Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing
This is a Darden case study.Eli Lilly's Worldwide Treasury organization is integrating the effects of foreign tax credits into its lease-versus-purchase analysis for new equipment. The case serves as a review of discounted-cash-flow analysis for operating leases as well as an introduction to the effects of foreign tax credits on an international corporation's overall tax payments. The student must adapt a spreadsheet by allocating leasing, depreciation, and interest expenses to compute their effect on Lilly's excess foreign tax credits and its overall tax liability.
Swot Analysis of "Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing" written by Jordan Posell, Kenneth Eades includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tax Credits facing as an external strategic factors. Some of the topics covered in Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing case study are - Strategic Management Strategies, Diversity, Financial management, Global strategy and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing 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, increasing energy prices, digital marketing is dominated by two big players Facebook and Google, wage bills are increasing, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies,
geopolitical disruptions, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tax Credits, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tax Credits 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 Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing can be done for the following purposes –
1. Strategic planning using facts provided in Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing case study
2. Improving business portfolio management of Tax Credits
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 Credits
Strengths Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tax Credits in Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing Harvard Business Review case study are -
Learning organization
- Tax Credits 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 Credits is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Tax Credits is one of the most innovative firm in sector. Manager in Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Tax Credits digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Tax Credits 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.
Strong track record of project management
– Tax Credits 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 Credits is present in almost all the verticals within the industry. This has provided firm in Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Ability to lead change in Finance & Accounting field
– Tax Credits 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 Credits in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Tax Credits 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 Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
High brand equity
– Tax Credits has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Tax Credits to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Finance & Accounting industry
– Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing firm has clearly differentiated products in the market place. This has enabled Tax Credits to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Tax Credits to invest into research and development (R&D) and innovation.
Low bargaining power of suppliers
– Suppliers of Tax Credits in the sector have low bargaining power. Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Tax Credits to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Tax Credits is one of the leading recruiters in the industry. Managers in the Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Tax Credits has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing 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 Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing are -
Slow to strategic competitive environment developments
– As Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing HBR case study mentions - Tax Credits 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing, it seems that the employees of Tax Credits don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High operating costs
– Compare to the competitors, firm in the HBR case study Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing 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 Credits 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Tax Credits has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing, is just above the industry average. Tax Credits 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Tax Credits 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 Tax Credits supply chain. Even after few cautionary changes mentioned in the HBR case study - Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Tax Credits vulnerable to further global disruptions in South East Asia.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Tax Credits is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Jordan Posell, Kenneth Eades suggests that, Tax Credits 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 decision making process
– As mentioned earlier in the report, Tax Credits 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 Credits 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.
Lack of clear differentiation of Tax Credits products
– To increase the profitability and margins on the products, Tax Credits needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing | 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 Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing are -
Lowering marketing communication costs
– 5G expansion will open new opportunities for Tax Credits 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Tax Credits can use these opportunities to build new business models that can help the communities that Tax Credits operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Low interest rates
– Even though inflation is raising its head in most developed economies, Tax Credits 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.
Buying journey improvements
– Tax Credits can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing 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.
Building a culture of innovation
– managers at Tax Credits 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.
Loyalty marketing
– Tax Credits 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.
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 Credits 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.
Manufacturing automation
– Tax Credits 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.
Creating value in data economy
– The success of analytics program of Tax Credits has opened avenues for new revenue streams for the organization in the industry. This can help Tax Credits to build a more holistic ecosystem as suggested in the Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing case study. Tax Credits can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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 Credits 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 Credits 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.
Using analytics as competitive advantage
– Tax Credits 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 Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Tax Credits to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Developing new processes and practices
– Tax Credits 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.
Threats Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing are -
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 Credits 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.
Regulatory challenges
– Tax Credits needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Finance & Accounting industry regulations.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Tax Credits needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Increasing wage structure of Tax Credits
– 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 Credits.
Stagnating economy with rate increase
– Tax Credits 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.
Technology acceleration in Forth Industrial Revolution
– Tax Credits has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Tax Credits 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing, Tax Credits 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 Tax Credits.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Tax Credits with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Shortening product life cycle
– it is one of the major threat that Tax Credits 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 Credits 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 Tax Credits 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.
Weighted SWOT Analysis of Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing 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 Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing 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 Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing 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 Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing 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 Eli Lilly and Company: Globalization, Foreign Tax Credits, and Equipment Leasing 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 Credits needs to make to build a sustainable competitive advantage.
