Acquisition of Consolidated Rail Corp. (B), Spanish Version SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Acquisition of Consolidated Rail Corp. (B), Spanish Version
Eight days after CSX announced it was going to buy Consolidated Rail (Conrail) for $88.65 per share, Norfolk Southern made a hostile $100 per share bid for Conrail. Over the next several months, the potential acquirers upped their bids while exchanging criticism in the popular press, prompting analysts to call this one of the nastiest takeover battles of the 1990s. The case is set in January 1997, just before Conrail shareholders are scheduled to vote on the proposed deal with CSX. It analyzes the trend toward consolidation in the U.S. railroad industry, the bidding war for Conrail, and the various provisions in Pennsylvania's anti-takeover laws, which restrict the market for corporate control. It also explores the strategic and financial implications of a bidding war and challenges the assumption that failure to acquire is a zero net present value endeavor. Finally, it examines the nature of and economic basis for regulating the market for corporate control.
Swot Analysis of "Acquisition of Consolidated Rail Corp. (B), Spanish Version" written by Benjamin C. Esty, Mathew Mateo Millett includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Conrail Csx facing as an external strategic factors. Some of the topics covered in Acquisition of Consolidated Rail Corp. (B), Spanish Version case study are - Strategic Management Strategies, Mergers & acquisitions, Negotiations, Performance measurement, Regulation and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Acquisition of Consolidated Rail Corp. (B), Spanish Version casestudy better are - – technology disruption, increasing transportation and logistics costs, there is increasing trade war between United States & China, increasing energy prices, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , talent flight as more people leaving formal jobs,
competitive advantages are harder to sustain because of technology dispersion, customer relationship management is fast transforming because of increasing concerns over data privacy, etc
Introduction to SWOT Analysis of Acquisition of Consolidated Rail Corp. (B), Spanish Version
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Acquisition of Consolidated Rail Corp. (B), Spanish Version case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Conrail Csx, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Conrail Csx 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 Acquisition of Consolidated Rail Corp. (B), Spanish Version can be done for the following purposes –
1. Strategic planning using facts provided in Acquisition of Consolidated Rail Corp. (B), Spanish Version case study
2. Improving business portfolio management of Conrail Csx
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 Conrail Csx
Strengths Acquisition of Consolidated Rail Corp. (B), Spanish Version | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Conrail Csx in Acquisition of Consolidated Rail Corp. (B), Spanish Version Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Conrail Csx in the sector have low bargaining power. Acquisition of Consolidated Rail Corp. (B), Spanish Version has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Conrail Csx to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Conrail Csx is present in almost all the verticals within the industry. This has provided firm in Acquisition of Consolidated Rail Corp. (B), Spanish Version 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.
Sustainable margins compare to other players in Finance & Accounting industry
– Acquisition of Consolidated Rail Corp. (B), Spanish Version firm has clearly differentiated products in the market place. This has enabled Conrail Csx to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Conrail Csx to invest into research and development (R&D) and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Conrail Csx 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.
High switching costs
– The high switching costs that Conrail Csx 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 Conrail Csx in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Conrail Csx is one of the leading recruiters in the industry. Managers in the Acquisition of Consolidated Rail Corp. (B), Spanish Version are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Highly skilled collaborators
– Conrail Csx 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 Acquisition of Consolidated Rail Corp. (B), Spanish Version HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Ability to lead change in Finance & Accounting field
– Conrail Csx 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 Conrail Csx in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Conrail Csx digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Conrail Csx 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.
Analytics focus
– Conrail Csx 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 Benjamin C. Esty, Mathew Mateo Millett 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.
Learning organization
- Conrail Csx 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 Conrail Csx is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Acquisition of Consolidated Rail Corp. (B), Spanish Version Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Weaknesses Acquisition of Consolidated Rail Corp. (B), Spanish Version | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Acquisition of Consolidated Rail Corp. (B), Spanish Version are -
Lack of clear differentiation of Conrail Csx products
– To increase the profitability and margins on the products, Conrail Csx needs to provide more differentiated products than what it is currently offering in the marketplace.
High cash cycle compare to competitors
Conrail Csx 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Acquisition of Consolidated Rail Corp. (B), Spanish Version, is just above the industry average. Conrail Csx 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.
Low market penetration in new markets
– Outside its home market of Conrail Csx, firm in the HBR case study Acquisition of Consolidated Rail Corp. (B), Spanish Version needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Need for greater diversity
– Conrail Csx has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Acquisition of Consolidated Rail Corp. (B), Spanish Version 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 Conrail Csx has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Conrail Csx is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Acquisition of Consolidated Rail Corp. (B), Spanish Version can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Acquisition of Consolidated Rail Corp. (B), Spanish Version, it seems that the employees of Conrail Csx 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.
Interest costs
– Compare to the competition, Conrail Csx 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.
Aligning sales with marketing
– It come across in the case study Acquisition of Consolidated Rail Corp. (B), Spanish Version 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 Acquisition of Consolidated Rail Corp. (B), Spanish Version can leverage the sales team experience to cultivate customer relationships as Conrail Csx is planning to shift buying processes online.
High operating costs
– Compare to the competitors, firm in the HBR case study Acquisition of Consolidated Rail Corp. (B), Spanish Version 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 Conrail Csx 's lucrative customers.
Opportunities Acquisition of Consolidated Rail Corp. (B), Spanish Version | 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 Acquisition of Consolidated Rail Corp. (B), Spanish Version are -
Loyalty marketing
– Conrail Csx 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.
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. Conrail Csx can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Conrail Csx can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Conrail Csx can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Developing new processes and practices
– Conrail Csx 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.
Better consumer reach
– The expansion of the 5G network will help Conrail Csx to increase its market reach. Conrail Csx 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.
Manufacturing automation
– Conrail Csx 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.
Using analytics as competitive advantage
– Conrail Csx 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 Acquisition of Consolidated Rail Corp. (B), Spanish Version - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Conrail Csx to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Leveraging digital technologies
– Conrail Csx 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.
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 Conrail Csx 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.
Creating value in data economy
– The success of analytics program of Conrail Csx has opened avenues for new revenue streams for the organization in the industry. This can help Conrail Csx to build a more holistic ecosystem as suggested in the Acquisition of Consolidated Rail Corp. (B), Spanish Version case study. Conrail Csx can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Conrail Csx 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Conrail Csx can use these opportunities to build new business models that can help the communities that Conrail Csx operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Conrail Csx can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Acquisition of Consolidated Rail Corp. (B), Spanish Version External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Acquisition of Consolidated Rail Corp. (B), Spanish Version are -
Regulatory challenges
– Conrail Csx 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Conrail Csx with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Shortening product life cycle
– it is one of the major threat that Conrail Csx is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Conrail Csx 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.
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 Conrail Csx business can come under increasing regulations regarding data privacy, data security, etc.
High dependence on third party suppliers
– Conrail Csx 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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Conrail Csx 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.
Increasing wage structure of Conrail Csx
– 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 Conrail Csx.
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. Conrail Csx will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Stagnating economy with rate increase
– Conrail Csx 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.
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 Conrail Csx in the Finance & Accounting sector and impact the bottomline of the organization.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Acquisition of Consolidated Rail Corp. (B), Spanish Version, Conrail Csx may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .
Weighted SWOT Analysis of Acquisition of Consolidated Rail Corp. (B), Spanish Version 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 Acquisition of Consolidated Rail Corp. (B), Spanish Version 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 Acquisition of Consolidated Rail Corp. (B), Spanish Version 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 Acquisition of Consolidated Rail Corp. (B), Spanish Version 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 Acquisition of Consolidated Rail Corp. (B), Spanish Version 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 Conrail Csx needs to make to build a sustainable competitive advantage.