Silic (A): Choosing Cost or Fair Value on Adoption of IFRS SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Silic (A): Choosing Cost or Fair Value on Adoption of IFRS
A French real estate firm must choose to report its primary asset (investment property) using either cost or fair-value accounting methods upon adoption of international accounting standards (IAS) in 2005.
Authors :: David F. Hawkins, Vincent Dessain, Andrew Barron
Swot Analysis of "Silic (A): Choosing Cost or Fair Value on Adoption of IFRS" written by David F. Hawkins, Vincent Dessain, Andrew Barron includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Fair Silic facing as an external strategic factors. Some of the topics covered in Silic (A): Choosing Cost or Fair Value on Adoption of IFRS case study are - Strategic Management Strategies, Financial management, International business and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Silic (A): Choosing Cost or Fair Value on Adoption of IFRS casestudy better are - – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing energy prices, technology disruption, supply chains are disrupted by pandemic , there is backlash against globalization, digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models,
central banks are concerned over increasing inflation, increasing transportation and logistics costs, etc
Introduction to SWOT Analysis of Silic (A): Choosing Cost or Fair Value on Adoption of IFRS
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Silic (A): Choosing Cost or Fair Value on Adoption of IFRS case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Fair Silic, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Fair Silic 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 Silic (A): Choosing Cost or Fair Value on Adoption of IFRS can be done for the following purposes –
1. Strategic planning using facts provided in Silic (A): Choosing Cost or Fair Value on Adoption of IFRS case study
2. Improving business portfolio management of Fair Silic
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 Fair Silic
Strengths Silic (A): Choosing Cost or Fair Value on Adoption of IFRS | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Fair Silic in Silic (A): Choosing Cost or Fair Value on Adoption of IFRS Harvard Business Review case study are -
Training and development
– Fair Silic has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Silic (A): Choosing Cost or Fair Value on Adoption of IFRS 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.
Highly skilled collaborators
– Fair Silic 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 Silic (A): Choosing Cost or Fair Value on Adoption of IFRS HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Analytics focus
– Fair Silic 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 David F. Hawkins, Vincent Dessain, Andrew Barron 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.
Organizational Resilience of Fair Silic
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Fair Silic does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Fair Silic is one of the most innovative firm in sector. Manager in Silic (A): Choosing Cost or Fair Value on Adoption of IFRS Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Fair Silic in the sector have low bargaining power. Silic (A): Choosing Cost or Fair Value on Adoption of IFRS has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Fair Silic to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Fair Silic in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Fair Silic is present in almost all the verticals within the industry. This has provided firm in Silic (A): Choosing Cost or Fair Value on Adoption of IFRS case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Cross disciplinary teams
– Horizontal connected teams at the Fair Silic 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 recruit top talent
– Fair Silic is one of the leading recruiters in the industry. Managers in the Silic (A): Choosing Cost or Fair Value on Adoption of IFRS are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Operational resilience
– The operational resilience strategy in the Silic (A): Choosing Cost or Fair Value on Adoption of IFRS 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.
Learning organization
- Fair Silic 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 Fair Silic is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Silic (A): Choosing Cost or Fair Value on Adoption of IFRS Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Silic (A): Choosing Cost or Fair Value on Adoption of IFRS | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Silic (A): Choosing Cost or Fair Value on Adoption of IFRS are -
Skills based hiring
– The stress on hiring functional specialists at Fair Silic 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.
High bargaining power of channel partners
– Because of the regulatory requirements, David F. Hawkins, Vincent Dessain, Andrew Barron suggests that, Fair Silic 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.
Increasing silos among functional specialists
– The organizational structure of Fair Silic is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Fair Silic needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Fair Silic to focus more on services rather than just following the product oriented approach.
Low market penetration in new markets
– Outside its home market of Fair Silic, firm in the HBR case study Silic (A): Choosing Cost or Fair Value on Adoption of IFRS needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Fair Silic 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.
High cash cycle compare to competitors
Fair Silic 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.
Lack of clear differentiation of Fair Silic products
– To increase the profitability and margins on the products, Fair Silic needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study Silic (A): Choosing Cost or Fair Value on Adoption of IFRS 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 Silic (A): Choosing Cost or Fair Value on Adoption of IFRS can leverage the sales team experience to cultivate customer relationships as Fair Silic is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Silic (A): Choosing Cost or Fair Value on Adoption of IFRS 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 Fair Silic 's lucrative customers.
Interest costs
– Compare to the competition, Fair Silic 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.
Slow to strategic competitive environment developments
– As Silic (A): Choosing Cost or Fair Value on Adoption of IFRS HBR case study mentions - Fair Silic takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Opportunities Silic (A): Choosing Cost or Fair Value on Adoption of IFRS | 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 Silic (A): Choosing Cost or Fair Value on Adoption of IFRS are -
Developing new processes and practices
– Fair Silic 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.
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 Fair Silic in the consumer business. Now Fair Silic can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Fair Silic 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 Fair Silic to hire the very best people irrespective of their geographical location.
Manufacturing automation
– Fair Silic 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.
Learning at scale
– Online learning technologies has now opened space for Fair Silic 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.
Creating value in data economy
– The success of analytics program of Fair Silic has opened avenues for new revenue streams for the organization in the industry. This can help Fair Silic to build a more holistic ecosystem as suggested in the Silic (A): Choosing Cost or Fair Value on Adoption of IFRS case study. Fair Silic can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Fair Silic can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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. Fair Silic can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Loyalty marketing
– Fair Silic 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Fair Silic can use these opportunities to build new business models that can help the communities that Fair Silic operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
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 Fair Silic 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Fair Silic 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Fair Silic is facing challenges because of the dominance of functional experts in the organization. Silic (A): Choosing Cost or Fair Value on Adoption of IFRS case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats Silic (A): Choosing Cost or Fair Value on Adoption of IFRS External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Silic (A): Choosing Cost or Fair Value on Adoption of IFRS are -
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.
Environmental challenges
– Fair Silic needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Fair Silic can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Fair Silic 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.
Technology acceleration in Forth Industrial Revolution
– Fair Silic has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Fair Silic 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.
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. Fair Silic 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 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Silic (A): Choosing Cost or Fair Value on Adoption of IFRS, Fair Silic 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 .
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 Fair Silic in the Finance & Accounting sector and impact the bottomline of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Fair Silic 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 Silic (A): Choosing Cost or Fair Value on Adoption of IFRS .
Shortening product life cycle
– it is one of the major threat that Fair Silic 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. Fair Silic can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Fair Silic with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Fair Silic
– 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 Fair Silic.
Weighted SWOT Analysis of Silic (A): Choosing Cost or Fair Value on Adoption of IFRS 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 Silic (A): Choosing Cost or Fair Value on Adoption of IFRS 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 Silic (A): Choosing Cost or Fair Value on Adoption of IFRS 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 Silic (A): Choosing Cost or Fair Value on Adoption of IFRS 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 Silic (A): Choosing Cost or Fair Value on Adoption of IFRS 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 Fair Silic needs to make to build a sustainable competitive advantage.
