Exiting AmData Software China Ltd.: Sell Now or Later? SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Exiting AmData Software China Ltd.: Sell Now or Later?
In March 2008 the CEO had just received a surprising and unsolicited offer from a Japanese company to purchase his AmData Software China company which owns the exclusive mainland China franchise to distribute this U.S. vendor's software. The Japanese company owns a similar exclusive franchise in Japan. After preliminary negotiations, including a demand by the Japanese company to state the business sale amount in U.S. dollars, the initial $2.5 million offer was raised to $5.5 million. However, this amount was not yet agreed to by both parties and a business valuation analysis would be critical to the key decision of the case: should the CEO sell the company now or continue to develop it for sale at a future date? Such a subsequent sale might be an IPO on one of the Chinese stock exchanges.
Authors :: Hugh Grove, Yuhua Hao, Tom J. Cook, Tomas C. Klett
Swot Analysis of "Exiting AmData Software China Ltd.: Sell Now or Later?" written by Hugh Grove, Yuhua Hao, Tom J. Cook, Tomas C. Klett includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Amdata Japanese facing as an external strategic factors. Some of the topics covered in Exiting AmData Software China Ltd.: Sell Now or Later? case study are - Strategic Management Strategies, Currency, Financial analysis and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Exiting AmData Software China Ltd.: Sell Now or Later? casestudy better are - – technology disruption, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, increasing commodity prices, increasing household debt because of falling income levels, wage bills are increasing, there is backlash against globalization,
increasing government debt because of Covid-19 spendings, increasing energy prices, etc
Introduction to SWOT Analysis of Exiting AmData Software China Ltd.: Sell Now or Later?
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Exiting AmData Software China Ltd.: Sell Now or Later? case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Amdata Japanese, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Amdata Japanese 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 Exiting AmData Software China Ltd.: Sell Now or Later? can be done for the following purposes –
1. Strategic planning using facts provided in Exiting AmData Software China Ltd.: Sell Now or Later? case study
2. Improving business portfolio management of Amdata Japanese
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 Amdata Japanese
Strengths Exiting AmData Software China Ltd.: Sell Now or Later? | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Amdata Japanese in Exiting AmData Software China Ltd.: Sell Now or Later? Harvard Business Review case study are -
Effective Research and Development (R&D)
– Amdata Japanese 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 Exiting AmData Software China Ltd.: Sell Now or Later? - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Amdata Japanese in the sector have low bargaining power. Exiting AmData Software China Ltd.: Sell Now or Later? has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Amdata Japanese to manage not only supply disruptions but also source products at highly competitive prices.
Innovation driven organization
– Amdata Japanese is one of the most innovative firm in sector. Manager in Exiting AmData Software China Ltd.: Sell Now or Later? Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Amdata Japanese 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 Amdata Japanese is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Exiting AmData Software China Ltd.: Sell Now or Later? Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Amdata Japanese is present in almost all the verticals within the industry. This has provided firm in Exiting AmData Software China Ltd.: Sell Now or Later? 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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Amdata Japanese digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Amdata Japanese 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.
Training and development
– Amdata Japanese has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Exiting AmData Software China Ltd.: Sell Now or Later? 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Exiting AmData Software China Ltd.: Sell Now or Later? firm has clearly differentiated products in the market place. This has enabled Amdata Japanese to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Amdata Japanese to invest into research and development (R&D) and innovation.
High switching costs
– The high switching costs that Amdata Japanese 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.
Organizational Resilience of Amdata Japanese
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Amdata Japanese does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Operational resilience
– The operational resilience strategy in the Exiting AmData Software China Ltd.: Sell Now or Later? 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
– Amdata Japanese 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 Hugh Grove, Yuhua Hao, Tom J. Cook, Tomas C. Klett 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 Exiting AmData Software China Ltd.: Sell Now or Later? | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Exiting AmData Software China Ltd.: Sell Now or Later? are -
Interest costs
– Compare to the competition, Amdata Japanese 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.
Increasing silos among functional specialists
– The organizational structure of Amdata Japanese is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Amdata Japanese needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Amdata Japanese 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 Exiting AmData Software China Ltd.: Sell Now or Later? 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 Amdata Japanese 's lucrative customers.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Amdata Japanese supply chain. Even after few cautionary changes mentioned in the HBR case study - Exiting AmData Software China Ltd.: Sell Now or Later?, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Amdata Japanese vulnerable to further global disruptions in South East Asia.
Capital Spending Reduction
– Even during the low interest decade, Amdata Japanese 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Amdata Japanese 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.
No frontier risks strategy
– After analyzing the HBR case study Exiting AmData Software China Ltd.: Sell Now or Later?, 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 decision making process
– As mentioned earlier in the report, Amdata Japanese 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. Amdata Japanese 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.
Aligning sales with marketing
– It come across in the case study Exiting AmData Software China Ltd.: Sell Now or Later? 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 Exiting AmData Software China Ltd.: Sell Now or Later? can leverage the sales team experience to cultivate customer relationships as Amdata Japanese is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Amdata Japanese 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Exiting AmData Software China Ltd.: Sell Now or Later?, it seems that the employees of Amdata Japanese 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.
Opportunities Exiting AmData Software China Ltd.: Sell Now or Later? | 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 Exiting AmData Software China Ltd.: Sell Now or Later? are -
Using analytics as competitive advantage
– Amdata Japanese 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 Exiting AmData Software China Ltd.: Sell Now or Later? - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Amdata Japanese to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Amdata Japanese 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Amdata Japanese can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Loyalty marketing
– Amdata Japanese 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Amdata Japanese is facing challenges because of the dominance of functional experts in the organization. Exiting AmData Software China Ltd.: Sell Now or Later? 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.
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 Amdata Japanese in the consumer business. Now Amdata Japanese can target international markets with far fewer capital restrictions requirements than the existing system.
Leveraging digital technologies
– Amdata Japanese 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.
Building a culture of innovation
– managers at Amdata Japanese 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.
Manufacturing automation
– Amdata Japanese 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.
Buying journey improvements
– Amdata Japanese can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Exiting AmData Software China Ltd.: Sell Now or Later? 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.
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 Amdata Japanese 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, Amdata Japanese can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Creating value in data economy
– The success of analytics program of Amdata Japanese has opened avenues for new revenue streams for the organization in the industry. This can help Amdata Japanese to build a more holistic ecosystem as suggested in the Exiting AmData Software China Ltd.: Sell Now or Later? case study. Amdata Japanese can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Exiting AmData Software China Ltd.: Sell Now or Later? External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Exiting AmData Software China Ltd.: Sell Now or Later? are -
Environmental challenges
– Amdata Japanese 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. Amdata Japanese can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Regulatory challenges
– Amdata Japanese 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.
Consumer confidence and its impact on Amdata Japanese 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.
High dependence on third party suppliers
– Amdata Japanese 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 Amdata Japanese business can come under increasing regulations regarding data privacy, data security, etc.
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.
Technology acceleration in Forth Industrial Revolution
– Amdata Japanese has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Amdata Japanese 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Exiting AmData Software China Ltd.: Sell Now or Later?, Amdata Japanese 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 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.
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. Amdata Japanese can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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 Amdata Japanese 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 Amdata Japanese.
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. Amdata Japanese 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.
Weighted SWOT Analysis of Exiting AmData Software China Ltd.: Sell Now or Later? 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 Exiting AmData Software China Ltd.: Sell Now or Later? 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 Exiting AmData Software China Ltd.: Sell Now or Later? 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 Exiting AmData Software China Ltd.: Sell Now or Later? 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 Exiting AmData Software China Ltd.: Sell Now or Later? 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 Amdata Japanese needs to make to build a sustainable competitive advantage.