Case Study Description of KPMG Peat Marwick: The Shadow Partner
KPMG Peat Marwick executives needed to decide whether to fund full development of "The Shadow Partner," the name coined to describe a worldwide information network that would link all KPMG professionals to each other and to a wealth of data bases and information services. Partners, by sharing and gathering information through the network, would be able to use the entire company's knowledge and experience to serve clients. Many partners felt that implementation of the shadow partner was vital, as clients had greater demands and competition in the accounting industry had escalated. Other partners questioned the necessity of the shadow partner. The firm had committed to establishing a technology committee to investigate shadow partner design and cost. Since the firm was a partnership, the partners eventually had to decide whether, and to what extent, to support shadow partner implementation.
Swot Analysis of "KPMG Peat Marwick: The Shadow Partner" written by Robert G. Eccles, Julie Gladstone includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Shadow Partner facing as an external strategic factors. Some of the topics covered in KPMG Peat Marwick: The Shadow Partner case study are - Strategic Management Strategies, Decision making, IT, Joint ventures, Knowledge management, Networking, Project management, Strategy execution and Technology & Operations.
Some of the macro environment factors that can be used to understand the KPMG Peat Marwick: The Shadow Partner casestudy better are - – cloud computing is disrupting traditional business models, talent flight as more people leaving formal jobs, technology disruption, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion,
there is increasing trade war between United States & China, increasing commodity prices, etc
Introduction to SWOT Analysis of KPMG Peat Marwick: The Shadow Partner
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in KPMG Peat Marwick: The Shadow Partner case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Shadow Partner, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Shadow Partner 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 KPMG Peat Marwick: The Shadow Partner can be done for the following purposes –
1. Strategic planning using facts provided in KPMG Peat Marwick: The Shadow Partner case study
2. Improving business portfolio management of Shadow Partner
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Shadow Partner
Strengths KPMG Peat Marwick: The Shadow Partner | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Shadow Partner in KPMG Peat Marwick: The Shadow Partner Harvard Business Review case study are -
Strong track record of project management
– Shadow Partner is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Learning organization
- Shadow Partner 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 Shadow Partner is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in KPMG Peat Marwick: The Shadow Partner Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Shadow Partner is present in almost all the verticals within the industry. This has provided firm in KPMG Peat Marwick: The Shadow Partner 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.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Shadow Partner digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Shadow Partner 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.
Effective Research and Development (R&D)
– Shadow Partner 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 KPMG Peat Marwick: The Shadow Partner - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Organizational Resilience of Shadow Partner
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Shadow Partner does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to recruit top talent
– Shadow Partner is one of the leading recruiters in the industry. Managers in the KPMG Peat Marwick: The Shadow Partner are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Superior customer experience
– The customer experience strategy of Shadow Partner in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Highly skilled collaborators
– Shadow Partner 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 KPMG Peat Marwick: The Shadow Partner HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High brand equity
– Shadow Partner has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Shadow Partner to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Low bargaining power of suppliers
– Suppliers of Shadow Partner in the sector have low bargaining power. KPMG Peat Marwick: The Shadow Partner has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Shadow Partner to manage not only supply disruptions but also source products at highly competitive prices.
Sustainable margins compare to other players in Technology & Operations industry
– KPMG Peat Marwick: The Shadow Partner firm has clearly differentiated products in the market place. This has enabled Shadow Partner to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Shadow Partner to invest into research and development (R&D) and innovation.
Weaknesses KPMG Peat Marwick: The Shadow Partner | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of KPMG Peat Marwick: The Shadow Partner are -
Lack of clear differentiation of Shadow Partner products
– To increase the profitability and margins on the products, Shadow Partner needs to provide more differentiated products than what it is currently offering in the marketplace.
Slow decision making process
– As mentioned earlier in the report, Shadow Partner 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. Shadow Partner 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.
Capital Spending Reduction
– Even during the low interest decade, Shadow Partner 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, Shadow Partner 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.
Aligning sales with marketing
– It come across in the case study KPMG Peat Marwick: The Shadow Partner 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 KPMG Peat Marwick: The Shadow Partner can leverage the sales team experience to cultivate customer relationships as Shadow Partner is planning to shift buying processes online.
High bargaining power of channel partners
– Because of the regulatory requirements, Robert G. Eccles, Julie Gladstone suggests that, Shadow Partner 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.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Shadow Partner is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study KPMG Peat Marwick: The Shadow Partner can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Increasing silos among functional specialists
– The organizational structure of Shadow Partner is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Shadow Partner needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Shadow Partner to focus more on services rather than just following the product oriented approach.
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 Shadow Partner supply chain. Even after few cautionary changes mentioned in the HBR case study - KPMG Peat Marwick: The Shadow Partner, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Shadow Partner vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Shadow Partner 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.
Interest costs
– Compare to the competition, Shadow Partner 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.
Opportunities KPMG Peat Marwick: The Shadow Partner | 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 KPMG Peat Marwick: The Shadow Partner are -
Leveraging digital technologies
– Shadow Partner 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.
Manufacturing automation
– Shadow Partner can use the latest technology developments to improve its manufacturing and designing process in Technology & Operations 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, Shadow Partner is facing challenges because of the dominance of functional experts in the organization. KPMG Peat Marwick: The Shadow Partner 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Shadow Partner 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 Shadow Partner to hire the very best people irrespective of their geographical location.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Shadow Partner 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. Shadow Partner 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.
Better consumer reach
– The expansion of the 5G network will help Shadow Partner to increase its market reach. Shadow Partner 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.
Using analytics as competitive advantage
– Shadow Partner 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 KPMG Peat Marwick: The Shadow Partner - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Shadow Partner to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Low interest rates
– Even though inflation is raising its head in most developed economies, Shadow Partner 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.
Building a culture of innovation
– managers at Shadow Partner 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 Technology & Operations segment.
Creating value in data economy
– The success of analytics program of Shadow Partner has opened avenues for new revenue streams for the organization in the industry. This can help Shadow Partner to build a more holistic ecosystem as suggested in the KPMG Peat Marwick: The Shadow Partner case study. Shadow Partner 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, Shadow Partner can use these opportunities to build new business models that can help the communities that Shadow Partner operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Developing new processes and practices
– Shadow Partner can develop new processes and procedures in Technology & Operations 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 Shadow Partner 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.
Threats KPMG Peat Marwick: The Shadow Partner External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study KPMG Peat Marwick: The Shadow Partner are -
Stagnating economy with rate increase
– Shadow Partner 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.
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 Shadow Partner business can come under increasing regulations regarding data privacy, data security, etc.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Shadow Partner can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
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. Shadow Partner 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.
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.
Increasing wage structure of Shadow Partner
– 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 Shadow Partner.
High dependence on third party suppliers
– Shadow Partner 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.
Regulatory challenges
– Shadow Partner 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 Technology & Operations industry regulations.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Shadow Partner in the Technology & Operations industry. The Technology & Operations 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 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.
Technology acceleration in Forth Industrial Revolution
– Shadow Partner has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Shadow Partner needs to keep up with the evolution of technology in the Technology & Operations 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.
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 Shadow Partner.
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. Shadow Partner needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Weighted SWOT Analysis of KPMG Peat Marwick: The Shadow Partner 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 KPMG Peat Marwick: The Shadow Partner 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 KPMG Peat Marwick: The Shadow Partner 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 KPMG Peat Marwick: The Shadow Partner 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 KPMG Peat Marwick: The Shadow Partner 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 Shadow Partner needs to make to build a sustainable competitive advantage.