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 - – central banks are concerned over increasing inflation, geopolitical disruptions, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing household debt because of falling income levels, there is backlash against globalization, wage bills are increasing, supply chains are disrupted by pandemic ,
increasing energy prices, technology disruption, 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 -
Strong track record of project management
– Cedc's Bankruptcy is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Ability to recruit top talent
– Cedc's Bankruptcy is one of the leading recruiters in the industry. Managers in the Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
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.
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.
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.
Ability to lead change in Finance & Accounting field
– Cedc's Bankruptcy 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 Cedc's Bankruptcy in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
High switching costs
– The high switching costs that Cedc's Bankruptcy 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.
Effective Research and Development (R&D)
– Cedc's Bankruptcy has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
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 -
Slow decision making process
– As mentioned earlier in the report, Cedc's Bankruptcy 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. Cedc's Bankruptcy 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.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Stuart C. Gilson, Sarah L. Abbott suggests that, Cedc's Bankruptcy 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 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.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Cedc's Bankruptcy 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.
Slow to strategic competitive environment developments
– As Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover HBR case study mentions - Cedc's Bankruptcy 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.
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.
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.
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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Central European Distribution Corporation: Hostile Takeover, Bankruptcy Makeover 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 Cedc's Bankruptcy has relatively successful track record of launching new products.
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 -
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.
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. Cedc's Bankruptcy 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. Cedc's Bankruptcy 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.
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. Cedc's Bankruptcy can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
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.
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.
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.
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.
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.
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.
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.
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.
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 Cedc's Bankruptcy 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.
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 -
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.
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.
Shortening product life cycle
– it is one of the major threat that Cedc's Bankruptcy is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
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.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Cedc's Bankruptcy 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.
Technology acceleration in Forth Industrial Revolution
– Cedc's Bankruptcy has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Cedc's Bankruptcy needs to keep up with the evolution of technology in the Finance & Accounting 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.
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.
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.
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.
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. Cedc's Bankruptcy 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.
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.
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.
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.
