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 - – banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, there is increasing trade war between United States & China, wage bills are increasing, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, digital marketing is dominated by two big players Facebook and Google,
increasing energy prices, technology disruption, 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 -
Low bargaining power of suppliers
– Suppliers of Imn Activist in the sector have low bargaining power. Imation Corp.: An Activist Proxy Battle (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Imn Activist to manage not only supply disruptions but also source products at highly competitive prices.
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.
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.
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.
Effective Research and Development (R&D)
– Imn Activist 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 Imation Corp.: An Activist Proxy Battle (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
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.
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.
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.
Training and development
– Imn Activist has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Imation Corp.: An Activist Proxy Battle (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.
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.
Organizational Resilience of Imn Activist
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Imn Activist does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
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 -
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 bargaining power of channel partners
– Because of the regulatory requirements, Kenneth Eades, Kyle Perez suggests that, Imn Activist 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.
Skills based hiring
– The stress on hiring functional specialists at Imn Activist 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.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Imn Activist 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.
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.
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.
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.
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.
Products dominated business model
– Even though Imn Activist 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 - Imation Corp.: An Activist Proxy Battle (A) should strive to include more intangible value offerings along with its core products and services.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Imation Corp.: An Activist Proxy Battle (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 Imn Activist has relatively successful track record of launching new products.
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 -
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.
Learning at scale
– Online learning technologies has now opened space for Imn Activist 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.
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. Imn Activist can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Imn Activist can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Imn Activist can use these opportunities to build new business models that can help the communities that Imn Activist operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
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.
Buying journey improvements
– Imn Activist can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Imation Corp.: An Activist Proxy Battle (A) 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.
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.
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.
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.
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. Imn Activist 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. Imn Activist 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.
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.
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.
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 -
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Imn Activist in the Finance & Accounting industry. The Finance & Accounting industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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 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.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Imn Activist with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 .
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) .
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.
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 Imn Activist.
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.
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.
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.
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 Imn Activist in the Finance & Accounting sector and impact the bottomline of the organization.
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.
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.