Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning
The winter of 2009 posed challenges to Cengage Learning, a highly levered provider of textbooks and professional materials that had been carved out of Thomson-Reuters through a 2007 LBO. The recession had not only weakened its pricing power, but its benchmark bonds had plunged to a level that in ordinary years would indicate a distressed value. Yet paired with these difficulties came an opportunity to reduce debt amid dislocations in the high yield and leveraged loan markets. In this case students study materials such as Cengage's capital structure and debt recovery analysis to create a pitchbook recommending whether the company should pursue debt repurchases, a debt-for-debt exchange, or maintain its current position.
Swot Analysis of "Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning" written by Margaret Cannella includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Debt Cengage facing as an external strategic factors. Some of the topics covered in Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning case study are - Strategic Management Strategies, Financial markets, Mergers & acquisitions, Recession, Reorganization and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning casestudy better are - – increasing household debt because of falling income levels, increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, increasing energy prices,
there is increasing trade war between United States & China, challanges to central banks by blockchain based private currencies, etc
Introduction to SWOT Analysis of Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Debt Cengage, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Debt Cengage 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 Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning can be done for the following purposes –
1. Strategic planning using facts provided in Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning case study
2. Improving business portfolio management of Debt Cengage
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 Debt Cengage
Strengths Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Debt Cengage in Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning 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.
Strong track record of project management
– Debt Cengage is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Debt Cengage
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Debt Cengage does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Debt Cengage has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning firm has clearly differentiated products in the market place. This has enabled Debt Cengage to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Debt Cengage to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Debt Cengage 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 Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Diverse revenue streams
– Debt Cengage is present in almost all the verticals within the industry. This has provided firm in Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning 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.
High brand equity
– Debt Cengage has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Debt Cengage to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Debt Cengage 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 Margaret Cannella 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.
Learning organization
- Debt Cengage 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 Debt Cengage is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to recruit top talent
– Debt Cengage is one of the leading recruiters in the industry. Managers in the Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Cross disciplinary teams
– Horizontal connected teams at the Debt Cengage 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.
Weaknesses Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning are -
High bargaining power of channel partners
– Because of the regulatory requirements, Margaret Cannella suggests that, Debt Cengage 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.
Increasing silos among functional specialists
– The organizational structure of Debt Cengage is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Debt Cengage needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Debt Cengage to focus more on services rather than just following the product oriented approach.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning, it seems that the employees of Debt Cengage 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Debt Cengage 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.
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 Debt Cengage supply chain. Even after few cautionary changes mentioned in the HBR case study - Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Debt Cengage vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning 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 Debt Cengage has relatively successful track record of launching new products.
Need for greater diversity
– Debt Cengage 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning, is just above the industry average. Debt Cengage 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Debt Cengage is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Slow to strategic competitive environment developments
– As Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning HBR case study mentions - Debt Cengage 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.
Interest costs
– Compare to the competition, Debt Cengage 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 Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning | 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 Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning are -
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. Debt Cengage can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Debt Cengage 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 Debt Cengage to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Debt Cengage has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Debt Cengage 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Debt Cengage can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Debt Cengage 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 Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Debt Cengage to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Debt Cengage can use these opportunities to build new business models that can help the communities that Debt Cengage operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Learning at scale
– Online learning technologies has now opened space for Debt Cengage 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.
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. Debt Cengage 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. Debt Cengage 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 Debt Cengage 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.
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 Debt Cengage 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.
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. Debt Cengage can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Buying journey improvements
– Debt Cengage can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning 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.
Threats Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning are -
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. Debt Cengage can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Debt Cengage 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.
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.
Shortening product life cycle
– it is one of the major threat that Debt Cengage is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning, Debt Cengage 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 .
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 Debt Cengage.
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. Debt Cengage 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.
Consumer confidence and its impact on Debt Cengage 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 Debt Cengage business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Debt Cengage with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Debt Cengage 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. Debt Cengage can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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 Debt Cengage in the Finance & Accounting sector and impact the bottomline of the organization.
Stagnating economy with rate increase
– Debt Cengage 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.
Weighted SWOT Analysis of Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning 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 Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning 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 Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning 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 Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning 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 Taking Advantage of Market Opportunities in the Credit Crisis: Cengage Learning 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 Debt Cengage needs to make to build a sustainable competitive advantage.