Western Chemical Corp.: Divisional Performance Measurement (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Western Chemical Corp.: Divisional Performance Measurement (A)
The president and controller of Western Chemical Corp. are discussing the best way to measure and report performance of foreign subsidiaries. One subsidiary is a joint venture with its own borrowing capacity; another is wholly owned; and a third is wholly owned and serves as a sales base for regional sales. Applying generally accepted accounting principles gives income measurements that seem to conflict with true success of the operations.
Swot Analysis of "Western Chemical Corp.: Divisional Performance Measurement (A)" written by William J. Bruns Jr., Roger Atherton includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Wholly Chemical facing as an external strategic factors. Some of the topics covered in Western Chemical Corp.: Divisional Performance Measurement (A) case study are - Strategic Management Strategies, Balanced scorecard, Collaboration, Corporate governance, Financial management, Operations management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Western Chemical Corp.: Divisional Performance Measurement (A) casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, competitive advantages are harder to sustain because of technology dispersion, there is backlash against globalization, increasing government debt because of Covid-19 spendings,
there is increasing trade war between United States & China, geopolitical disruptions, etc
Introduction to SWOT Analysis of Western Chemical Corp.: Divisional Performance Measurement (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Western Chemical Corp.: Divisional Performance Measurement (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Wholly Chemical, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Wholly Chemical 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 Western Chemical Corp.: Divisional Performance Measurement (A) can be done for the following purposes –
1. Strategic planning using facts provided in Western Chemical Corp.: Divisional Performance Measurement (A) case study
2. Improving business portfolio management of Wholly Chemical
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 Wholly Chemical
Strengths Western Chemical Corp.: Divisional Performance Measurement (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Wholly Chemical in Western Chemical Corp.: Divisional Performance Measurement (A) Harvard Business Review case study are -
Highly skilled collaborators
– Wholly Chemical has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Western Chemical Corp.: Divisional Performance Measurement (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Organizational Resilience of Wholly Chemical
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Wholly Chemical does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Wholly Chemical is one of the most innovative firm in sector. Manager in Western Chemical Corp.: Divisional Performance Measurement (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Wholly Chemical has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Wholly Chemical 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 Wholly Chemical 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.
High brand equity
– Wholly Chemical has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Wholly Chemical to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Wholly Chemical digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Wholly Chemical 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.
Training and development
– Wholly Chemical has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Western Chemical Corp.: Divisional Performance Measurement (A) 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.
Effective Research and Development (R&D)
– Wholly Chemical 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 Western Chemical Corp.: Divisional Performance Measurement (A) - 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 Western Chemical Corp.: Divisional Performance Measurement (A) 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.
Analytics focus
– Wholly Chemical 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 William J. Bruns Jr., Roger Atherton 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.
Strong track record of project management
– Wholly Chemical is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Western Chemical Corp.: Divisional Performance Measurement (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Western Chemical Corp.: Divisional Performance Measurement (A) are -
Slow to strategic competitive environment developments
– As Western Chemical Corp.: Divisional Performance Measurement (A) HBR case study mentions - Wholly Chemical takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
No frontier risks strategy
– After analyzing the HBR case study Western Chemical Corp.: Divisional Performance Measurement (A), 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Western Chemical Corp.: Divisional Performance Measurement (A) 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 Wholly Chemical has relatively successful track record of launching new products.
Slow decision making process
– As mentioned earlier in the report, Wholly Chemical has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Wholly Chemical even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Products dominated business model
– Even though Wholly Chemical 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 - Western Chemical Corp.: Divisional Performance Measurement (A) should strive to include more intangible value offerings along with its core products and services.
Aligning sales with marketing
– It come across in the case study Western Chemical Corp.: Divisional Performance Measurement (A) 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 Western Chemical Corp.: Divisional Performance Measurement (A) can leverage the sales team experience to cultivate customer relationships as Wholly Chemical is planning to shift buying processes online.
Workers concerns about automation
– As automation is fast increasing in the segment, Wholly Chemical 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Western Chemical Corp.: Divisional Performance Measurement (A), in the dynamic environment Wholly Chemical has struggled to respond to the nimble upstart competition. Wholly Chemical has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Increasing silos among functional specialists
– The organizational structure of Wholly Chemical is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Wholly Chemical needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Wholly Chemical to focus more on services rather than just following the product oriented approach.
Skills based hiring
– The stress on hiring functional specialists at Wholly Chemical 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.
Interest costs
– Compare to the competition, Wholly Chemical 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.
Opportunities Western Chemical Corp.: Divisional Performance Measurement (A) | 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 Western Chemical Corp.: Divisional Performance Measurement (A) are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Wholly Chemical is facing challenges because of the dominance of functional experts in the organization. Western Chemical Corp.: Divisional Performance Measurement (A) 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.
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. Wholly Chemical can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Wholly Chemical in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Creating value in data economy
– The success of analytics program of Wholly Chemical has opened avenues for new revenue streams for the organization in the industry. This can help Wholly Chemical to build a more holistic ecosystem as suggested in the Western Chemical Corp.: Divisional Performance Measurement (A) case study. Wholly Chemical can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Wholly Chemical 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.
Better consumer reach
– The expansion of the 5G network will help Wholly Chemical to increase its market reach. Wholly Chemical 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.
Using analytics as competitive advantage
– Wholly Chemical 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 Western Chemical Corp.: Divisional Performance Measurement (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Wholly Chemical to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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 Wholly Chemical 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.
Buying journey improvements
– Wholly Chemical can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Western Chemical Corp.: Divisional Performance Measurement (A) 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.
Manufacturing automation
– Wholly Chemical can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting 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, Wholly Chemical 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Wholly Chemical can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Leveraging digital technologies
– Wholly Chemical 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.
Threats Western Chemical Corp.: Divisional Performance Measurement (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Western Chemical Corp.: Divisional Performance Measurement (A) are -
Stagnating economy with rate increase
– Wholly Chemical 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.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Wholly Chemical 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
– Wholly Chemical has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Wholly Chemical 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.
Shortening product life cycle
– it is one of the major threat that Wholly Chemical is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Wholly Chemical 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.
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. Wholly Chemical 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.
Increasing wage structure of Wholly Chemical
– 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 Wholly Chemical.
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.
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. Wholly Chemical needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Western Chemical Corp.: Divisional Performance Measurement (A), Wholly Chemical 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 .
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.
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 Wholly Chemical in the Finance & Accounting sector and impact the bottomline of the organization.
Consumer confidence and its impact on Wholly Chemical 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.
Weighted SWOT Analysis of Western Chemical Corp.: Divisional Performance Measurement (A) 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 Western Chemical Corp.: Divisional Performance Measurement (A) 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 Western Chemical Corp.: Divisional Performance Measurement (A) 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 Western Chemical Corp.: Divisional Performance Measurement (A) 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 Western Chemical Corp.: Divisional Performance Measurement (A) 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 Wholly Chemical needs to make to build a sustainable competitive advantage.