Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
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Case Study Description of Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square
A principal at the hedge fund GBR Capital needed to determine how best to vote her fund's shares in the upcoming annual shareholders' meeting for Canadian Pacific (CP). For the previous decade, CP's shares had underperformed compared to its key Canadian rival, Canadian National Railway (CN). The key difference appeared to be CN's chief operating officer, who later became CN's chief executive officer. He was able to cut costs, which boosted CN's profits. In October 2011, Pershing Square, a hedge fund, acquired a 12.2 per cent stake in CP, investing a total of CA$1.1 billion, and proposed appointing CN's chief executive officer as CP's new chief executive officer. The principal at GBR Capital needed to investigate and quantify the extent to which an activist investor could unlock value in an under-performing firm.
Authors :: Stephen R. Foerster, W. Glenn Rowe, Chris Makuch, Ken Mark
Swot Analysis of "Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square" written by Stephen R. Foerster, W. Glenn Rowe, Chris Makuch, Ken Mark includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Cn's Gbr facing as an external strategic factors. Some of the topics covered in Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square case study are - Strategic Management Strategies, Financial analysis and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square casestudy better are - – increasing energy prices, wage bills are increasing, increasing household debt because of falling income levels, technology disruption, talent flight as more people leaving formal jobs, cloud computing is disrupting traditional business models, increasing commodity prices,
competitive advantages are harder to sustain because of technology dispersion, there is increasing trade war between United States & China, etc
Introduction to SWOT Analysis of Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Cn's Gbr, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Cn's Gbr 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 Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square can be done for the following purposes –
1. Strategic planning using facts provided in Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square case study
2. Improving business portfolio management of Cn's Gbr
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 Cn's Gbr
Strengths Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Cn's Gbr in Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square Harvard Business Review case study are -
Innovation driven organization
– Cn's Gbr is one of the most innovative firm in sector. Manager in Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Learning organization
- Cn's Gbr 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 Cn's Gbr is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Cross disciplinary teams
– Horizontal connected teams at the Cn's Gbr 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.
Strong track record of project management
– Cn's Gbr is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Operational resilience
– The operational resilience strategy in the Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square 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
– Cn's Gbr has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Cn's Gbr to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Organizational Resilience of Cn's Gbr
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Cn's Gbr does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Effective Research and Development (R&D)
– Cn's Gbr 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 Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Sustainable margins compare to other players in Finance & Accounting industry
– Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square firm has clearly differentiated products in the market place. This has enabled Cn's Gbr to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Cn's Gbr to invest into research and development (R&D) and innovation.
Ability to lead change in Finance & Accounting field
– Cn's Gbr 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 Cn's Gbr in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Superior customer experience
– The customer experience strategy of Cn's Gbr in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Cn's Gbr is present in almost all the verticals within the industry. This has provided firm in Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square 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.
Weaknesses Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square are -
Products dominated business model
– Even though Cn's Gbr 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 - Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square should strive to include more intangible value offerings along with its core products and services.
Increasing silos among functional specialists
– The organizational structure of Cn's Gbr is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Cn's Gbr needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Cn's Gbr to focus more on services rather than just following the product oriented approach.
No frontier risks strategy
– After analyzing the HBR case study Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square, 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.
Slow to strategic competitive environment developments
– As Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square HBR case study mentions - Cn's Gbr 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.
High operating costs
– Compare to the competitors, firm in the HBR case study Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square 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 Cn's Gbr 's lucrative customers.
High bargaining power of channel partners
– Because of the regulatory requirements, Stephen R. Foerster, W. Glenn Rowe, Chris Makuch, Ken Mark suggests that, Cn's Gbr is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
High cash cycle compare to competitors
Cn's Gbr 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square, in the dynamic environment Cn's Gbr has struggled to respond to the nimble upstart competition. Cn's Gbr has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Workers concerns about automation
– As automation is fast increasing in the segment, Cn's Gbr 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 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 Cn's Gbr supply chain. Even after few cautionary changes mentioned in the HBR case study - Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Cn's Gbr vulnerable to further global disruptions in South East Asia.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square 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 Cn's Gbr has relatively successful track record of launching new products.
Opportunities Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square | 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 Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Cn's Gbr 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 Cn's Gbr to hire the very best people irrespective of their geographical location.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Cn's Gbr can use these opportunities to build new business models that can help the communities that Cn's Gbr 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 Cn's Gbr 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.
Loyalty marketing
– Cn's Gbr 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.
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 Cn's Gbr 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.
Manufacturing automation
– Cn's Gbr 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, Cn's Gbr 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, Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square, 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. Cn's Gbr can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Developing new processes and practices
– Cn's Gbr 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.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Cn's Gbr can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Cn's Gbr 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. Cn's Gbr 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.
Using analytics as competitive advantage
– Cn's Gbr 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 Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Cn's Gbr to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Creating value in data economy
– The success of analytics program of Cn's Gbr has opened avenues for new revenue streams for the organization in the industry. This can help Cn's Gbr to build a more holistic ecosystem as suggested in the Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square case study. Cn's Gbr can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square are -
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Cn's Gbr will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
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.
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 Cn's Gbr in the Finance & Accounting sector and impact the bottomline of the organization.
Environmental challenges
– Cn's Gbr 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. Cn's Gbr can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
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. Cn's Gbr needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
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 Cn's Gbr business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Cn's Gbr 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 Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square .
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Cn's Gbr with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Consumer confidence and its impact on Cn's Gbr 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.
Shortening product life cycle
– it is one of the major threat that Cn's Gbr is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Stagnating economy with rate increase
– Cn's Gbr 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.
Regulatory challenges
– Cn's Gbr 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.
Technology acceleration in Forth Industrial Revolution
– Cn's Gbr has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Cn's Gbr 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.
Weighted SWOT Analysis of Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square 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 Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square 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 Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square 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 Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square 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 Unlocking Value at Canadian Pacific: The Proxy Battle with Pershing Square 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 Cn's Gbr needs to make to build a sustainable competitive advantage.