Case Study Description of Restoring Trust at WorldCom
Examines the changes in corporate governance at WorldCom/MCI as proposed by the company's court-appointed corporate monitor, Richard Breeden. Following the largest bankruptcy ever and the downfall of the company, Breeden wrote "Restoring Trust," a report comprised of 78 recommendations for the future governance of the company. Teaching Purpose: To think about how to improve corporate governance at a specific company.
Swot Analysis of "Restoring Trust at WorldCom" written by Jay W. Lorsch, Ashley C. Robertson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Breeden Worldcom facing as an external strategic factors. Some of the topics covered in Restoring Trust at WorldCom case study are - Strategic Management Strategies, Ethics, Government and Organizational Development.
Some of the macro environment factors that can be used to understand the Restoring Trust at WorldCom casestudy better are - – talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, increasing household debt because of falling income levels, increasing transportation and logistics costs, wage bills are increasing, there is backlash against globalization,
technology disruption, increasing commodity prices, etc
Introduction to SWOT Analysis of Restoring Trust at WorldCom
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Restoring Trust at WorldCom case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Breeden Worldcom, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Breeden Worldcom 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 Restoring Trust at WorldCom can be done for the following purposes –
1. Strategic planning using facts provided in Restoring Trust at WorldCom case study
2. Improving business portfolio management of Breeden Worldcom
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Breeden Worldcom
Strengths Restoring Trust at WorldCom | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Breeden Worldcom in Restoring Trust at WorldCom Harvard Business Review case study are -
Organizational Resilience of Breeden Worldcom
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Breeden Worldcom does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Learning organization
- Breeden Worldcom 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 Breeden Worldcom is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Restoring Trust at WorldCom Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Breeden Worldcom is one of the most innovative firm in sector. Manager in Restoring Trust at WorldCom Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
High brand equity
– Breeden Worldcom has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Breeden Worldcom to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Cross disciplinary teams
– Horizontal connected teams at the Breeden Worldcom 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.
Low bargaining power of suppliers
– Suppliers of Breeden Worldcom in the sector have low bargaining power. Restoring Trust at WorldCom has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Breeden Worldcom to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Breeden Worldcom is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Breeden Worldcom 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.
Analytics focus
– Breeden Worldcom 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 Jay W. Lorsch, Ashley C. Robertson 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.
Diverse revenue streams
– Breeden Worldcom is present in almost all the verticals within the industry. This has provided firm in Restoring Trust at WorldCom 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.
Successful track record of launching new products
– Breeden Worldcom has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Breeden Worldcom 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.
Superior customer experience
– The customer experience strategy of Breeden Worldcom in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Weaknesses Restoring Trust at WorldCom | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Restoring Trust at WorldCom are -
High cash cycle compare to competitors
Breeden Worldcom 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Breeden Worldcom is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Restoring Trust at WorldCom can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Workers concerns about automation
– As automation is fast increasing in the segment, Breeden Worldcom 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Restoring Trust at WorldCom, it seems that the employees of Breeden Worldcom don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Restoring Trust at WorldCom HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Breeden Worldcom has relatively successful track record of launching new products.
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 Breeden Worldcom supply chain. Even after few cautionary changes mentioned in the HBR case study - Restoring Trust at WorldCom, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Breeden Worldcom vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Restoring Trust at WorldCom, is just above the industry average. Breeden Worldcom 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.
Products dominated business model
– Even though Breeden Worldcom has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Restoring Trust at WorldCom should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Breeden Worldcom 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.
Skills based hiring
– The stress on hiring functional specialists at Breeden Worldcom 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.
Lack of clear differentiation of Breeden Worldcom products
– To increase the profitability and margins on the products, Breeden Worldcom needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Restoring Trust at WorldCom | 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 Restoring Trust at WorldCom are -
Manufacturing automation
– Breeden Worldcom can use the latest technology developments to improve its manufacturing and designing process in Organizational Development segment. 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.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Breeden Worldcom can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Breeden Worldcom 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, as suggested in case study, Restoring Trust at WorldCom, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Breeden Worldcom 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.
Using analytics as competitive advantage
– Breeden Worldcom 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 Restoring Trust at WorldCom - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Breeden Worldcom 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 Breeden Worldcom in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Learning at scale
– Online learning technologies has now opened space for Breeden Worldcom 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.
Creating value in data economy
– The success of analytics program of Breeden Worldcom has opened avenues for new revenue streams for the organization in the industry. This can help Breeden Worldcom to build a more holistic ecosystem as suggested in the Restoring Trust at WorldCom case study. Breeden Worldcom can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Buying journey improvements
– Breeden Worldcom can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Restoring Trust at WorldCom 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Breeden Worldcom 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.
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 Breeden Worldcom in the consumer business. Now Breeden Worldcom 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. Breeden Worldcom can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Better consumer reach
– The expansion of the 5G network will help Breeden Worldcom to increase its market reach. Breeden Worldcom 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.
Threats Restoring Trust at WorldCom External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Restoring Trust at WorldCom are -
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 Breeden Worldcom in the Organizational Development sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Breeden Worldcom 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 field.
High dependence on third party suppliers
– Breeden Worldcom 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 Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Breeden Worldcom can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Technology acceleration in Forth Industrial Revolution
– Breeden Worldcom has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Breeden Worldcom needs to keep up with the evolution of technology in the Organizational Development 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.
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.
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. Breeden Worldcom needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.
Regulatory challenges
– Breeden Worldcom 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 Organizational Development industry regulations.
Consumer confidence and its impact on Breeden Worldcom 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.
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.
Increasing wage structure of Breeden Worldcom
– 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 Breeden Worldcom.
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 Breeden Worldcom.
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. Breeden Worldcom will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Weighted SWOT Analysis of Restoring Trust at WorldCom 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 Restoring Trust at WorldCom 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 Restoring Trust at WorldCom 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 Restoring Trust at WorldCom 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 Restoring Trust at WorldCom 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 Breeden Worldcom needs to make to build a sustainable competitive advantage.
