Using Accounting Analytics to Make an Investment Decision SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Finance & Accounting
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Using Accounting Analytics to Make an Investment Decision
In 2015, Hanuman Singh, a portfolio investor, was looking for investment opportunities in India. His friend Ram Naik suggested Singh invest in Tata Consultancy Services Limited, an information technology company based in Mumbai. Singh's normal practice was to look at the company balance sheets, understand the company's strategy, and then decide whether to invest. But he recently had a bitter investing experience when the company he invested in went bankrupt. Singh now understood that a deeper analysis was required before investing. He was looking for an accounting analysis that would give him insight into any possible manipulations so that his investment decision would yield his expected results. Jayasree Mangalagiri is affiliated with GITAM University.
Swot Analysis of "Using Accounting Analytics to Make an Investment Decision" written by Jayasree Mangalagiri, G. B. S. Naidu includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Singh Hanuman facing as an external strategic factors. Some of the topics covered in Using Accounting Analytics to Make an Investment Decision case study are - Strategic Management Strategies, Entrepreneurship, Ethics, Financial management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Using Accounting Analytics to Make an Investment Decision casestudy better are - – increasing energy prices, competitive advantages are harder to sustain because of technology dispersion, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation, increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, geopolitical disruptions,
challanges to central banks by blockchain based private currencies, wage bills are increasing, etc
Introduction to SWOT Analysis of Using Accounting Analytics to Make an Investment Decision
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Using Accounting Analytics to Make an Investment Decision case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Singh Hanuman, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Singh Hanuman 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 Using Accounting Analytics to Make an Investment Decision can be done for the following purposes –
1. Strategic planning using facts provided in Using Accounting Analytics to Make an Investment Decision case study
2. Improving business portfolio management of Singh Hanuman
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 Singh Hanuman
Strengths Using Accounting Analytics to Make an Investment Decision | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Singh Hanuman in Using Accounting Analytics to Make an Investment Decision Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Singh Hanuman in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Low bargaining power of suppliers
– Suppliers of Singh Hanuman in the sector have low bargaining power. Using Accounting Analytics to Make an Investment Decision has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Singh Hanuman to manage not only supply disruptions but also source products at highly competitive prices.
Analytics focus
– Singh Hanuman 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 Jayasree Mangalagiri, G. B. S. Naidu 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.
Organizational Resilience of Singh Hanuman
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Singh Hanuman does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Ability to lead change in Finance & Accounting field
– Singh Hanuman 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 Singh Hanuman in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Singh Hanuman 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 Using Accounting Analytics to Make an Investment Decision - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Singh Hanuman has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Singh Hanuman 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.
Ability to recruit top talent
– Singh Hanuman is one of the leading recruiters in the industry. Managers in the Using Accounting Analytics to Make an Investment Decision are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Learning organization
- Singh Hanuman 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 Singh Hanuman is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Using Accounting Analytics to Make an Investment Decision Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Diverse revenue streams
– Singh Hanuman is present in almost all the verticals within the industry. This has provided firm in Using Accounting Analytics to Make an Investment Decision 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.
Operational resilience
– The operational resilience strategy in the Using Accounting Analytics to Make an Investment Decision 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.
High brand equity
– Singh Hanuman has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Singh Hanuman to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Weaknesses Using Accounting Analytics to Make an Investment Decision | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Using Accounting Analytics to Make an Investment Decision are -
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Using Accounting Analytics to Make an Investment Decision, is just above the industry average. Singh Hanuman needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High 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 Singh Hanuman supply chain. Even after few cautionary changes mentioned in the HBR case study - Using Accounting Analytics to Make an Investment Decision, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Singh Hanuman vulnerable to further global disruptions in South East Asia.
Slow to strategic competitive environment developments
– As Using Accounting Analytics to Make an Investment Decision HBR case study mentions - Singh Hanuman 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.
Aligning sales with marketing
– It come across in the case study Using Accounting Analytics to Make an Investment Decision 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 Using Accounting Analytics to Make an Investment Decision can leverage the sales team experience to cultivate customer relationships as Singh Hanuman is planning to shift buying processes online.
Low market penetration in new markets
– Outside its home market of Singh Hanuman, firm in the HBR case study Using Accounting Analytics to Make an Investment Decision needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Increasing silos among functional specialists
– The organizational structure of Singh Hanuman is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Singh Hanuman needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Singh Hanuman to focus more on services rather than just following the product oriented approach.
High cash cycle compare to competitors
Singh Hanuman 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 dependence on star products
– The top 2 products and services of the firm as mentioned in the Using Accounting Analytics to Make an Investment Decision 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 Singh Hanuman has relatively successful track record of launching new products.
Lack of clear differentiation of Singh Hanuman products
– To increase the profitability and margins on the products, Singh Hanuman needs to provide more differentiated products than what it is currently offering in the marketplace.
Products dominated business model
– Even though Singh Hanuman 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 - Using Accounting Analytics to Make an Investment Decision should strive to include more intangible value offerings along with its core products and services.
Interest costs
– Compare to the competition, Singh Hanuman 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 Using Accounting Analytics to Make an Investment Decision | 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 Using Accounting Analytics to Make an Investment Decision are -
Better consumer reach
– The expansion of the 5G network will help Singh Hanuman to increase its market reach. Singh Hanuman 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.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Singh Hanuman 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.
Buying journey improvements
– Singh Hanuman can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Using Accounting Analytics to Make an Investment Decision 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.
Loyalty marketing
– Singh Hanuman 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.
Developing new processes and practices
– Singh Hanuman 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.
Learning at scale
– Online learning technologies has now opened space for Singh Hanuman 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.
Manufacturing automation
– Singh Hanuman 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.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Singh Hanuman 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, Using Accounting Analytics to Make an Investment Decision, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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. Singh Hanuman can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Leveraging digital technologies
– Singh Hanuman 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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Singh Hanuman can use these opportunities to build new business models that can help the communities that Singh Hanuman operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
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 Singh Hanuman 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.
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 Singh Hanuman in the consumer business. Now Singh Hanuman can target international markets with far fewer capital restrictions requirements than the existing system.
Threats Using Accounting Analytics to Make an Investment Decision External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Using Accounting Analytics to Make an Investment Decision are -
Regulatory challenges
– Singh Hanuman 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.
Stagnating economy with rate increase
– Singh Hanuman 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.
Environmental challenges
– Singh Hanuman 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. Singh Hanuman can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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.
Consumer confidence and its impact on Singh Hanuman 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.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Singh Hanuman 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 Using Accounting Analytics to Make an Investment Decision .
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 Singh Hanuman 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 Using Accounting Analytics to Make an Investment Decision, Singh Hanuman 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 .
Technology acceleration in Forth Industrial Revolution
– Singh Hanuman has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Singh Hanuman needs to keep up with the evolution of technology in the Finance & Accounting sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
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 Singh Hanuman business can come under increasing regulations regarding data privacy, data security, 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 Singh Hanuman.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Singh Hanuman with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
Weighted SWOT Analysis of Using Accounting Analytics to Make an Investment Decision 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 Using Accounting Analytics to Make an Investment Decision 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 Using Accounting Analytics to Make an Investment Decision 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 Using Accounting Analytics to Make an Investment Decision 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 Using Accounting Analytics to Make an Investment Decision 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 Singh Hanuman needs to make to build a sustainable competitive advantage.
