Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover
In early 2013, CEDC, a large publicly-traded producer and distributer of vodka and spirits in Eastern and Central Europe, has suffered significant declines in its financial performance, is at risk of defaulting on its debt, and is under pressure from its largest shareholders to give them control of the board and to restructure its debt to avoid bankruptcy. The largest shareholder, billionaire Russian investor Roustam Tariko, has proposed an out of court exchange offer for CEDC's publicly traded bonds and investment in CEDC's stock that would give him full ownership of the company. If the exchange offer fails, the company will file for prepackaged Chapter 11 bankruptcy in the United States.
Swot Analysis of "Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover" written by Stuart C. Gilson, Sarah L. Abbott includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cedc's Bankruptcy facing as an external strategic factors. Some of the topics covered in Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover case study are - Strategic Management Strategies, Corporate governance, Financial management, Marketing, Mergers & acquisitions, Reorganization and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover casestudy better are - – talent flight as more people leaving formal jobs, supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, there is backlash against globalization, cloud computing is disrupting traditional business models,
technology disruption, digital marketing is dominated by two big players Facebook and Google, etc
Introduction to SWOT Analysis of Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cedc's Bankruptcy, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cedc's Bankruptcy 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 Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover can be done for the following purposes –
1. Strategic planning using facts provided in Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover case study
2. Improving business portfolio management of Cedc's Bankruptcy
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 Cedc's Bankruptcy
Strengths Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cedc's Bankruptcy in Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover Harvard Business Review case study are -
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Cedc's Bankruptcy digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Cedc's Bankruptcy 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.
Innovation driven organization
– Cedc's Bankruptcy is one of the most innovative firm in sector. Manager in Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Cedc's Bankruptcy has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover 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.
Learning organization
- Cedc's Bankruptcy 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 Cedc's Bankruptcy is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Cedc's Bankruptcy in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Cedc's Bankruptcy in the sector have low bargaining power. Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Cedc's Bankruptcy to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Cedc's Bankruptcy 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 Stuart C. Gilson, Sarah L. Abbott 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.
Highly skilled collaborators
– Cedc's Bankruptcy 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 Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover 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.
Successful track record of launching new products
– Cedc's Bankruptcy has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Cedc's Bankruptcy 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.
Cross disciplinary teams
– Horizontal connected teams at the Cedc's Bankruptcy 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 brand equity
– Cedc's Bankruptcy has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cedc's Bankruptcy to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover are -
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 Cedc's Bankruptcy supply chain. Even after few cautionary changes mentioned in the HBR case study - Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cedc's Bankruptcy vulnerable to further global disruptions in South East Asia.
Need for greater diversity
– Cedc's Bankruptcy 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.
No frontier risks strategy
– After analyzing the HBR case study Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover, 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 operating costs
– Compare to the competitors, firm in the HBR case study Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover 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 Cedc's Bankruptcy 's lucrative customers.
Interest costs
– Compare to the competition, Cedc's Bankruptcy 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.
Lack of clear differentiation of Cedc's Bankruptcy products
– To increase the profitability and margins on the products, Cedc's Bankruptcy needs to provide more differentiated products than what it is currently offering in the marketplace.
Increasing silos among functional specialists
– The organizational structure of Cedc's Bankruptcy is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Cedc's Bankruptcy needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cedc's Bankruptcy to focus more on services rather than just following the product oriented approach.
Capital Spending Reduction
– Even during the low interest decade, Cedc's Bankruptcy 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover, is just above the industry average. Cedc's Bankruptcy 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.
Aligning sales with marketing
– It come across in the case study Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover 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 Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover can leverage the sales team experience to cultivate customer relationships as Cedc's Bankruptcy is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Cedc's Bankruptcy 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.
Opportunities Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover | 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 Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover are -
Using analytics as competitive advantage
– Cedc's Bankruptcy 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 Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cedc's Bankruptcy to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Manufacturing automation
– Cedc's Bankruptcy 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.
Better consumer reach
– The expansion of the 5G network will help Cedc's Bankruptcy to increase its market reach. Cedc's Bankruptcy 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.
Developing new processes and practices
– Cedc's Bankruptcy 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.
Buying journey improvements
– Cedc's Bankruptcy can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Cedc's Bankruptcy 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 Cedc's Bankruptcy to hire the very best people irrespective of their geographical location.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Cedc's Bankruptcy 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, Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Cedc's Bankruptcy can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Cedc's Bankruptcy has opened avenues for new revenue streams for the organization in the industry. This can help Cedc's Bankruptcy to build a more holistic ecosystem as suggested in the Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover case study. Cedc's Bankruptcy can build new products and services such as - data insight services, data privacy related products, data based consulting services, 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, Cedc's Bankruptcy can use these opportunities to build new business models that can help the communities that Cedc's Bankruptcy operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Cedc's Bankruptcy 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.
Leveraging digital technologies
– Cedc's Bankruptcy 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cedc's Bankruptcy can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Threats Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover are -
Increasing wage structure of Cedc's Bankruptcy
– 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 Cedc's Bankruptcy.
Stagnating economy with rate increase
– Cedc's Bankruptcy 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.
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.
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. Cedc's Bankruptcy needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cedc's Bankruptcy 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 Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover, Cedc's Bankruptcy 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 .
High dependence on third party suppliers
– Cedc's Bankruptcy 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.
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. Cedc's Bankruptcy can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Cedc's Bankruptcy in the Finance & Accounting sector and impact the bottomline of the organization.
Regulatory challenges
– Cedc's Bankruptcy 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.
Environmental challenges
– Cedc's Bankruptcy 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. Cedc's Bankruptcy can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cedc's Bankruptcy with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Cedc's Bankruptcy.
Weighted SWOT Analysis of Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover 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 Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover 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 Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover 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 Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover 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 Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover 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 Cedc's Bankruptcy needs to make to build a sustainable competitive advantage.