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 - – geopolitical disruptions, increasing transportation and logistics costs, increasing government debt because of Covid-19 spendings, increasing commodity prices, cloud computing is disrupting traditional business models, supply chains are disrupted by pandemic , increasing household debt because of falling income levels,
digital marketing is dominated by two big players Facebook and Google, competitive advantages are harder to sustain because of technology dispersion, 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 -
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.
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Valspar Sherwin digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Valspar Sherwin 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.
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.
Operational resilience
– The operational resilience strategy in the A "Compelling and Pre-emptive" Offer for the Valspar Corporation 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.
Cross disciplinary teams
– Horizontal connected teams at the Valspar Sherwin are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
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.
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.
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.
Sustainable margins compare to other players in Finance & Accounting industry
– A "Compelling and Pre-emptive" Offer for the Valspar Corporation firm has clearly differentiated products in the market place. This has enabled Valspar Sherwin to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Valspar Sherwin to invest into research and development (R&D) and innovation.
Superior customer experience
– The customer experience strategy of Valspar Sherwin in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
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.
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 -
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 Valspar Sherwin supply chain. Even after few cautionary changes mentioned in the HBR case study - A "Compelling and Pre-emptive" Offer for the Valspar Corporation, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Valspar Sherwin vulnerable to further global disruptions in South East Asia.
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.
Slow to strategic competitive environment developments
– As A "Compelling and Pre-emptive" Offer for the Valspar Corporation HBR case study mentions - Valspar Sherwin 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.
Skills based hiring
– The stress on hiring functional specialists at Valspar Sherwin 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.
Products dominated business model
– Even though Valspar Sherwin has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - A "Compelling and Pre-emptive" Offer for the Valspar Corporation should strive to include more intangible value offerings along with its core products and services.
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.
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.
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.
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.
No frontier risks strategy
– After analyzing the HBR case study A "Compelling and Pre-emptive" Offer for the Valspar Corporation, it seems that company is thinking about the frontier risks that can impact Finance & Accounting strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Low market penetration in new markets
– Outside its home market of Valspar Sherwin, firm in the HBR case study A "Compelling and Pre-emptive" Offer for the Valspar Corporation needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
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.
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.
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.
Better consumer reach
– The expansion of the 5G network will help Valspar Sherwin to increase its market reach. Valspar Sherwin 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Valspar Sherwin can use these opportunities to build new business models that can help the communities that Valspar Sherwin operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Valspar Sherwin in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.
Leveraging digital technologies
– 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.
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.
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.
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.
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.
Developing new processes and practices
– Valspar Sherwin 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.
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.
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 -
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.
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 .
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.
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.
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.
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.
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
– Valspar Sherwin 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.
Easy access to finance
– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Valspar Sherwin can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Valspar Sherwin 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.
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.
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.
Consumer confidence and its impact on Valspar Sherwin 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.
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.
