Swot Analysis of "Silic (B): 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 Silic Ifrs facing as an external strategic factors. Some of the topics covered in Silic (B): 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 (B): Choosing Cost or Fair Value on Adoption of IFRS casestudy better are - – supply chains are disrupted by pandemic , increasing inequality as vast percentage of new income is going to the top 1%, customer relationship management is fast transforming because of increasing concerns over data privacy, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings, increasing energy prices, increasing commodity prices,
increasing household debt because of falling income levels, competitive advantages are harder to sustain because of technology dispersion, etc
Introduction to SWOT Analysis of Silic (B): 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 (B): 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 Silic Ifrs, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Silic Ifrs 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 (B): Choosing Cost or Fair Value on Adoption of IFRS can be done for the following purposes –
1. Strategic planning using facts provided in Silic (B): Choosing Cost or Fair Value on Adoption of IFRS case study
2. Improving business portfolio management of Silic Ifrs
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 Silic Ifrs
Strengths Silic (B): 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 Silic Ifrs in Silic (B): Choosing Cost or Fair Value on Adoption of IFRS Harvard Business Review case study are -
Learning organization
- Silic Ifrs 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 Silic Ifrs is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Silic (B): Choosing Cost or Fair Value on Adoption of IFRS Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Silic Ifrs is one of the most innovative firm in sector. Manager in Silic (B): 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.
Successful track record of launching new products
– Silic Ifrs has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Silic Ifrs 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
– Silic Ifrs has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Silic (B): 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.
Low bargaining power of suppliers
– Suppliers of Silic Ifrs in the sector have low bargaining power. Silic (B): 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 Silic Ifrs to manage not only supply disruptions but also source products at highly competitive prices.
High switching costs
– The high switching costs that Silic Ifrs 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.
Ability to lead change in Finance & Accounting field
– Silic Ifrs 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 Silic Ifrs in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Finance & Accounting industry
– Silic (B): Choosing Cost or Fair Value on Adoption of IFRS firm has clearly differentiated products in the market place. This has enabled Silic Ifrs to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Silic Ifrs to invest into research and development (R&D) and innovation.
Organizational Resilience of Silic Ifrs
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Silic Ifrs does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Silic Ifrs 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 Silic (B): Choosing Cost or Fair Value on Adoption of IFRS - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Operational resilience
– The operational resilience strategy in the Silic (B): 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.
High brand equity
– Silic Ifrs has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Silic Ifrs to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Silic (B): 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 (B): Choosing Cost or Fair Value on Adoption of IFRS are -
High bargaining power of channel partners
– Because of the regulatory requirements, David F. Hawkins, Vincent Dessain, Andrew Barron suggests that, Silic Ifrs 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.
Interest costs
– Compare to the competition, Silic Ifrs 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.
Products dominated business model
– Even though Silic Ifrs 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 - Silic (B): Choosing Cost or Fair Value on Adoption of IFRS should strive to include more intangible value offerings along with its core products and services.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Silic (B): Choosing Cost or Fair Value on Adoption of IFRS, is just above the industry average. Silic Ifrs 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Silic (B): Choosing Cost or Fair Value on Adoption of IFRS, it seems that the employees of Silic Ifrs 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.
Slow decision making process
– As mentioned earlier in the report, Silic Ifrs has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Silic Ifrs even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Increasing silos among functional specialists
– The organizational structure of Silic Ifrs is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Silic Ifrs needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Silic Ifrs to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study Silic (B): 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 Silic Ifrs 's lucrative customers.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Silic Ifrs is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Silic (B): Choosing Cost or Fair Value on Adoption of IFRS can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Lack of clear differentiation of Silic Ifrs products
– To increase the profitability and margins on the products, Silic Ifrs 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, Silic Ifrs 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.
Opportunities Silic (B): 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 (B): Choosing Cost or Fair Value on Adoption of IFRS are -
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. Silic Ifrs 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. Silic Ifrs 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.
Buying journey improvements
– Silic Ifrs can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Silic (B): Choosing Cost or Fair Value on Adoption of IFRS 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.
Creating value in data economy
– The success of analytics program of Silic Ifrs has opened avenues for new revenue streams for the organization in the industry. This can help Silic Ifrs to build a more holistic ecosystem as suggested in the Silic (B): Choosing Cost or Fair Value on Adoption of IFRS case study. Silic Ifrs can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Silic Ifrs 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Silic Ifrs 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 Silic Ifrs to hire the very best people irrespective of their geographical location.
Better consumer reach
– The expansion of the 5G network will help Silic Ifrs to increase its market reach. Silic Ifrs 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Silic Ifrs 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Silic Ifrs is facing challenges because of the dominance of functional experts in the organization. Silic (B): 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.
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. Silic Ifrs can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Loyalty marketing
– Silic Ifrs 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Silic Ifrs 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, Silic (B): Choosing Cost or Fair Value on Adoption of IFRS, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Silic Ifrs 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.
Building a culture of innovation
– managers at Silic Ifrs 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 Silic (B): 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 (B): Choosing Cost or Fair Value on Adoption of IFRS are -
High dependence on third party suppliers
– Silic Ifrs 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.
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 Silic Ifrs business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Silic Ifrs 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.
Regulatory challenges
– Silic Ifrs 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.
Shortening product life cycle
– it is one of the major threat that Silic Ifrs is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Silic Ifrs has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Silic Ifrs 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Silic Ifrs with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Silic Ifrs 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.
Environmental challenges
– Silic Ifrs 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. Silic Ifrs can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Silic Ifrs 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 (B): Choosing Cost or Fair Value on Adoption of IFRS .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Silic Ifrs 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.
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 Silic Ifrs in the Finance & Accounting sector and impact the bottomline of the organization.
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 Silic Ifrs.
Weighted SWOT Analysis of Silic (B): 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 (B): 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 (B): 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 (B): 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 (B): 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 Silic Ifrs needs to make to build a sustainable competitive advantage.
