Cash Flow Statement Confessions: Department Store Retailers (A) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Cash Flow Statement Confessions: Department Store Retailers (A)
A fellow named J. T. Funk is fascinated with the fact that there were often clear winners and clear losers in the competitive retail arena, and it did not seem to matter whether a retailer was big or small, old or new because any retailer could fail. Funk wonders if there would be any clues in the retailer financial statements he has in his possession that pointed to strength or portended weakness, and if so, what were the indicators of either?
Swot Analysis of "Cash Flow Statement Confessions: Department Store Retailers (A)" written by Mark E. Haskins includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Funk Retailer facing as an external strategic factors. Some of the topics covered in Cash Flow Statement Confessions: Department Store Retailers (A) case study are - Strategic Management Strategies, Budgeting and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Cash Flow Statement Confessions: Department Store Retailers (A) casestudy better are - – increasing commodity prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , wage bills are increasing, there is backlash against globalization, customer relationship management is fast transforming because of increasing concerns over data privacy,
competitive advantages are harder to sustain because of technology dispersion, increasing energy prices, etc
Introduction to SWOT Analysis of Cash Flow Statement Confessions: Department Store Retailers (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Cash Flow Statement Confessions: Department Store Retailers (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Funk Retailer, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Funk Retailer 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 Cash Flow Statement Confessions: Department Store Retailers (A) can be done for the following purposes –
1. Strategic planning using facts provided in Cash Flow Statement Confessions: Department Store Retailers (A) case study
2. Improving business portfolio management of Funk Retailer
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 Funk Retailer
Strengths Cash Flow Statement Confessions: Department Store Retailers (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Funk Retailer in Cash Flow Statement Confessions: Department Store Retailers (A) Harvard Business Review case study are -
Digital Transformation in Finance & Accounting segment
- digital transformation varies from industry to industry. For Funk Retailer digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Funk Retailer 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.
Superior customer experience
– The customer experience strategy of Funk Retailer in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Funk Retailer is present in almost all the verticals within the industry. This has provided firm in Cash Flow Statement Confessions: Department Store Retailers (A) 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.
Innovation driven organization
– Funk Retailer is one of the most innovative firm in sector. Manager in Cash Flow Statement Confessions: Department Store Retailers (A) 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
– Funk Retailer is one of the leading recruiters in the industry. Managers in the Cash Flow Statement Confessions: Department Store Retailers (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
High switching costs
– The high switching costs that Funk Retailer 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.
Ability to lead change in Finance & Accounting field
– Funk Retailer 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 Funk Retailer in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Analytics focus
– Funk Retailer 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 Mark E. Haskins 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.
Low bargaining power of suppliers
– Suppliers of Funk Retailer in the sector have low bargaining power. Cash Flow Statement Confessions: Department Store Retailers (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Funk Retailer to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Funk Retailer 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 Cash Flow Statement Confessions: Department Store Retailers (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Funk Retailer 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 Funk Retailer is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Cash Flow Statement Confessions: Department Store Retailers (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Training and development
– Funk Retailer has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Cash Flow Statement Confessions: Department Store Retailers (A) 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.
Weaknesses Cash Flow Statement Confessions: Department Store Retailers (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Cash Flow Statement Confessions: Department Store Retailers (A) are -
Increasing silos among functional specialists
– The organizational structure of Funk Retailer is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Funk Retailer needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Funk Retailer to focus more on services rather than just following the product oriented approach.
Products dominated business model
– Even though Funk Retailer 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 - Cash Flow Statement Confessions: Department Store Retailers (A) should strive to include more intangible value offerings along with its core products and services.
Need for greater diversity
– Funk Retailer 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 operating costs
– Compare to the competitors, firm in the HBR case study Cash Flow Statement Confessions: Department Store Retailers (A) 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 Funk Retailer 's lucrative customers.
High cash cycle compare to competitors
Funk Retailer 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Funk Retailer 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.
Skills based hiring
– The stress on hiring functional specialists at Funk Retailer 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.
Low market penetration in new markets
– Outside its home market of Funk Retailer, firm in the HBR case study Cash Flow Statement Confessions: Department Store Retailers (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Cash Flow Statement Confessions: Department Store Retailers (A) 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 Funk Retailer has relatively successful track record of launching new products.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Cash Flow Statement Confessions: Department Store Retailers (A), in the dynamic environment Funk Retailer has struggled to respond to the nimble upstart competition. Funk Retailer has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
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 Funk Retailer supply chain. Even after few cautionary changes mentioned in the HBR case study - Cash Flow Statement Confessions: Department Store Retailers (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Funk Retailer vulnerable to further global disruptions in South East Asia.
Opportunities Cash Flow Statement Confessions: Department Store Retailers (A) | 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 Cash Flow Statement Confessions: Department Store Retailers (A) are -
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Funk Retailer can use these opportunities to build new business models that can help the communities that Funk Retailer operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
Learning at scale
– Online learning technologies has now opened space for Funk Retailer 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.
Better consumer reach
– The expansion of the 5G network will help Funk Retailer to increase its market reach. Funk Retailer 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 Funk Retailer 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.
Building a culture of innovation
– managers at Funk Retailer can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Finance & Accounting segment.
Loyalty marketing
– Funk Retailer 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.
Using analytics as competitive advantage
– Funk Retailer 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 Cash Flow Statement Confessions: Department Store Retailers (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Funk Retailer to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Funk Retailer is facing challenges because of the dominance of functional experts in the organization. Cash Flow Statement Confessions: Department Store Retailers (A) 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.
Manufacturing automation
– Funk Retailer 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.
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 Funk Retailer in the consumer business. Now Funk Retailer can target international markets with far fewer capital restrictions requirements than the existing system.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Funk Retailer 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 Funk Retailer to hire the very best people irrespective of their geographical location.
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. Funk Retailer 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. Funk Retailer 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.
Leveraging digital technologies
– Funk Retailer 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.
Threats Cash Flow Statement Confessions: Department Store Retailers (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Cash Flow Statement Confessions: Department Store Retailers (A) are -
Regulatory challenges
– Funk Retailer 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.
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 Funk Retailer business can come under increasing regulations regarding data privacy, data security, etc.
Shortening product life cycle
– it is one of the major threat that Funk Retailer is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Consumer confidence and its impact on Funk Retailer 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.
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. Funk Retailer can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing wage structure of Funk Retailer
– 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 Funk Retailer.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Funk Retailer with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Environmental challenges
– Funk Retailer 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. Funk Retailer can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Stagnating economy with rate increase
– Funk Retailer 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.
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 Funk Retailer.
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.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Cash Flow Statement Confessions: Department Store Retailers (A), Funk Retailer 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 .
High dependence on third party suppliers
– Funk Retailer 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.
Weighted SWOT Analysis of Cash Flow Statement Confessions: Department Store Retailers (A) 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 Cash Flow Statement Confessions: Department Store Retailers (A) 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 Cash Flow Statement Confessions: Department Store Retailers (A) 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 Cash Flow Statement Confessions: Department Store Retailers (A) 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 Cash Flow Statement Confessions: Department Store Retailers (A) 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 Funk Retailer needs to make to build a sustainable competitive advantage.
