthing Brookfield Real Estate does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Brookfield Real Estate 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 Canada 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.
Weaknesses of Brookfield Real Estate | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Brookfield Real Estate are -
High cash cycle compare to competitors
Brookfield Real Estate 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.
Aligning sales with marketing
– From the outside it seems that Brookfield Real Estate 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 Brookfield Real Estate can leverage the sales team experience to cultivate customer relationships as Brookfield Real Estate is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Brookfield Real Estate is dominated by functional specialists. It is not different from other players in the Real Estate Operations industry, but Brookfield Real Estate needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Brookfield Real Estate to focus more on services in the Real Estate Operations industry rather than just following the product oriented approach.
Interest costs
– Compare to the competition, Brookfield Real Estate 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, Brookfield Real Estate 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.
Workers concerns about automation
– As automation is fast increasing in the Real Estate Operations industry, Brookfield Real Estate 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.
Skills based hiring in Real Estate Operations industry
– The stress on hiring functional specialists at Brookfield Real Estate 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.
Products dominated business model
– Even though Brookfield Real Estate 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. Brookfield Real Estate should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– From the 10K / annual statement of Brookfield Real Estate, 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.
High operating costs
– Compare to the competitors, Brookfield Real Estate 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 Real Estate lucrative customers.
Lack of clear differentiation of Brookfield Real Estate products
– To increase the profitability and margins on the products, Brookfield Real Estate needs to provide more differentiated products than what it is currently offering in the marketplace.
Brookfield Real Estate Opportunities | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities of Brookfield Real Estate are -
Learning at scale
– Online learning technologies has now opened space for Brookfield Real Estate 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Brookfield Real Estate 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 Brookfield Real Estate to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Brookfield Real Estate 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Brookfield Real Estate 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Brookfield Real Estate 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 Brookfield Real Estate to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Real Estate can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Brookfield Real Estate 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.
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 Real Estate can use these opportunities to build new business models that can help the communities that Brookfield Real Estate 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 Real Estate can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Brookfield Real Estate 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.
Using analytics as competitive advantage
– Brookfield Real Estate 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 Real Estate to build a competitive advantage using analytics. The analytics driven competitive advantage can help Brookfield Real Estate 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 Brookfield Real Estate has opened avenues for new revenue streams for the organization in Real Estate Operations industry. This can help Brookfield Real Estate to build a more holistic ecosystem for Brookfield Real Estate products in the Real Estate Operations industry by providing – data insight services, data privacy related products, data based consulting services, etc.
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 Brookfield Real Estate in the Real Estate Operations industry. Now Brookfield Real Estate can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Brookfield Real Estate External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats of Brookfield Real Estate are -
Consumer confidence and its impact on Brookfield Real Estate demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in Real Estate Operations industry and other sectors.
Increasing wage structure of Brookfield Real Estate
– 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 Brookfield Real Estate.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry to Real Estate Operations industry are lowering. It can presents Brookfield Real Estate 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.
Stagnating economy with rate increase
– Brookfield Real Estate 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.
Environmental challenges
– Brookfield Real Estate 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 Real Estate can take advantage of this fund but it will also bring new competitors 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 Real Estate business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Brookfield Real Estate has witnessed rapid integration of technology during Covid-19 in the Real Estate Operations industry. As one of the leading players in the industry, Brookfield Real Estate 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, Brookfield Real Estate 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.
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 Real Estate.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Brookfield Real Estate 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Brookfield Real Estate 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 Real Estate prominent markets.
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 Real Estate can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Weighted SWOT Analysis of Brookfield Real Estate Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers at Brookfield Real Estate 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 Real Estate 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 Real Estate 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 Real Estate 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 Real Estate needs to make to build a sustainable competitive advantage.