A "Compelling and Pre-emptive" Offer for the Valspar Corporation SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of A "Compelling and Pre-emptive" Offer for the Valspar Corporation
In May 2015, the chief executive officer (CEO) of the Valspar Corporation (Valspar) contacted the CEO of an industry competitor to discuss a potential strategic combination of the two companies. As discussions continued, Valspar's board and senior management realized that an alternative strategic collaboration might be more beneficial, so Valspar then contacted the CEO of the second-largest comparable firm in the industry, Sherwin-Williams, which had previously expressed an interest in a business combination with Valspar. Valspar was awaiting a "compelling and pre-emptive" offer from Sherwin-Williams on an "accelerated timetable." However, several questions remained. What maximum price could be justified in a bidding contest? What was the probability that antitrust regulators would eventually block the deal, resulting in a waste of time and resources to structure a deal that would later collapse? Could the negotiating teams for Valspar and Sherwin-Williams structure the merger agreement to allow for a potential consent decree? Mark Simonson is affiliated with Arizona State University.
Swot Analysis of "A "Compelling and Pre-emptive" Offer for the Valspar Corporation" written by Mark Simonson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Valspar Sherwin facing as an external strategic factors. Some of the topics covered in A "Compelling and Pre-emptive" Offer for the Valspar Corporation case study are - Strategic Management Strategies, Manufacturing, Mergers & acquisitions and Finance & Accounting.
Some of the macro environment factors that can be used to understand the A "Compelling and Pre-emptive" Offer for the Valspar Corporation casestudy better are - – cloud computing is disrupting traditional business models, banking and financial system is disrupted by Bitcoin and other crypto currencies, technology disruption, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%,
increasing energy prices, wage bills are increasing, etc
Introduction to SWOT Analysis of A "Compelling and Pre-emptive" Offer for the Valspar Corporation
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in A "Compelling and Pre-emptive" Offer for the Valspar Corporation case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Valspar Sherwin, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Valspar Sherwin 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 A "Compelling and Pre-emptive" Offer for the Valspar Corporation can be done for the following purposes –
1. Strategic planning using facts provided in A "Compelling and Pre-emptive" Offer for the Valspar Corporation case study
2. Improving business portfolio management of Valspar Sherwin
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 Valspar Sherwin
Strengths A "Compelling and Pre-emptive" Offer for the Valspar Corporation | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Valspar Sherwin in A "Compelling and Pre-emptive" Offer for the Valspar Corporation Harvard Business Review case study are -
Training and development
– Valspar Sherwin has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in A "Compelling and Pre-emptive" Offer for the Valspar Corporation 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.
Successful track record of launching new products
– Valspar Sherwin has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Valspar Sherwin 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.
Organizational Resilience of Valspar Sherwin
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Valspar Sherwin does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Diverse revenue streams
– Valspar Sherwin is present in almost all the verticals within the industry. This has provided firm in A "Compelling and Pre-emptive" Offer for the Valspar Corporation 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.
Effective Research and Development (R&D)
– Valspar Sherwin 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 A "Compelling and Pre-emptive" Offer for the Valspar Corporation - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Valspar Sherwin in the sector have low bargaining power. A "Compelling and Pre-emptive" Offer for the Valspar Corporation has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Valspar Sherwin to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Valspar Sherwin has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Valspar Sherwin to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Highly skilled collaborators
– Valspar Sherwin 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 A "Compelling and Pre-emptive" Offer for the Valspar Corporation HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
High switching costs
– The high switching costs that Valspar Sherwin 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.
Learning organization
- Valspar Sherwin 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 Valspar Sherwin is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in A "Compelling and Pre-emptive" Offer for the Valspar Corporation Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Innovation driven organization
– Valspar Sherwin is one of the most innovative firm in sector. Manager in A "Compelling and Pre-emptive" Offer for the Valspar Corporation Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Ability to recruit top talent
– Valspar Sherwin is one of the leading recruiters in the industry. Managers in the A "Compelling and Pre-emptive" Offer for the Valspar Corporation are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Weaknesses A "Compelling and Pre-emptive" Offer for the Valspar Corporation | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of A "Compelling and Pre-emptive" Offer for the Valspar Corporation are -
Increasing silos among functional specialists
– The organizational structure of Valspar Sherwin is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Valspar Sherwin needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Valspar Sherwin to focus more on services rather than just following the product oriented approach.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study A "Compelling and Pre-emptive" Offer for the Valspar Corporation, in the dynamic environment Valspar Sherwin has struggled to respond to the nimble upstart competition. Valspar Sherwin has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Valspar Sherwin products
– To increase the profitability and margins on the products, Valspar Sherwin needs to provide more differentiated products than what it is currently offering in the marketplace.
Aligning sales with marketing
– It come across in the case study A "Compelling and Pre-emptive" Offer for the Valspar Corporation 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 A "Compelling and Pre-emptive" Offer for the Valspar Corporation can leverage the sales team experience to cultivate customer relationships as Valspar Sherwin is planning to shift buying processes online.
Need for greater diversity
– Valspar Sherwin has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High cash cycle compare to competitors
Valspar Sherwin 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.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study A "Compelling and Pre-emptive" Offer for the Valspar Corporation, it seems that the employees of Valspar Sherwin 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.
Slow decision making process
– As mentioned earlier in the report, Valspar Sherwin 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. Valspar Sherwin 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, Valspar Sherwin 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, Valspar Sherwin 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.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the A "Compelling and Pre-emptive" Offer for the Valspar Corporation 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 Valspar Sherwin has relatively successful track record of launching new products.
Opportunities A "Compelling and Pre-emptive" Offer for the Valspar Corporation | 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 A "Compelling and Pre-emptive" Offer for the Valspar Corporation are -
Learning at scale
– Online learning technologies has now opened space for Valspar Sherwin 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.
Leveraging digital technologies
– Valspar Sherwin 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.
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. Valspar Sherwin can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Valspar Sherwin 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 A "Compelling and Pre-emptive" Offer for the Valspar Corporation - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Valspar Sherwin to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
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. Valspar Sherwin 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. Valspar Sherwin 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.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Valspar Sherwin in the consumer business. Now Valspar Sherwin can target international markets with far fewer capital restrictions requirements than the existing system.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Valspar Sherwin is facing challenges because of the dominance of functional experts in the organization. A "Compelling and Pre-emptive" Offer for the Valspar Corporation 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 Valspar Sherwin 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 Valspar Sherwin 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, Valspar Sherwin 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, A "Compelling and Pre-emptive" Offer for the Valspar Corporation, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Manufacturing automation
– Valspar Sherwin 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 Valspar Sherwin 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.
Buying journey improvements
– Valspar Sherwin can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. A "Compelling and Pre-emptive" Offer for the Valspar Corporation 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.
Creating value in data economy
– The success of analytics program of Valspar Sherwin has opened avenues for new revenue streams for the organization in the industry. This can help Valspar Sherwin to build a more holistic ecosystem as suggested in the A "Compelling and Pre-emptive" Offer for the Valspar Corporation case study. Valspar Sherwin can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats A "Compelling and Pre-emptive" Offer for the Valspar Corporation External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study A "Compelling and Pre-emptive" Offer for the Valspar Corporation are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Valspar Sherwin 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 A "Compelling and Pre-emptive" Offer for the Valspar Corporation .
Increasing wage structure of Valspar Sherwin
– 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 Valspar Sherwin.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study A "Compelling and Pre-emptive" Offer for the Valspar Corporation, Valspar Sherwin 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 .
Stagnating economy with rate increase
– Valspar Sherwin 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.
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 Valspar Sherwin business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Valspar Sherwin is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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 Valspar Sherwin.
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. Valspar Sherwin needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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.
Environmental challenges
– Valspar Sherwin 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. Valspar Sherwin 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 Valspar Sherwin in the Finance & Accounting sector and impact the bottomline of the organization.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Valspar Sherwin with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Weighted SWOT Analysis of A "Compelling and Pre-emptive" Offer for the Valspar Corporation 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 A "Compelling and Pre-emptive" Offer for the Valspar Corporation 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 A "Compelling and Pre-emptive" Offer for the Valspar Corporation 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 A "Compelling and Pre-emptive" Offer for the Valspar Corporation 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 A "Compelling and Pre-emptive" Offer for the Valspar Corporation 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 Valspar Sherwin needs to make to build a sustainable competitive advantage.