Computer Associates International, Inc.: Governance and Investor Communication Challenge SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Computer Associates International, Inc.: Governance and Investor Communication Challenge
Sanjay Kumar, the CEO of Computer Associates, faces investor communication challenges following the company's implementation of a new business model and the accompanying change method used to recognize revenue. Despite management's confidence that the new business model is working effectively, the firm's stock price falls significantly and a major shareholder challenges management through a proxy contest.
Swot Analysis of "Computer Associates International, Inc.: Governance and Investor Communication Challenge" written by Paul M. Healy, Krishna G. Palepu includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Associates Computer facing as an external strategic factors. Some of the topics covered in Computer Associates International, Inc.: Governance and Investor Communication Challenge case study are - Strategic Management Strategies, Financial management, Technology and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Computer Associates International, Inc.: Governance and Investor Communication Challenge casestudy better are - – supply chains are disrupted by pandemic , increasing commodity prices, cloud computing is disrupting traditional business models, technology disruption, there is backlash against globalization, increasing inequality as vast percentage of new income is going to the top 1%, increasing government debt because of Covid-19 spendings,
there is increasing trade war between United States & China, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Computer Associates International, Inc.: Governance and Investor Communication Challenge
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Computer Associates International, Inc.: Governance and Investor Communication Challenge case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Associates Computer, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Associates Computer 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 Computer Associates International, Inc.: Governance and Investor Communication Challenge can be done for the following purposes –
1. Strategic planning using facts provided in Computer Associates International, Inc.: Governance and Investor Communication Challenge case study
2. Improving business portfolio management of Associates Computer
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 Associates Computer
Strengths Computer Associates International, Inc.: Governance and Investor Communication Challenge | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Associates Computer in Computer Associates International, Inc.: Governance and Investor Communication Challenge Harvard Business Review case study are -
Organizational Resilience of Associates Computer
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Associates Computer 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 Associates Computer digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Associates Computer has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Strong track record of project management
– Associates Computer is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Training and development
– Associates Computer has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Computer Associates International, Inc.: Governance and Investor Communication Challenge 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.
Cross disciplinary teams
– Horizontal connected teams at the Associates Computer 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.
Operational resilience
– The operational resilience strategy in the Computer Associates International, Inc.: Governance and Investor Communication Challenge 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.
Ability to lead change in Finance & Accounting field
– Associates Computer 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 Associates Computer in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Associates Computer 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 Paul M. Healy, Krishna G. Palepu 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.
Diverse revenue streams
– Associates Computer is present in almost all the verticals within the industry. This has provided firm in Computer Associates International, Inc.: Governance and Investor Communication Challenge 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.
Effective Research and Development (R&D)
– Associates Computer 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 Computer Associates International, Inc.: Governance and Investor Communication Challenge - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Innovation driven organization
– Associates Computer is one of the most innovative firm in sector. Manager in Computer Associates International, Inc.: Governance and Investor Communication Challenge Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Highly skilled collaborators
– Associates Computer 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 Computer Associates International, Inc.: Governance and Investor Communication Challenge HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Weaknesses Computer Associates International, Inc.: Governance and Investor Communication Challenge | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Computer Associates International, Inc.: Governance and Investor Communication Challenge are -
Skills based hiring
– The stress on hiring functional specialists at Associates Computer has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Slow to strategic competitive environment developments
– As Computer Associates International, Inc.: Governance and Investor Communication Challenge HBR case study mentions - Associates Computer 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.
Low market penetration in new markets
– Outside its home market of Associates Computer, firm in the HBR case study Computer Associates International, Inc.: Governance and Investor Communication Challenge needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
No frontier risks strategy
– After analyzing the HBR case study Computer Associates International, Inc.: Governance and Investor Communication Challenge, 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.
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 Associates Computer supply chain. Even after few cautionary changes mentioned in the HBR case study - Computer Associates International, Inc.: Governance and Investor Communication Challenge, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Associates Computer vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Computer Associates International, Inc.: Governance and Investor Communication Challenge HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Associates Computer has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Computer Associates International, Inc.: Governance and Investor Communication Challenge 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 Associates Computer 's lucrative customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Computer Associates International, Inc.: Governance and Investor Communication Challenge, it seems that the employees of Associates Computer 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Associates Computer 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 Associates Computer 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 - Computer Associates International, Inc.: Governance and Investor Communication Challenge should strive to include more intangible value offerings along with its core products and services.
Lack of clear differentiation of Associates Computer products
– To increase the profitability and margins on the products, Associates Computer needs to provide more differentiated products than what it is currently offering in the marketplace.
Opportunities Computer Associates International, Inc.: Governance and Investor Communication Challenge | 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 Computer Associates International, Inc.: Governance and Investor Communication Challenge are -
Leveraging digital technologies
– Associates Computer 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.
Developing new processes and practices
– Associates Computer 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Associates Computer 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, Associates Computer is facing challenges because of the dominance of functional experts in the organization. Computer Associates International, Inc.: Governance and Investor Communication Challenge 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.
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 Associates Computer 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Associates Computer 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, Computer Associates International, Inc.: Governance and Investor Communication Challenge, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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 Associates Computer in the consumer business. Now Associates Computer 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, Associates Computer 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 Associates Computer has opened avenues for new revenue streams for the organization in the industry. This can help Associates Computer to build a more holistic ecosystem as suggested in the Computer Associates International, Inc.: Governance and Investor Communication Challenge case study. Associates Computer 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. Associates Computer can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Using analytics as competitive advantage
– Associates Computer 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 Computer Associates International, Inc.: Governance and Investor Communication Challenge - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Associates Computer to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Associates Computer can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Associates Computer can use these opportunities to build new business models that can help the communities that Associates Computer operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Threats Computer Associates International, Inc.: Governance and Investor Communication Challenge External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Computer Associates International, Inc.: Governance and Investor Communication Challenge are -
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 Associates Computer.
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. Associates Computer 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 Associates Computer 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.
Consumer confidence and its impact on Associates Computer 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Associates Computer 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.
Shortening product life cycle
– it is one of the major threat that Associates Computer is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Associates Computer 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.
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. Associates Computer 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.
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. Associates Computer needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Increasing wage structure of Associates Computer
– 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 Associates Computer.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Associates Computer 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 Computer Associates International, Inc.: Governance and Investor Communication Challenge .
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.
Weighted SWOT Analysis of Computer Associates International, Inc.: Governance and Investor Communication Challenge 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 Computer Associates International, Inc.: Governance and Investor Communication Challenge 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 Computer Associates International, Inc.: Governance and Investor Communication Challenge 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 Computer Associates International, Inc.: Governance and Investor Communication Challenge 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 Computer Associates International, Inc.: Governance and Investor Communication Challenge 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 Associates Computer needs to make to build a sustainable competitive advantage.
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