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Mercury Athletic: Valuing the Opportunity SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Mercury Athletic: Valuing the Opportunity


When students have the English-language PDF of this Brief Case in a coursepack, they will also have the option to purchase an audio version.In January 2007, West Coast Fashions, Inc., a large designer and marketer of branded apparel, announced a strategic reorganization that would result in the divestiture of their wholly owned footwear subsidiary, Mercury Athletic. John Liedtke, the head of business development for Active Gear, a mid-sized athletic and casual footwear company, saw the potential acquisition of Mercury as a unique opportunity to roughly double the size of his business. The case uses the potential acquisition of Mercury Athletic as a vehicle to teach students basic DCF (discounted cash flow) valuation using the weighted average cost of capital (WACC). Debt-Free Cash Flow Projections, Terminal Values, Non-operating Assets, Valuation, Operating Projections, Enterprise and Equity Value, Sensitivity Analysis, Acquisition, Weighted Average Cost of Capital, United States, Footwear, Athletic Apparel, Footwear

Authors :: Timothy A. Luehrman, Joel L. Heilprin

Topics :: Finance & Accounting

Tags :: Financial analysis, Mergers & acquisitions, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Mercury Athletic: Valuing the Opportunity" written by Timothy A. Luehrman, Joel L. Heilprin includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Athletic Mercury facing as an external strategic factors. Some of the topics covered in Mercury Athletic: Valuing the Opportunity case study are - Strategic Management Strategies, Financial analysis, Mergers & acquisitions and Finance & Accounting.


Some of the macro environment factors that can be used to understand the Mercury Athletic: Valuing the Opportunity casestudy better are - – technology disruption, customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing, increasing inequality as vast percentage of new income is going to the top 1%, increasing transportation and logistics costs, central banks are concerned over increasing inflation, cloud computing is disrupting traditional business models, challanges to central banks by blockchain based private currencies, increasing commodity prices, etc



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Introduction to SWOT Analysis of Mercury Athletic: Valuing the Opportunity


SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Mercury Athletic: Valuing the Opportunity case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Athletic Mercury, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Athletic Mercury 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 Mercury Athletic: Valuing the Opportunity can be done for the following purposes –
1. Strategic planning using facts provided in Mercury Athletic: Valuing the Opportunity case study
2. Improving business portfolio management of Athletic Mercury
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 Athletic Mercury




Strengths Mercury Athletic: Valuing the Opportunity | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Athletic Mercury in Mercury Athletic: Valuing the Opportunity Harvard Business Review case study are -

Sustainable margins compare to other players in Finance & Accounting industry

– Mercury Athletic: Valuing the Opportunity firm has clearly differentiated products in the market place. This has enabled Athletic Mercury to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Athletic Mercury to invest into research and development (R&D) and innovation.

Operational resilience

– The operational resilience strategy in the Mercury Athletic: Valuing the Opportunity 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.

Analytics focus

– Athletic Mercury 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 Timothy A. Luehrman, Joel L. Heilprin 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.

Ability to lead change in Finance & Accounting field

– Athletic Mercury 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 Athletic Mercury in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Training and development

– Athletic Mercury has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Mercury Athletic: Valuing the Opportunity 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.

Diverse revenue streams

– Athletic Mercury is present in almost all the verticals within the industry. This has provided firm in Mercury Athletic: Valuing the Opportunity 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.

Highly skilled collaborators

– Athletic Mercury 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 Mercury Athletic: Valuing the Opportunity HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.

Organizational Resilience of Athletic Mercury

– The covid-19 pandemic has put organizational resilience at the centre of everthing that Athletic Mercury does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.

Digital Transformation in Finance & Accounting segment

- digital transformation varies from industry to industry. For Athletic Mercury digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Athletic Mercury 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.

Superior customer experience

– The customer experience strategy of Athletic Mercury 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

– Athletic Mercury is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.

Low bargaining power of suppliers

– Suppliers of Athletic Mercury in the sector have low bargaining power. Mercury Athletic: Valuing the Opportunity has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Athletic Mercury to manage not only supply disruptions but also source products at highly competitive prices.






Weaknesses Mercury Athletic: Valuing the Opportunity | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Mercury Athletic: Valuing the Opportunity are -

Aligning sales with marketing

– It come across in the case study Mercury Athletic: Valuing the Opportunity 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 Mercury Athletic: Valuing the Opportunity can leverage the sales team experience to cultivate customer relationships as Athletic Mercury is planning to shift buying processes online.

Low market penetration in new markets

– Outside its home market of Athletic Mercury, firm in the HBR case study Mercury Athletic: Valuing the Opportunity needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.

Slow to harness new channels of communication

– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Athletic Mercury is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Mercury Athletic: Valuing the Opportunity can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.

Interest costs

– Compare to the competition, Athletic Mercury 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 decision making process

– As mentioned earlier in the report, Athletic Mercury 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. Athletic Mercury 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.

No frontier risks strategy

– After analyzing the HBR case study Mercury Athletic: Valuing the Opportunity, it seems that company is thinking about the frontier risks that can impact Finance & Accounting strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.

Slow to strategic competitive environment developments

– As Mercury Athletic: Valuing the Opportunity HBR case study mentions - Athletic Mercury 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 bargaining power of channel partners

– Because of the regulatory requirements, Timothy A. Luehrman, Joel L. Heilprin suggests that, Athletic Mercury 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 Athletic Mercury is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Athletic Mercury needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Athletic Mercury to focus more on services rather than just following the product oriented approach.

Workers concerns about automation

– As automation is fast increasing in the segment, Athletic Mercury 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.

Products dominated business model

– Even though Athletic Mercury 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 - Mercury Athletic: Valuing the Opportunity should strive to include more intangible value offerings along with its core products and services.




Opportunities Mercury Athletic: Valuing the Opportunity | 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 Mercury Athletic: Valuing the Opportunity are -

Creating value in data economy

– The success of analytics program of Athletic Mercury has opened avenues for new revenue streams for the organization in the industry. This can help Athletic Mercury to build a more holistic ecosystem as suggested in the Mercury Athletic: Valuing the Opportunity case study. Athletic Mercury can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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. Athletic Mercury can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.

Buying journey improvements

– Athletic Mercury can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Mercury Athletic: Valuing the Opportunity 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.

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 Athletic Mercury in the consumer business. Now Athletic Mercury can target international markets with far fewer capital restrictions requirements than the existing system.

Low interest rates

– Even though inflation is raising its head in most developed economies, Athletic Mercury 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.

Leveraging digital technologies

– Athletic Mercury 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

– Athletic Mercury 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 Mercury Athletic: Valuing the Opportunity - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Athletic Mercury to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Better consumer reach

– The expansion of the 5G network will help Athletic Mercury to increase its market reach. Athletic Mercury 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.

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. Athletic Mercury can explore opportunities that can attract volunteers and are consistent with its mission and vision.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Athletic Mercury can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Redefining models of collaboration and team work

– As explained in the weaknesses section, Athletic Mercury is facing challenges because of the dominance of functional experts in the organization. Mercury Athletic: Valuing the Opportunity 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.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Athletic Mercury 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 Athletic Mercury to hire the very best people irrespective of their geographical location.

Developing new processes and practices

– Athletic Mercury 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.




Threats Mercury Athletic: Valuing the Opportunity External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The threats mentioned in the HBR case study Mercury Athletic: Valuing the Opportunity are -

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. Athletic Mercury 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.

Stagnating economy with rate increase

– Athletic Mercury 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.

Consumer confidence and its impact on Athletic Mercury 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.

Barriers of entry lowering

– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Athletic Mercury with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.

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 Athletic Mercury in the Finance & Accounting sector and impact the bottomline of the organization.

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. Athletic Mercury needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.

Environmental challenges

– Athletic Mercury 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. Athletic Mercury can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.

Technology acceleration in Forth Industrial Revolution

– Athletic Mercury has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Athletic Mercury 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 wage structure of Athletic Mercury

– 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 Athletic Mercury.

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 Athletic Mercury.

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. Athletic Mercury can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

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 Athletic Mercury business can come under increasing regulations regarding data privacy, data security, etc.

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Mercury Athletic: Valuing the Opportunity, Athletic Mercury 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 .




Weighted SWOT Analysis of Mercury Athletic: Valuing the Opportunity 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 Mercury Athletic: Valuing the Opportunity 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 Mercury Athletic: Valuing the Opportunity 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 Mercury Athletic: Valuing the Opportunity 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 Mercury Athletic: Valuing the Opportunity 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 Athletic Mercury needs to make to build a sustainable competitive advantage.



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