Swot Analysis of "Effective "Estee-te" Tax Planning through Financial Engineering: Estee Lauder Companies, Inc." written by Mary Margaret Frank, Michael Pozzi includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Tax Lauder facing as an external strategic factors. Some of the topics covered in Effective "Estee-te" Tax Planning through Financial Engineering: Estee Lauder Companies, Inc. case study are - Strategic Management Strategies, Corporate governance, Financial management, Financial markets and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Effective "Estee-te" Tax Planning through Financial Engineering: Estee Lauder Companies, Inc. casestudy better are - – cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, digital marketing is dominated by two big players Facebook and Google, increasing transportation and logistics costs, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions,
technology disruption, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Effective "Estee-te" Tax Planning through Financial Engineering: Estee Lauder Companies, Inc.
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Effective "Estee-te" Tax Planning through Financial Engineering: Estee Lauder Companies, Inc. case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Tax Lauder, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Tax Lauder 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 Effective "Estee-te" Tax Planning through Financial Engineering: Estee Lauder Companies, Inc. can be done for the following purposes –
1. Strategic planning using facts provided in Effective "Estee-te" Tax Planning through Financial Engineering: Estee Lauder Companies, Inc. case study
2. Improving business portfolio management of Tax Lauder
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 Lauder
Strengths Effective "Estee-te" Tax Planning through Financial Engineering: Estee Lauder Companies, Inc. | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Tax Lauder in Effective "Estee-te" Tax Planning through Financial Engineering: Estee Lauder Companies, Inc. Harvard Business Review case study are -
Learning organization
- Tax Lauder 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 Lauder is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Effective "Estee-te" Tax Planning through Financial Engineering: Estee Lauder Companies, Inc. Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Tax Lauder digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Tax Lauder 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 Lauder is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Sustainable margins compare to other players in Finance & Accounting industry
– Effective "Estee-te" Tax Planning through Financial Engineering: Estee Lauder Companies, Inc. firm has clearly differentiated products in the market place. This has enabled Tax Lauder to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Tax Lauder to invest into research and development (R&D) and innovation.
Ability to lead change in Finance & Accounting field
– Tax Lauder 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 Lauder in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Tax Lauder is present in almost all the verticals within the industry. This has provided firm in Effective "Estee-te" Tax Planning through Financial Engineering: Estee Lauder Companies, Inc. 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.
Organizational Resilience of Tax Lauder
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Tax Lauder does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Highly skilled collaborators
– Tax Lauder 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 Effective "Estee-te" Tax Planning through Financial Engineering: Estee Lauder Companies, Inc. HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– Tax Lauder is one of the most innovative firm in sector. Manager in Effective "Estee-te" Tax Planning through Financial Engineering: Estee Lauder Companies, Inc. Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Successful track record of launching new products
– Tax Lauder has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Tax Lauder 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.
Ability to recruit top talent
– Tax Lauder is one of the leading recruiters in the industry. Managers in the Effective "Estee-te" Tax Planning through Financial Engineering: Estee Lauder Companies, Inc. are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Tax Lauder 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 Mary Margaret Frank, Michael Pozzi 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.
Weaknesses Effective "Estee-te" Tax Planning through Financial Engineering: Estee Lauder Companies, Inc. | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Effective "Estee-te" Tax Planning through Financial Engineering: Estee Lauder Companies, Inc. are -
High cash cycle compare to competitors
Tax Lauder 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Effective "Estee-te" Tax Planning through Financial Engineering: Estee Lauder Companies, Inc., is just above the industry average. Tax Lauder 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.
Increasing silos among functional specialists
– The organizational structure of Tax Lauder is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Tax Lauder needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Tax Lauder to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Tax Lauder 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.
Lack of clear differentiation of Tax Lauder products
– To increase the profitability and margins on the products, Tax Lauder needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Tax Lauder 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.
Skills based hiring
– The stress on hiring functional specialists at Tax Lauder has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Tax Lauder is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Effective "Estee-te" Tax Planning through Financial Engineering: Estee Lauder Companies, Inc. can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Aligning sales with marketing
– It come across in the case study Effective "Estee-te" Tax Planning through Financial Engineering: Estee Lauder Companies, Inc. 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 Effective "Estee-te" Tax Planning through Financial Engineering: Estee Lauder Companies, Inc. can leverage the sales team experience to cultivate customer relationships as Tax Lauder is planning to shift buying processes online.
Products dominated business model
– Even though Tax Lauder 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 - Effective "Estee-te" Tax Planning through Financial Engineering: Estee Lauder Companies, Inc. should strive to include more intangible value offerings along with its core products and services.
High bargaining power of channel partners
– Because of the regulatory requirements, Mary Margaret Frank, Michael Pozzi suggests that, Tax Lauder 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.
Opportunities Effective "Estee-te" Tax Planning through Financial Engineering: Estee Lauder Companies, Inc. | 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 Effective "Estee-te" Tax Planning through Financial Engineering: Estee Lauder Companies, Inc. are -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Tax Lauder can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Using analytics as competitive advantage
– Tax Lauder 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 Effective "Estee-te" Tax Planning through Financial Engineering: Estee Lauder Companies, Inc. - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Tax Lauder to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Learning at scale
– Online learning technologies has now opened space for Tax Lauder 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Tax Lauder to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Tax Lauder to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Tax Lauder 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.
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 Lauder can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Tax Lauder 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, Effective "Estee-te" Tax Planning through Financial Engineering: Estee Lauder Companies, Inc., 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 Tax Lauder to increase its market reach. Tax Lauder 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.
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 Lauder 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 Lauder 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.
Loyalty marketing
– Tax Lauder 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.
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 Lauder can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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 Lauder can use these opportunities to build new business models that can help the communities that Tax Lauder operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Building a culture of innovation
– managers at Tax Lauder 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.
Threats Effective "Estee-te" Tax Planning through Financial Engineering: Estee Lauder Companies, Inc. External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Effective "Estee-te" Tax Planning through Financial Engineering: Estee Lauder Companies, Inc. are -
Shortening product life cycle
– it is one of the major threat that Tax Lauder is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Tax Lauder with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Effective "Estee-te" Tax Planning through Financial Engineering: Estee Lauder Companies, Inc., Tax Lauder 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 Lauder has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Tax Lauder 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Tax Lauder 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 Effective "Estee-te" Tax Planning through Financial Engineering: Estee Lauder Companies, Inc. .
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 Lauder 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.
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.
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 Lauder needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Tax Lauder 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.
Regulatory challenges
– Tax Lauder 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.
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 Lauder can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Stagnating economy with rate increase
– Tax Lauder 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.
High dependence on third party suppliers
– Tax Lauder 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 Effective "Estee-te" Tax Planning through Financial Engineering: Estee Lauder Companies, Inc. 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 Effective "Estee-te" Tax Planning through Financial Engineering: Estee Lauder Companies, Inc. 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 Effective "Estee-te" Tax Planning through Financial Engineering: Estee Lauder Companies, Inc. 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 Effective "Estee-te" Tax Planning through Financial Engineering: Estee Lauder Companies, Inc. 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 Effective "Estee-te" Tax Planning through Financial Engineering: Estee Lauder Companies, Inc. 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 Lauder needs to make to build a sustainable competitive advantage.
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