The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy
This discussion describes the why, what, and how of managing for value in privately held companies. Public companies continue to manage for value, a trend that is now pushing its way inexorably into privately held companies. First, we discuss the dynamics that are creating a value-management imperative for these companies. Second, we provide a signaling model to assist management of privately held companies in deciding whether to emphasize (a) revenue growth, (b) the spread between return on invested capital and the weighted average cost of capital, (c) reduction in the cost of capital, or (d) some combination of these three. The key-value-driver model provides guidance in addressing questions such as: Do we have the right to grow? Should we improve profit performance before we grow? What is our performance in relation to our cost of capital? We also describe how to acquire the data necessary to use the model. Third, we present some important but under-utilized tools based upon transactions cost and strategic cost management theories to assist executives in managing for value and discuss when to apply these tools within a strategic context. a??a??a??a??a??
Swot Analysis of "The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy" written by John W. Hill, Thomas L. Zeller includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that A Privately facing as an external strategic factors. Some of the topics covered in The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy case study are - Strategic Management Strategies, Costs, Growth strategy and Strategy & Execution.
Some of the macro environment factors that can be used to understand the The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy casestudy better are - – wage bills are increasing, cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, increasing transportation and logistics costs, increasing household debt because of falling income levels, central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion,
increasing inequality as vast percentage of new income is going to the top 1%, there is backlash against globalization, etc
Introduction to SWOT Analysis of The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the A Privately, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which A Privately 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 The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy can be done for the following purposes –
1. Strategic planning using facts provided in The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy case study
2. Improving business portfolio management of A Privately
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of A Privately
Strengths The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of A Privately in The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy Harvard Business Review case study are -
Ability to recruit top talent
– A Privately is one of the leading recruiters in the industry. Managers in the The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of A Privately in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– A Privately is present in almost all the verticals within the industry. This has provided firm in The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy 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.
Organizational Resilience of A Privately
– The covid-19 pandemic has put organizational resilience at the centre of everthing that A Privately does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– A Privately has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled A Privately to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Operational resilience
– The operational resilience strategy in the The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy 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 switching costs
– The high switching costs that A Privately 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.
Highly skilled collaborators
– A Privately 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 The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Innovation driven organization
– A Privately is one of the most innovative firm in sector. Manager in The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of A Privately in the sector have low bargaining power. The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps A Privately to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Strategy & Execution field
– A Privately 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 A Privately in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– A Privately is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy are -
High cash cycle compare to competitors
A Privately has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
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 A Privately supply chain. Even after few cautionary changes mentioned in the HBR case study - The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left A Privately vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of A Privately is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. A Privately needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help A Privately to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of A Privately products
– To increase the profitability and margins on the products, A Privately needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– After analyzing the HBR case study The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy, it seems that company is thinking about the frontier risks that can impact Strategy & Execution 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 star products
– The top 2 products and services of the firm as mentioned in the The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy 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 A Privately has relatively successful track record of launching new products.
Low market penetration in new markets
– Outside its home market of A Privately, firm in the HBR case study The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Workers concerns about automation
– As automation is fast increasing in the segment, A Privately 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.
Capital Spending Reduction
– Even during the low interest decade, A Privately 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.
Interest costs
– Compare to the competition, A Privately 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy, is just above the industry average. A Privately 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.
Opportunities The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy | 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 The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy are -
Learning at scale
– Online learning technologies has now opened space for A Privately to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Redefining models of collaboration and team work
– As explained in the weaknesses section, A Privately is facing challenges because of the dominance of functional experts in the organization. The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, A Privately can use these opportunities to build new business models that can help the communities that A Privately operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Leveraging digital technologies
– A Privately 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 A Privately 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 Strategy & Execution segment.
Creating value in data economy
– The success of analytics program of A Privately has opened avenues for new revenue streams for the organization in the industry. This can help A Privately to build a more holistic ecosystem as suggested in the The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy case study. A Privately can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, A Privately 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, The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Better consumer reach
– The expansion of the 5G network will help A Privately to increase its market reach. A Privately 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, A Privately 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.
Developing new processes and practices
– A Privately can develop new processes and procedures in Strategy & Execution 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.
Manufacturing automation
– A Privately can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution 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.
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 A Privately in the consumer business. Now A Privately can target international markets with far fewer capital restrictions requirements than the existing system.
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. A Privately can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Threats The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, A Privately 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 The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy, A Privately may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Environmental challenges
– A Privately 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. A Privately can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Technology acceleration in Forth Industrial Revolution
– A Privately has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, A Privately needs to keep up with the evolution of technology in the Strategy & Execution 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for A Privately in the Strategy & Execution industry. The Strategy & Execution 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.
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 A Privately.
Increasing wage structure of A Privately
– 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 A Privately.
Easy access to finance
– Easy access to finance in Strategy & Execution field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. A Privately can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Regulatory challenges
– A Privately 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 Strategy & Execution industry regulations.
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 A Privately in the Strategy & Execution sector and impact the bottomline of the organization.
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. A Privately 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 dependence on third party suppliers
– A Privately 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.
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 The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy 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 The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy 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 The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy 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 The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy 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 The New Value Imperative for Privately held companies: The Why, What, and How of value Management Strategy 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 A Privately needs to make to build a sustainable competitive advantage.
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