The Toshiba Accounting Scandal: How Corporate Governance Failed SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of The Toshiba Accounting Scandal: How Corporate Governance Failed
In 2015, Toshiba, a conglomerate best known throughout the world for its electronics products, announced to the world that it has overstated profits by 151.8 billion yen (US$1.2 billion) over a seven-year period. The conduct of Toshiba's management and employees left a deep stain on Japan that threw corporate culture and corporate governance practices into turmoil. This case presents a comprehensive overview of the Toshiba accounting scandal. It examines how the accounting irregularities in evidence at Toshiba spread from a relatively minor case of accounting misrepresentation to corporate-wide deception ingrained in the cultural fabric of the organization. The research highlights how issues of corporate culture can undermine even the most robust corporate governance strategies, and examines some of the challenges Toshiba faces in its attempts to recover from the biggest accounting scandal in contemporary Japanese history.
Swot Analysis of "The Toshiba Accounting Scandal: How Corporate Governance Failed" written by Mitsuru Misawa includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Toshiba Accounting facing as an external strategic factors. Some of the topics covered in The Toshiba Accounting Scandal: How Corporate Governance Failed case study are - Strategic Management Strategies, Communication, Corporate governance, Crisis communication, Crisis management, Transparency and Finance & Accounting.
Some of the macro environment factors that can be used to understand the The Toshiba Accounting Scandal: How Corporate Governance Failed casestudy better are - – digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, increasing commodity prices, there is backlash against globalization, wage bills are increasing, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing government debt because of Covid-19 spendings,
increasing household debt because of falling income levels, central banks are concerned over increasing inflation, etc
Introduction to SWOT Analysis of The Toshiba Accounting Scandal: How Corporate Governance Failed
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in The Toshiba Accounting Scandal: How Corporate Governance Failed case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Toshiba Accounting, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Toshiba Accounting 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 The Toshiba Accounting Scandal: How Corporate Governance Failed can be done for the following purposes –
1. Strategic planning using facts provided in The Toshiba Accounting Scandal: How Corporate Governance Failed case study
2. Improving business portfolio management of Toshiba Accounting
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 Toshiba Accounting
Strengths The Toshiba Accounting Scandal: How Corporate Governance Failed | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Toshiba Accounting in The Toshiba Accounting Scandal: How Corporate Governance Failed Harvard Business Review case study are -
High brand equity
– Toshiba Accounting has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Toshiba Accounting to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Superior customer experience
– The customer experience strategy of Toshiba Accounting in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to lead change in Finance & Accounting field
– Toshiba Accounting 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 Toshiba Accounting in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Diverse revenue streams
– Toshiba Accounting is present in almost all the verticals within the industry. This has provided firm in The Toshiba Accounting Scandal: How Corporate Governance Failed 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.
Ability to recruit top talent
– Toshiba Accounting is one of the leading recruiters in the industry. Managers in the The Toshiba Accounting Scandal: How Corporate Governance Failed are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Toshiba Accounting 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 Mitsuru Misawa 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.
Strong track record of project management
– Toshiba Accounting is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Toshiba Accounting 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.
Training and development
– Toshiba Accounting has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in The Toshiba Accounting Scandal: How Corporate Governance Failed 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.
Sustainable margins compare to other players in Finance & Accounting industry
– The Toshiba Accounting Scandal: How Corporate Governance Failed firm has clearly differentiated products in the market place. This has enabled Toshiba Accounting to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Toshiba Accounting to invest into research and development (R&D) and innovation.
Operational resilience
– The operational resilience strategy in the The Toshiba Accounting Scandal: How Corporate Governance Failed 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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Toshiba Accounting digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Toshiba Accounting 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.
Weaknesses The Toshiba Accounting Scandal: How Corporate Governance Failed | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of The Toshiba Accounting Scandal: How Corporate Governance Failed 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 Toshiba Accounting supply chain. Even after few cautionary changes mentioned in the HBR case study - The Toshiba Accounting Scandal: How Corporate Governance Failed, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Toshiba Accounting vulnerable to further global disruptions in South East Asia.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study The Toshiba Accounting Scandal: How Corporate Governance Failed, is just above the industry average. Toshiba Accounting 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study The Toshiba Accounting Scandal: How Corporate Governance Failed, it seems that the employees of Toshiba Accounting 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.
High cash cycle compare to competitors
Toshiba Accounting 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.
High bargaining power of channel partners
– Because of the regulatory requirements, Mitsuru Misawa suggests that, Toshiba Accounting 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.
Low market penetration in new markets
– Outside its home market of Toshiba Accounting, firm in the HBR case study The Toshiba Accounting Scandal: How Corporate Governance Failed needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Toshiba Accounting is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Toshiba Accounting needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Toshiba Accounting to focus more on services rather than just following the product oriented approach.
Lack of clear differentiation of Toshiba Accounting products
– To increase the profitability and margins on the products, Toshiba Accounting needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study The Toshiba Accounting Scandal: How Corporate Governance Failed, in the dynamic environment Toshiba Accounting has struggled to respond to the nimble upstart competition. Toshiba Accounting has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High operating costs
– Compare to the competitors, firm in the HBR case study The Toshiba Accounting Scandal: How Corporate Governance Failed 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 Toshiba Accounting 's lucrative customers.
Capital Spending Reduction
– Even during the low interest decade, Toshiba Accounting 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.
Opportunities The Toshiba Accounting Scandal: How Corporate Governance Failed | 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 The Toshiba Accounting Scandal: How Corporate Governance Failed are -
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Toshiba Accounting 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, The Toshiba Accounting Scandal: How Corporate Governance Failed, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Low interest rates
– Even though inflation is raising its head in most developed economies, Toshiba Accounting 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.
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 Toshiba Accounting 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.
Learning at scale
– Online learning technologies has now opened space for Toshiba Accounting to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Toshiba Accounting 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 Toshiba Accounting to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Toshiba Accounting 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.
Manufacturing automation
– Toshiba Accounting 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.
Loyalty marketing
– Toshiba Accounting 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Toshiba Accounting can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
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. Toshiba Accounting 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. Toshiba Accounting 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 Toshiba Accounting to increase its market reach. Toshiba Accounting will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Creating value in data economy
– The success of analytics program of Toshiba Accounting has opened avenues for new revenue streams for the organization in the industry. This can help Toshiba Accounting to build a more holistic ecosystem as suggested in the The Toshiba Accounting Scandal: How Corporate Governance Failed case study. Toshiba Accounting can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Developing new processes and practices
– Toshiba Accounting 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.
Threats The Toshiba Accounting Scandal: How Corporate Governance Failed External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study The Toshiba Accounting Scandal: How Corporate Governance Failed are -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Toshiba Accounting 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.
Consumer confidence and its impact on Toshiba Accounting 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.
High dependence on third party suppliers
– Toshiba Accounting 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.
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 Toshiba Accounting.
Stagnating economy with rate increase
– Toshiba Accounting 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.
Shortening product life cycle
– it is one of the major threat that Toshiba Accounting is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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.
Regulatory challenges
– Toshiba Accounting 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
– Toshiba Accounting 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. Toshiba Accounting can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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 Toshiba Accounting 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 The Toshiba Accounting Scandal: How Corporate Governance Failed, Toshiba Accounting 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 .
Increasing wage structure of Toshiba Accounting
– 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 Toshiba Accounting.
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. Toshiba Accounting 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.
Weighted SWOT Analysis of The Toshiba Accounting Scandal: How Corporate Governance Failed 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 The Toshiba Accounting Scandal: How Corporate Governance Failed 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 The Toshiba Accounting Scandal: How Corporate Governance Failed 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 The Toshiba Accounting Scandal: How Corporate Governance Failed 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 The Toshiba Accounting Scandal: How Corporate Governance Failed 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 Toshiba Accounting needs to make to build a sustainable competitive advantage.
