Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture
Jonathan Day, a recent MBA, is tasked with evaluating tax efficient divestitures for his company. Through his perspective, this case provides an overview of taxable and tax-free structures for corporate divestitures. Students will then analyze Disney's sale of ABC Radio, its portfolio of radio stations, to Citadel Broadcasting Corporation using a tax-free structure known as the reverse Morris Trust, and the tax advantages and financial ramifications of the ABC Radio sale for Disney, Disney's shareholders, and Citadel.
Swot Analysis of "Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture" written by Jonah Rockoff, Ira Weiss includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tax Radio facing as an external strategic factors. Some of the topics covered in Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture case study are - Strategic Management Strategies, and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture casestudy better are - – there is increasing trade war between United States & China, technology disruption, increasing transportation and logistics costs, there is backlash against globalization, talent flight as more people leaving formal jobs, geopolitical disruptions, increasing inequality as vast percentage of new income is going to the top 1%,
increasing government debt because of Covid-19 spendings, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tax Radio, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tax Radio 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 Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture can be done for the following purposes –
1. Strategic planning using facts provided in Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture case study
2. Improving business portfolio management of Tax Radio
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 Tax Radio
Strengths Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tax Radio in Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture Harvard Business Review case study are -
Innovation driven organization
– Tax Radio is one of the most innovative firm in sector. Manager in Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to lead change in Finance & Accounting field
– Tax Radio 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 Tax Radio in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Finance & Accounting industry
– Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture firm has clearly differentiated products in the market place. This has enabled Tax Radio to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Tax Radio to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Tax Radio in the sector have low bargaining power. Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tax Radio to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Tax Radio 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 Jonah Rockoff, Ira Weiss 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.
High brand equity
– Tax Radio has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Tax Radio to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Tax Radio is one of the leading recruiters in the industry. Managers in the Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Tax Radio 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.
Training and development
– Tax Radio has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture 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.
Operational resilience
– The operational resilience strategy in the Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture 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
– Tax Radio is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Diverse revenue streams
– Tax Radio is present in almost all the verticals within the industry. This has provided firm in Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture 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.
Weaknesses Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture are -
High operating costs
– Compare to the competitors, firm in the HBR case study Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture 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 Tax Radio 's lucrative customers.
No frontier risks strategy
– After analyzing the HBR case study Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture, 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 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 Tax Radio supply chain. Even after few cautionary changes mentioned in the HBR case study - Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Tax Radio vulnerable to further global disruptions in South East Asia.
Slow decision making process
– As mentioned earlier in the report, Tax Radio 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. Tax Radio 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture 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 Tax Radio has relatively successful track record of launching new products.
High cash cycle compare to competitors
Tax Radio 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.
Lack of clear differentiation of Tax Radio products
– To increase the profitability and margins on the products, Tax Radio needs to provide more differentiated products than what it is currently offering in the marketplace.
High bargaining power of channel partners
– Because of the regulatory requirements, Jonah Rockoff, Ira Weiss suggests that, Tax Radio 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.
Low market penetration in new markets
– Outside its home market of Tax Radio, firm in the HBR case study Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to strategic competitive environment developments
– As Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture HBR case study mentions - Tax Radio 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture, is just above the industry average. Tax Radio 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.
Opportunities Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture | 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 Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture are -
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 Tax Radio in the consumer business. Now Tax Radio can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Tax Radio has opened avenues for new revenue streams for the organization in the industry. This can help Tax Radio to build a more holistic ecosystem as suggested in the Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture case study. Tax Radio can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Tax Radio is facing challenges because of the dominance of functional experts in the organization. Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture 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. Tax Radio can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Tax Radio 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.
Developing new processes and practices
– Tax Radio can develop new processes and procedures in Finance & Accounting industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Leveraging digital technologies
– Tax Radio 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.
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. Tax Radio can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Tax Radio 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.
Using analytics as competitive advantage
– Tax Radio 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 Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Tax Radio to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Tax Radio can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Tax Radio 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 Tax Radio to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Tax Radio 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.
Threats Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture are -
Technology acceleration in Forth Industrial Revolution
– Tax Radio has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Tax Radio 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.
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 Tax Radio.
Environmental challenges
– Tax Radio 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. Tax Radio can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Increasing wage structure of Tax Radio
– 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 Tax Radio.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Tax Radio 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.
Stagnating economy with rate increase
– Tax Radio 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.
Consumer confidence and its impact on Tax Radio 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.
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. Tax Radio needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Shortening product life cycle
– it is one of the major threat that Tax Radio is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Tax Radio can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Tax Radio 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 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.
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.
Weighted SWOT Analysis of Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture 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 Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture 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 Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture 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 Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture 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 Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture 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 Tax Radio needs to make to build a sustainable competitive advantage.