Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged)
Details a thinly disguised situation facing a recent Harvard MBA graduate who was forced by a prospective employer to place a dollar value on a grant of stock options. There are two objectives: 1) Serves as an introduction to option valuation, in which students have an opportunity to use market data to value an option in a realistic setting. 2) The setting permits a broader discussion of the wisdom of option-based incentive plans and the popular misconceptions of the value of option grants based on a widespread misunderstanding of how options work and how they are valued.
Swot Analysis of "Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged)" written by Peter Tufano includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Option Options facing as an external strategic factors. Some of the topics covered in Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) case study are - Strategic Management Strategies, Financial analysis, Financial markets and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) casestudy better are - – geopolitical disruptions, technology disruption, talent flight as more people leaving formal jobs, there is backlash against globalization, supply chains are disrupted by pandemic , customer relationship management is fast transforming because of increasing concerns over data privacy, wage bills are increasing,
banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing inequality as vast percentage of new income is going to the top 1%, etc
Introduction to SWOT Analysis of Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Option Options, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Option Options 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 Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) can be done for the following purposes –
1. Strategic planning using facts provided in Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) case study
2. Improving business portfolio management of Option Options
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 Option Options
Strengths Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Option Options in Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) Harvard Business Review case study are -
Sustainable margins compare to other players in Finance & Accounting industry
– Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) firm has clearly differentiated products in the market place. This has enabled Option Options to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Option Options to invest into research and development (R&D) and innovation.
Successful track record of launching new products
– Option Options has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Option Options has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
High switching costs
– The high switching costs that Option Options 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.
Superior customer experience
– The customer experience strategy of Option Options in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Option Options digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Option Options 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.
Diverse revenue streams
– Option Options is present in almost all the verticals within the industry. This has provided firm in Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) 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.
High brand equity
– Option Options has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Option Options to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Option Options 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 Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Option Options 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 Option Options is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Ability to lead change in Finance & Accounting field
– Option Options 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 Option Options in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Training and development
– Option Options has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) 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 Option Options 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.
Weaknesses Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) are -
High bargaining power of channel partners
– Because of the regulatory requirements, Peter Tufano suggests that, Option Options 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) 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 Option Options has relatively successful track record of launching new products.
Skills based hiring
– The stress on hiring functional specialists at Option Options 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.
Lack of clear differentiation of Option Options products
– To increase the profitability and margins on the products, Option Options needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged), in the dynamic environment Option Options has struggled to respond to the nimble upstart competition. Option Options has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Option Options 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.
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 Option Options supply chain. Even after few cautionary changes mentioned in the HBR case study - Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Option Options vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) HBR case study mentions - Option Options 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.
Slow decision making process
– As mentioned earlier in the report, Option Options 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. Option Options 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.
Low market penetration in new markets
– Outside its home market of Option Options, firm in the HBR case study Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Option Options is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Option Options needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Option Options to focus more on services rather than just following the product oriented approach.
Opportunities Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) | 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 Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) are -
Better consumer reach
– The expansion of the 5G network will help Option Options to increase its market reach. Option Options 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.
Creating value in data economy
– The success of analytics program of Option Options has opened avenues for new revenue streams for the organization in the industry. This can help Option Options to build a more holistic ecosystem as suggested in the Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) case study. Option Options 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. Option Options can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Option Options 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 Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Option Options 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 Option Options 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.
Low interest rates
– Even though inflation is raising its head in most developed economies, Option Options 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.
Manufacturing automation
– Option Options 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.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Option Options is facing challenges because of the dominance of functional experts in the organization. Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) 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.
Buying journey improvements
– Option Options can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Option Options 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, Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Developing new processes and practices
– Option Options 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.
Learning at scale
– Online learning technologies has now opened space for Option Options 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Option Options 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 Option Options to hire the very best people irrespective of their geographical location.
Threats Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) 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 Option Options.
Stagnating economy with rate increase
– Option Options 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.
High dependence on third party suppliers
– Option Options 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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged), Option Options 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 .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Option Options 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.
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. Option Options needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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 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. Option Options can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Option Options
– 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 Option Options.
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 Option Options business can come under increasing regulations regarding data privacy, data security, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Option Options with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Option Options 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 Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) .
Weighted SWOT Analysis of Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) 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 Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) 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 Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) 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 Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) 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 Sally Jameson: Valuing Stock Options in a Compensation Package (Abridged) 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 Option Options needs to make to build a sustainable competitive advantage.
