Difficult Choices - An Introduction to Cost Effectiveness Analysis SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Difficult Choices - An Introduction to Cost Effectiveness Analysis
The media frequently report on the high cost of various health-related treatments. As there is a limit to the resources available to public and private health plans, they are not able to make all new treatments available. This raises questions about how to determine which treatments should be offered under a health plan. Cost effectiveness analysis has emerged as a powerful tool to help determine priorities and guide these policy decisions. This note is intended as a background reading for a first class on pharmacoeconomics or cost effectiveness analysis.
Swot Analysis of "Difficult Choices - An Introduction to Cost Effectiveness Analysis" written by Gregory S. Zaric includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Treatments Cost facing as an external strategic factors. Some of the topics covered in Difficult Choices - An Introduction to Cost Effectiveness Analysis case study are - Strategic Management Strategies, Health and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Difficult Choices - An Introduction to Cost Effectiveness Analysis casestudy better are - – increasing energy prices, cloud computing is disrupting traditional business models, increasing household debt because of falling income levels, there is increasing trade war between United States & China, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, digital marketing is dominated by two big players Facebook and Google,
challanges to central banks by blockchain based private currencies, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Difficult Choices - An Introduction to Cost Effectiveness Analysis
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Difficult Choices - An Introduction to Cost Effectiveness Analysis case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Treatments Cost, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Treatments Cost 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 Difficult Choices - An Introduction to Cost Effectiveness Analysis can be done for the following purposes –
1. Strategic planning using facts provided in Difficult Choices - An Introduction to Cost Effectiveness Analysis case study
2. Improving business portfolio management of Treatments Cost
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Treatments Cost
Strengths Difficult Choices - An Introduction to Cost Effectiveness Analysis | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Treatments Cost in Difficult Choices - An Introduction to Cost Effectiveness Analysis Harvard Business Review case study are -
Strong track record of project management
– Treatments Cost is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Treatments Cost has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Difficult Choices - An Introduction to Cost Effectiveness Analysis Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Treatments Cost digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Treatments Cost 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 Treatments Cost 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.
Analytics focus
– Treatments Cost 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 industry. The technology infrastructure suggested by Gregory S. Zaric can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Organizational Resilience of Treatments Cost
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Treatments Cost does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Treatments Cost is present in almost all the verticals within the industry. This has provided firm in Difficult Choices - An Introduction to Cost Effectiveness Analysis case study 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.
Ability to recruit top talent
– Treatments Cost is one of the leading recruiters in the industry. Managers in the Difficult Choices - An Introduction to Cost Effectiveness Analysis are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Innovation driven organization
– Treatments Cost is one of the most innovative firm in sector. Manager in Difficult Choices - An Introduction to Cost Effectiveness Analysis Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Treatments Cost has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Difficult Choices - An Introduction to Cost Effectiveness Analysis - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Treatments Cost in the sector have low bargaining power. Difficult Choices - An Introduction to Cost Effectiveness Analysis has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Treatments Cost to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Finance & Accounting industry
– Difficult Choices - An Introduction to Cost Effectiveness Analysis firm has clearly differentiated products in the market place. This has enabled Treatments Cost to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Treatments Cost to invest into research and development (R&D) and innovation.
Weaknesses Difficult Choices - An Introduction to Cost Effectiveness Analysis | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Difficult Choices - An Introduction to Cost Effectiveness Analysis are -
Increasing silos among functional specialists
– The organizational structure of Treatments Cost is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Treatments Cost needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Treatments Cost to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Treatments Cost 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Difficult Choices - An Introduction to Cost Effectiveness Analysis, in the dynamic environment Treatments Cost has struggled to respond to the nimble upstart competition. Treatments Cost has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High cash cycle compare to competitors
Treatments Cost has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
High dependence on 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 Treatments Cost supply chain. Even after few cautionary changes mentioned in the HBR case study - Difficult Choices - An Introduction to Cost Effectiveness Analysis, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Treatments Cost vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Treatments Cost 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.
No frontier risks strategy
– After analyzing the HBR case study Difficult Choices - An Introduction to Cost Effectiveness Analysis, it seems that company is thinking about the frontier risks that can impact Finance & Accounting strategy. 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, firm in the HBR case study Difficult Choices - An Introduction to Cost Effectiveness Analysis has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Treatments Cost 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Difficult Choices - An Introduction to Cost Effectiveness Analysis, is just above the industry average. Treatments Cost 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.
Interest costs
– Compare to the competition, Treatments Cost 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, Treatments Cost 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 industry using digital technology.
Opportunities Difficult Choices - An Introduction to Cost Effectiveness Analysis | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Difficult Choices - An Introduction to Cost Effectiveness Analysis are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Treatments Cost can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Treatments Cost 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 Treatments Cost 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 Treatments Cost to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Treatments Cost has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Difficult Choices - An Introduction to Cost Effectiveness Analysis - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Treatments Cost to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Treatments Cost in the consumer business. Now Treatments Cost 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. Treatments Cost can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Treatments Cost can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Difficult Choices - An Introduction to Cost Effectiveness Analysis suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Treatments Cost 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.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Treatments Cost 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. Treatments Cost 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.
Building a culture of innovation
– managers at Treatments Cost 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 Finance & Accounting segment.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Finance & Accounting industry, but it has also influenced the consumer preferences. Treatments Cost can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Treatments Cost can use these opportunities to build new business models that can help the communities that Treatments Cost operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Treatments Cost is facing challenges because of the dominance of functional experts in the organization. Difficult Choices - An Introduction to Cost Effectiveness Analysis case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats Difficult Choices - An Introduction to Cost Effectiveness Analysis External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Difficult Choices - An Introduction to Cost Effectiveness Analysis are -
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 Treatments Cost business can come under increasing regulations regarding data privacy, data security, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Treatments Cost in the Finance & Accounting industry. The Finance & Accounting 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.
Environmental challenges
– Treatments Cost 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. Treatments Cost can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Treatments Cost with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Treatments Cost 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 prominent markets illustrated in HBR case study Difficult Choices - An Introduction to Cost Effectiveness Analysis .
Shortening product life cycle
– it is one of the major threat that Treatments Cost is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Consumer confidence and its impact on Treatments Cost 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 the industry and other sectors.
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. Treatments Cost 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Difficult Choices - An Introduction to Cost Effectiveness Analysis, Treatments Cost may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Increasing wage structure of Treatments Cost
– 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 Treatments Cost.
Technology acceleration in Forth Industrial Revolution
– Treatments Cost has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Treatments Cost needs to keep up with the evolution of technology in the Finance & Accounting 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.
Weighted SWOT Analysis of Difficult Choices - An Introduction to Cost Effectiveness Analysis Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Difficult Choices - An Introduction to Cost Effectiveness Analysis 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 the case study Difficult Choices - An Introduction to Cost Effectiveness Analysis 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 the Harvard case study Difficult Choices - An Introduction to Cost Effectiveness Analysis 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 Difficult Choices - An Introduction to Cost Effectiveness Analysis is 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 Treatments Cost needs to make to build a sustainable competitive advantage.
