Case Study Description of Callmate Telips - Choice of Accounting Policy
Callmate Telips Telecom Limited (Callmate) was in the telecommunications business in which the regulatory controls were gradually being undone by the government of Pakistan as part of an economic deregulation program. Callmate was the pioneer in the pay phones and prepaid calling card industries in Pakistan and had significant opportunity to develop into a major business entity. The events in the case demonstrate that the company strategy, as well as aggressive share price management, could be dangerous if there were no checks on the directors. All the directors of Callmate were close family members and the audit committee consisted of three of the directors. The external audit firm that audited Callmate was A.F. Ferguson & Co. (Ferguson) and they were an affiliate of Price Waterhouse Coopers International. Ferguson was regarded among the top professional accounting firms in Pakistan. As Callmate was listed on the Karachi Stock Exchange, it was required to publish its financials quarterly after these had been reviewed by Ferguson. The company had received permission during early 1995 to enter into the long distance international market, which was earlier the monopoly of the state firm Pakistan Telecommunication Corporation Limited (PTCL). A disagreement arose between the auditors and the company on the accounting policy related to revenue recognition used in the financials of the half year ended December 2005. This dispute and the company trying to manage its share price led to a number of problems that became public knowledge as the company tried to malign the auditors. The case examines corporate governance by examining the role of the external auditor, the conduct of the board of directors and the regulator of public listed companies. There were a series of events that caused a profitable company to rapidly become a pariah on the stock exchange and be suspended from the exchange.
Swot Analysis of "Callmate Telips - Choice of Accounting Policy" written by Muntazar B. Ahmed includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Callmate Ferguson facing as an external strategic factors. Some of the topics covered in Callmate Telips - Choice of Accounting Policy case study are - Strategic Management Strategies, Corporate governance, Managing people and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Callmate Telips - Choice of Accounting Policy casestudy better are - – technology disruption, there is increasing trade war between United States & China, competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs, wage bills are increasing,
increasing energy prices, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Callmate Telips - Choice of Accounting Policy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Callmate Telips - Choice of Accounting Policy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Callmate Ferguson, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Callmate Ferguson 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 Callmate Telips - Choice of Accounting Policy can be done for the following purposes –
1. Strategic planning using facts provided in Callmate Telips - Choice of Accounting Policy case study
2. Improving business portfolio management of Callmate Ferguson
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 Callmate Ferguson
Strengths Callmate Telips - Choice of Accounting Policy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Callmate Ferguson in Callmate Telips - Choice of Accounting Policy Harvard Business Review case study are -
Diverse revenue streams
– Callmate Ferguson is present in almost all the verticals within the industry. This has provided firm in Callmate Telips - Choice of Accounting Policy 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.
Innovation driven organization
– Callmate Ferguson is one of the most innovative firm in sector. Manager in Callmate Telips - Choice of Accounting Policy Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Callmate Ferguson is one of the leading recruiters in the industry. Managers in the Callmate Telips - Choice of Accounting Policy are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Callmate Ferguson 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 Callmate Telips - Choice of Accounting Policy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Callmate Ferguson has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Callmate Ferguson 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.
Training and development
– Callmate Ferguson has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Callmate Telips - Choice of Accounting Policy 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.
Cross disciplinary teams
– Horizontal connected teams at the Callmate Ferguson 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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Callmate Ferguson digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Callmate Ferguson 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.
Organizational Resilience of Callmate Ferguson
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Callmate Ferguson does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Callmate Ferguson 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.
Superior customer experience
– The customer experience strategy of Callmate Ferguson 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
– Callmate Ferguson is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Callmate Telips - Choice of Accounting Policy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Callmate Telips - Choice of Accounting Policy are -
Slow to strategic competitive environment developments
– As Callmate Telips - Choice of Accounting Policy HBR case study mentions - Callmate Ferguson 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Callmate Telips - Choice of Accounting Policy 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 Callmate Ferguson 's lucrative customers.
High cash cycle compare to competitors
Callmate Ferguson 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 Callmate Telips - Choice of Accounting Policy 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 Callmate Ferguson has relatively successful track record of launching new products.
Products dominated business model
– Even though Callmate Ferguson 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 - Callmate Telips - Choice of Accounting Policy should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Callmate Ferguson 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Callmate Ferguson is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Callmate Telips - Choice of Accounting Policy 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 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 Callmate Ferguson supply chain. Even after few cautionary changes mentioned in the HBR case study - Callmate Telips - Choice of Accounting Policy, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Callmate Ferguson vulnerable to further global disruptions in South East Asia.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Callmate Telips - Choice of Accounting Policy, it seems that the employees of Callmate Ferguson 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.
Low market penetration in new markets
– Outside its home market of Callmate Ferguson, firm in the HBR case study Callmate Telips - Choice of Accounting Policy needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Callmate Telips - Choice of Accounting Policy, is just above the industry average. Callmate Ferguson 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 Callmate Telips - Choice of Accounting Policy | 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 Callmate Telips - Choice of Accounting Policy 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 Callmate Ferguson 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.
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. Callmate Ferguson can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Callmate Ferguson 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, Callmate Telips - Choice of Accounting Policy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help Callmate Ferguson to increase its market reach. Callmate Ferguson 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Callmate Ferguson can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Building a culture of innovation
– managers at Callmate Ferguson 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
– Callmate Ferguson can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Callmate Telips - Choice of Accounting Policy 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
– Callmate Ferguson 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Callmate Ferguson 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 Callmate Ferguson has opened avenues for new revenue streams for the organization in the industry. This can help Callmate Ferguson to build a more holistic ecosystem as suggested in the Callmate Telips - Choice of Accounting Policy case study. Callmate Ferguson can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Leveraging digital technologies
– Callmate Ferguson 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
– Callmate Ferguson 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 Callmate Telips - Choice of Accounting Policy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Callmate Ferguson to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Callmate Ferguson 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. Callmate Ferguson 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.
Threats Callmate Telips - Choice of Accounting Policy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Callmate Telips - Choice of Accounting Policy are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Callmate Ferguson can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Callmate Telips - Choice of Accounting Policy .
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. Callmate Ferguson needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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 Callmate Ferguson.
Stagnating economy with rate increase
– Callmate Ferguson 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 Callmate Ferguson
– 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 Callmate Ferguson.
Shortening product life cycle
– it is one of the major threat that Callmate Ferguson is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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. Callmate Ferguson 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.
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 Callmate Ferguson in the Finance & Accounting sector and impact the bottomline of the organization.
Consumer confidence and its impact on Callmate Ferguson demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Callmate Ferguson business can come under increasing regulations regarding data privacy, data security, 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. Callmate Ferguson can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– Callmate Ferguson 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 Callmate Telips - Choice of Accounting Policy 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 Callmate Telips - Choice of Accounting Policy 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 Callmate Telips - Choice of Accounting Policy 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 Callmate Telips - Choice of Accounting Policy 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 Callmate Telips - Choice of Accounting Policy 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 Callmate Ferguson needs to make to build a sustainable competitive advantage.
