Knowledge Management at Cap Gemini, Ernst & Young SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Knowledge Management at Cap Gemini, Ernst & Young
Cap Gemini (CG) purchased the consulting unit of Ernst & Young (E&Y) in May 2000 to complete geographical presence (CG was mainly European and E&Y was well located in the American market). The resulting firm, Cap Gemini Ernst & Young (CGE&Y), was heavily based on knowledge to run the business as well as to complete the integration process successfully. The knowledge management (KM) model and experiences each firm followed prior to the purchase were substantially different in terms of organizational structure, technological platforms, and contribution mechanisms. However, these differences seemed to complement each other. Nevertheless, putting together the two knowledge management initiatives was not an easy task. Deciding the knowledge management approach that CGE&Y should follow was both a necessity and a challenge.
Authors :: Rafael Andreu, Emma Lara, Sandra Sieber
Swot Analysis of "Knowledge Management at Cap Gemini, Ernst & Young" written by Rafael Andreu, Emma Lara, Sandra Sieber includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Gemini Ernst facing as an external strategic factors. Some of the topics covered in Knowledge Management at Cap Gemini, Ernst & Young case study are - Strategic Management Strategies, and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Knowledge Management at Cap Gemini, Ernst & Young casestudy better are - – wage bills are increasing, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, cloud computing is disrupting traditional business models, increasing transportation and logistics costs, geopolitical disruptions, challanges to central banks by blockchain based private currencies,
there is increasing trade war between United States & China, increasing household debt because of falling income levels, etc
Introduction to SWOT Analysis of Knowledge Management at Cap Gemini, Ernst & Young
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Knowledge Management at Cap Gemini, Ernst & Young case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Gemini Ernst, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Gemini Ernst 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 Knowledge Management at Cap Gemini, Ernst & Young can be done for the following purposes –
1. Strategic planning using facts provided in Knowledge Management at Cap Gemini, Ernst & Young case study
2. Improving business portfolio management of Gemini Ernst
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 Gemini Ernst
Strengths Knowledge Management at Cap Gemini, Ernst & Young | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Gemini Ernst in Knowledge Management at Cap Gemini, Ernst & Young Harvard Business Review case study are -
Highly skilled collaborators
– Gemini Ernst 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 Knowledge Management at Cap Gemini, Ernst & Young HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Gemini Ernst 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 Rafael Andreu, Emma Lara, Sandra Sieber 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Knowledge Management at Cap Gemini, Ernst & Young firm has clearly differentiated products in the market place. This has enabled Gemini Ernst to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Gemini Ernst to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Gemini Ernst in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Strong track record of project management
– Gemini Ernst is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Innovation driven organization
– Gemini Ernst is one of the most innovative firm in sector. Manager in Knowledge Management at Cap Gemini, Ernst & Young 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 Knowledge Management at Cap Gemini, Ernst & Young 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.
Successful track record of launching new products
– Gemini Ernst has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Gemini Ernst has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Effective Research and Development (R&D)
– Gemini Ernst 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 Knowledge Management at Cap Gemini, Ernst & Young - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Cross disciplinary teams
– Horizontal connected teams at the Gemini Ernst 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.
Ability to lead change in Finance & Accounting field
– Gemini Ernst 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 Gemini Ernst in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
High switching costs
– The high switching costs that Gemini Ernst 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.
Weaknesses Knowledge Management at Cap Gemini, Ernst & Young | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Knowledge Management at Cap Gemini, Ernst & Young are -
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Knowledge Management at Cap Gemini, Ernst & Young, it seems that the employees of Gemini Ernst 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 cash cycle compare to competitors
Gemini Ernst 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.
Slow to strategic competitive environment developments
– As Knowledge Management at Cap Gemini, Ernst & Young HBR case study mentions - Gemini Ernst 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, Gemini Ernst 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.
Capital Spending Reduction
– Even during the low interest decade, Gemini Ernst 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Rafael Andreu, Emma Lara, Sandra Sieber suggests that, Gemini Ernst 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.
No frontier risks strategy
– After analyzing the HBR case study Knowledge Management at Cap Gemini, Ernst & Young, 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 operating costs
– Compare to the competitors, firm in the HBR case study Knowledge Management at Cap Gemini, Ernst & Young 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 Gemini Ernst 's lucrative customers.
Increasing silos among functional specialists
– The organizational structure of Gemini Ernst is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Gemini Ernst needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Gemini Ernst to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Gemini Ernst products
– To increase the profitability and margins on the products, Gemini Ernst needs to provide more differentiated products than what it is currently offering in the marketplace.
Need for greater diversity
– Gemini Ernst 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.
Opportunities Knowledge Management at Cap Gemini, Ernst & Young | 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 Knowledge Management at Cap Gemini, Ernst & Young are -
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 Gemini Ernst 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.
Using analytics as competitive advantage
– Gemini Ernst 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 Knowledge Management at Cap Gemini, Ernst & Young - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Gemini Ernst to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Gemini Ernst can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Building a culture of innovation
– managers at Gemini Ernst 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.
Buying journey improvements
– Gemini Ernst can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Knowledge Management at Cap Gemini, Ernst & Young suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Manufacturing automation
– Gemini Ernst 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.
Leveraging digital technologies
– Gemini Ernst 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.
Learning at scale
– Online learning technologies has now opened space for Gemini Ernst 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Gemini Ernst 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 Gemini Ernst can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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 Gemini Ernst in the consumer business. Now Gemini Ernst can target international markets with far fewer capital restrictions requirements than the existing system.
Low interest rates
– Even though inflation is raising its head in most developed economies, Gemini Ernst 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.
Creating value in data economy
– The success of analytics program of Gemini Ernst has opened avenues for new revenue streams for the organization in the industry. This can help Gemini Ernst to build a more holistic ecosystem as suggested in the Knowledge Management at Cap Gemini, Ernst & Young case study. Gemini Ernst can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Knowledge Management at Cap Gemini, Ernst & Young External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Knowledge Management at Cap Gemini, Ernst & Young are -
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Gemini Ernst in the Finance & Accounting sector and impact the bottomline 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. Gemini Ernst can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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.
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 Gemini Ernst business can come under increasing regulations regarding data privacy, data security, 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 Knowledge Management at Cap Gemini, Ernst & Young, Gemini Ernst 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 .
Increasing wage structure of Gemini Ernst
– 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 Gemini Ernst.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Gemini Ernst in the Finance & Accounting industry. The Finance & Accounting industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Gemini Ernst 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.
Technology acceleration in Forth Industrial Revolution
– Gemini Ernst has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Gemini Ernst 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.
Stagnating economy with rate increase
– Gemini Ernst 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Gemini Ernst with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Regulatory challenges
– Gemini Ernst 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.
Weighted SWOT Analysis of Knowledge Management at Cap Gemini, Ernst & Young 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 Knowledge Management at Cap Gemini, Ernst & Young 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 Knowledge Management at Cap Gemini, Ernst & Young 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 Knowledge Management at Cap Gemini, Ernst & Young 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 Knowledge Management at Cap Gemini, Ernst & Young 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 Gemini Ernst needs to make to build a sustainable competitive advantage.