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Compensation in Professional Service Firms SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Compensation in Professional Service Firms


Discusses the compensation of professionals--partners and nonpartners--in a professional services firm. Discusses the considerations that determine the choice of compensation systems and the interrelationship between compensation and other human resources management systems in professional services firms.

Authors :: Ashish Nanda, Lauren Prusiner

Topics :: Organizational Development

Tags :: Joint ventures, Leadership, Motivating people, Organizational structure, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Compensation in Professional Service Firms" written by Ashish Nanda, Lauren Prusiner includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Compensation Professional facing as an external strategic factors. Some of the topics covered in Compensation in Professional Service Firms case study are - Strategic Management Strategies, Joint ventures, Leadership, Motivating people, Organizational structure and Organizational Development.


Some of the macro environment factors that can be used to understand the Compensation in Professional Service Firms casestudy better are - – digital marketing is dominated by two big players Facebook and Google, central banks are concerned over increasing inflation, geopolitical disruptions, wage bills are increasing, increasing energy prices, customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , etc



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Introduction to SWOT Analysis of Compensation in Professional Service Firms


SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Compensation in Professional Service Firms case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Compensation Professional, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Compensation Professional 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 Compensation in Professional Service Firms can be done for the following purposes –
1. Strategic planning using facts provided in Compensation in Professional Service Firms case study
2. Improving business portfolio management of Compensation Professional
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 Compensation Professional




Strengths Compensation in Professional Service Firms | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Compensation Professional in Compensation in Professional Service Firms Harvard Business Review case study are -

Low bargaining power of suppliers

– Suppliers of Compensation Professional in the sector have low bargaining power. Compensation in Professional Service Firms has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Compensation Professional to manage not only supply disruptions but also source products at highly competitive prices.

Diverse revenue streams

– Compensation Professional is present in almost all the verticals within the industry. This has provided firm in Compensation in Professional Service Firms 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 lead change in Organizational Development field

– Compensation Professional is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Compensation Professional in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Strong track record of project management

– Compensation Professional 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

– Compensation Professional has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Compensation in Professional Service Firms 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.

Analytics focus

– Compensation Professional 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 Ashish Nanda, Lauren Prusiner 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.

Successful track record of launching new products

– Compensation Professional has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Compensation Professional 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 Compensation Professional in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.

Digital Transformation in Organizational Development segment

- digital transformation varies from industry to industry. For Compensation Professional digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Compensation Professional 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.

Effective Research and Development (R&D)

– Compensation Professional 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 Compensation in Professional Service Firms - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Operational resilience

– The operational resilience strategy in the Compensation in Professional Service Firms Harvard Business Review case study comprises – understanding the underlying the factors in the 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.

Organizational Resilience of Compensation Professional

– The covid-19 pandemic has put organizational resilience at the centre of everthing that Compensation Professional does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.






Weaknesses Compensation in Professional Service Firms | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Compensation in Professional Service Firms are -

High bargaining power of channel partners

– Because of the regulatory requirements, Ashish Nanda, Lauren Prusiner suggests that, Compensation Professional is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.

High cash cycle compare to competitors

Compensation Professional 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.

Low market penetration in new markets

– Outside its home market of Compensation Professional, firm in the HBR case study Compensation in Professional Service Firms needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Capital Spending Reduction

– Even during the low interest decade, Compensation Professional 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.

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 Compensation Professional supply chain. Even after few cautionary changes mentioned in the HBR case study - Compensation in Professional Service Firms, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Compensation Professional vulnerable to further global disruptions in South East Asia.

Workers concerns about automation

– As automation is fast increasing in the segment, Compensation Professional 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.

Need for greater diversity

– Compensation Professional 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.

High operating costs

– Compare to the competitors, firm in the HBR case study Compensation in Professional Service Firms 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 Compensation Professional 's lucrative customers.

Aligning sales with marketing

– It come across in the case study Compensation in Professional Service Firms that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Compensation in Professional Service Firms can leverage the sales team experience to cultivate customer relationships as Compensation Professional is planning to shift buying processes online.

Employees’ incomplete understanding of strategy

– From the instances in the HBR case study Compensation in Professional Service Firms, it seems that the employees of Compensation Professional 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 Compensation in Professional Service Firms 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 Compensation Professional has relatively successful track record of launching new products.




Opportunities Compensation in Professional Service Firms | 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 Compensation in Professional Service Firms are -

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Compensation Professional 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 Compensation Professional to hire the very best people irrespective of their geographical location.

Lowering marketing communication costs

– 5G expansion will open new opportunities for Compensation Professional 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.

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 Compensation Professional 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.

Building a culture of innovation

– managers at Compensation Professional 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 Organizational Development segment.

Buying journey improvements

– Compensation Professional can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Compensation in Professional Service Firms 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.

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. Compensation Professional can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Learning at scale

– Online learning technologies has now opened space for Compensation Professional 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.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Compensation Professional is facing challenges because of the dominance of functional experts in the organization. Compensation in Professional Service Firms 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.

Leveraging digital technologies

– Compensation Professional 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.

Creating value in data economy

– The success of analytics program of Compensation Professional has opened avenues for new revenue streams for the organization in the industry. This can help Compensation Professional to build a more holistic ecosystem as suggested in the Compensation in Professional Service Firms case study. Compensation Professional can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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, Compensation Professional can use these opportunities to build new business models that can help the communities that Compensation Professional operates in. Secondly it can use opportunities from government spending in Organizational Development sector.

Manufacturing automation

– Compensation Professional 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.

Low interest rates

– Even though inflation is raising its head in most developed economies, Compensation Professional 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.




Threats Compensation in Professional Service Firms External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The threats mentioned in the HBR case study Compensation in Professional Service Firms are -

Regulatory challenges

– Compensation Professional 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.

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. Compensation Professional needs to understand the core reasons impacting the Organizational Development industry. This will help it in building a better workplace.

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.

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.

Consumer confidence and its impact on Compensation Professional 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.

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 Compensation Professional business can come under increasing regulations regarding data privacy, data security, etc.

Increasing international competition and downward pressure on margins

– Apart from technology driven competitive advantage dilution, Compensation Professional 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 Compensation in Professional Service Firms .

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 Compensation Professional.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Compensation Professional with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.

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. Compensation Professional 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.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Compensation Professional in the Organizational Development industry. The Organizational Development 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.

High dependence on third party suppliers

– Compensation Professional 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.

Technology acceleration in Forth Industrial Revolution

– Compensation Professional has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Compensation Professional 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.




Weighted SWOT Analysis of Compensation in Professional Service Firms 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 Compensation in Professional Service Firms 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 Compensation in Professional Service Firms 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 Compensation in Professional Service Firms 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 Compensation in Professional Service Firms 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 Compensation Professional needs to make to build a sustainable competitive advantage.



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