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 - – increasing transportation and logistics costs, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, technology disruption, competitive advantages are harder to sustain because of technology dispersion, increasing commodity prices, increasing energy prices,
increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, 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 -
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.
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.
Cross disciplinary teams
– Horizontal connected teams at the Tax Radio 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.
Effective Research and Development (R&D)
– Tax Radio 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 Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
Highly skilled collaborators
– Tax Radio 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 Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Tax Radio 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 Tax Radio is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
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.
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.
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.
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.
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 -
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.
Increasing silos among functional specialists
– The organizational structure of Tax Radio is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Tax Radio needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Tax Radio to focus more on services rather than just following the product oriented approach.
Workers concerns about automation
– As automation is fast increasing in the segment, Tax Radio 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 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.
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.
Products dominated business model
– Even though Tax Radio 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 - Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture should strive to include more intangible value offerings along with its core products and services.
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.
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.
Aligning sales with marketing
– It come across in the case study Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture 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 Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture can leverage the sales team experience to cultivate customer relationships as Tax Radio is planning to shift buying processes online.
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.
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.
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 -
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.
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.
Better consumer reach
– The expansion of the 5G network will help Tax Radio to increase its market reach. Tax Radio 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.
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.
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.
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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Tax Radio can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Tax Radio can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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.
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.
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. Tax Radio 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. Tax Radio 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.
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 Tax Radio 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
– 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.
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 -
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 Tax Radio in the Finance & Accounting sector and impact the bottomline of the organization.
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.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Walt Disney's Sale of ABC Radio Structuring a Tax-Efficient Divestiture, Tax Radio 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 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.
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.
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.
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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Tax Radio 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. Tax Radio 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.
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.
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.
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.
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.
