Case Study Description of Imation Corp.: An Activist Proxy Battle (A)
The A case in this series takes the viewpoint of a senior portfolio manager who has to decide how to vote the shares held by Wells Fargo Asset Management: she can vote for the current board members of Imation Corp. (IMN) or for the nominees put forward by an activist hedge fund. The hedge fund sent an open letter to IMN shareholders seeking support to replace the key members of IMN's board, as the first step in pushing through sweeping changes in compensation and strategy at IMN. The case illustrates the power of an activist investor to change the governance and strategy of a company. The B case reveals that the activist's nominees were elected, and a series of decisions ensued that dismantled IMN. The case presents students with ethical questions regarding the treatment of IMN shareholders; it also highlights the influence of proxy advisers in a proxy vote. The case has been taught in an MBA corporate finance elective as the second class in activism, following another activist case, "Genzyme and Relational Investors: Science and Business Collide?" (UVA-F-1660). It can be taught to all undergraduate and graduate levels of business students, as well as seasoned executives.
Swot Analysis of "Imation Corp.: An Activist Proxy Battle (A)" written by Kenneth Eades, Kyle Perez includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Imn Activist facing as an external strategic factors. Some of the topics covered in Imation Corp.: An Activist Proxy Battle (A) case study are - Strategic Management Strategies, Financial management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Imation Corp.: An Activist Proxy Battle (A) casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, challanges to central banks by blockchain based private currencies, increasing energy prices, banking and financial system is disrupted by Bitcoin and other crypto currencies, wage bills are increasing, talent flight as more people leaving formal jobs, there is increasing trade war between United States & China,
increasing inequality as vast percentage of new income is going to the top 1%, geopolitical disruptions, etc
Introduction to SWOT Analysis of Imation Corp.: An Activist Proxy Battle (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Imation Corp.: An Activist Proxy Battle (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Imn Activist, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Imn Activist 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 Imation Corp.: An Activist Proxy Battle (A) can be done for the following purposes –
1. Strategic planning using facts provided in Imation Corp.: An Activist Proxy Battle (A) case study
2. Improving business portfolio management of Imn Activist
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 Imn Activist
Strengths Imation Corp.: An Activist Proxy Battle (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Imn Activist in Imation Corp.: An Activist Proxy Battle (A) Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the Imation Corp.: An Activist Proxy Battle (A) 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.
Ability to recruit top talent
– Imn Activist is one of the leading recruiters in the industry. Managers in the Imation Corp.: An Activist Proxy Battle (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.
Sustainable margins compare to other players in Finance & Accounting industry
– Imation Corp.: An Activist Proxy Battle (A) firm has clearly differentiated products in the market place. This has enabled Imn Activist to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Imn Activist to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Imn Activist 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 Imation Corp.: An Activist Proxy Battle (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Successful track record of launching new products
– Imn Activist has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Imn Activist 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.
Cross disciplinary teams
– Horizontal connected teams at the Imn Activist 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.
Learning organization
- Imn Activist 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 Imn Activist is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Imation Corp.: An Activist Proxy Battle (A) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Imn Activist 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.
Superior customer experience
– The customer experience strategy of Imn Activist in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Imn Activist has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Imn Activist to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Imn Activist 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 Kenneth Eades, Kyle Perez 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.
Ability to lead change in Finance & Accounting field
– Imn Activist 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 Imn Activist in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Weaknesses Imation Corp.: An Activist Proxy Battle (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Imation Corp.: An Activist Proxy Battle (A) are -
Lack of clear differentiation of Imn Activist products
– To increase the profitability and margins on the products, Imn Activist needs to provide more differentiated products than what it is currently offering in the marketplace.
No frontier risks strategy
– After analyzing the HBR case study Imation Corp.: An Activist Proxy Battle (A), 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.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Imation Corp.: An Activist Proxy Battle (A), is just above the industry average. Imn Activist 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 operating costs
– Compare to the competitors, firm in the HBR case study Imation Corp.: An Activist Proxy Battle (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 Imn Activist 's lucrative customers.
Need for greater diversity
– Imn Activist has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
High cash cycle compare to competitors
Imn Activist 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.
Low market penetration in new markets
– Outside its home market of Imn Activist, firm in the HBR case study Imation Corp.: An Activist Proxy Battle (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Imation Corp.: An Activist Proxy Battle (A), in the dynamic environment Imn Activist has struggled to respond to the nimble upstart competition. Imn Activist 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 Imn Activist supply chain. Even after few cautionary changes mentioned in the HBR case study - Imation Corp.: An Activist Proxy Battle (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Imn Activist vulnerable to further global disruptions in South East Asia.
Increasing silos among functional specialists
– The organizational structure of Imn Activist is dominated by functional specialists. It is not different from other players in the Finance & Accounting segment. Imn Activist needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Imn Activist to focus more on services rather than just following the product oriented approach.
Slow to strategic competitive environment developments
– As Imation Corp.: An Activist Proxy Battle (A) HBR case study mentions - Imn Activist 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.
Opportunities Imation Corp.: An Activist Proxy Battle (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 Imation Corp.: An Activist Proxy Battle (A) are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Imn Activist can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Imn Activist can explore opportunities that can attract volunteers and are consistent with its mission and vision.
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 Imn Activist in the consumer business. Now Imn Activist can target international markets with far fewer capital restrictions requirements than the existing system.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Imn Activist 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, Imation Corp.: An Activist Proxy Battle (A), 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 Imn Activist to increase its market reach. Imn Activist 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 Imn Activist 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.
Using analytics as competitive advantage
– Imn Activist 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 Imation Corp.: An Activist Proxy Battle (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Imn Activist to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Imn Activist 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.
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 Imn Activist 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.
Developing new processes and practices
– Imn Activist 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.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Imn Activist 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 Imn Activist to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Imn Activist 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.
Loyalty marketing
– Imn Activist 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.
Threats Imation Corp.: An Activist Proxy Battle (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Imation Corp.: An Activist Proxy Battle (A) are -
Environmental challenges
– Imn Activist 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. Imn Activist can take advantage of this fund but it will also bring new competitors in the Finance & Accounting industry.
Increasing wage structure of Imn Activist
– 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 Imn Activist.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Imation Corp.: An Activist Proxy Battle (A), Imn Activist 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 .
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.
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. Imn Activist can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Imn Activist 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 Imation Corp.: An Activist Proxy Battle (A) .
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.
High dependence on third party suppliers
– Imn Activist 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.
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 Imn Activist business can come under increasing regulations regarding data privacy, data security, etc.
Stagnating economy with rate increase
– Imn Activist 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.
Shortening product life cycle
– it is one of the major threat that Imn Activist is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
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. Imn Activist 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.
Consumer confidence and its impact on Imn Activist 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 Imation Corp.: An Activist Proxy Battle (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 Imation Corp.: An Activist Proxy Battle (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 Imation Corp.: An Activist Proxy Battle (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 Imation Corp.: An Activist Proxy Battle (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 Imation Corp.: An Activist Proxy Battle (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 Imn Activist needs to make to build a sustainable competitive advantage.
