Case Study Description of Langtry Falls Expansion Plan
It was generally accepted that the weighted average cost of capital (WACC) for a company reflected an appropriate hurdle rate (minimum return or benchmark) for that company's investments. But a WACC for Langtry Falls could not be calculated because the company did not have publicly traded stock, a critical source of one input to the calculation. However, the benchmark for publicly traded competing companies would be meaningful to Langtry-these companies were facing the same underlying risks and competing under the same economic conditions. An average of the industry WACCs would be a defensible and informative benchmark for Langtry.
Swot Analysis of "Langtry Falls Expansion Plan" written by Marc Lipson includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Langtry Benchmark facing as an external strategic factors. Some of the topics covered in Langtry Falls Expansion Plan case study are - Strategic Management Strategies, Financial management and Finance & Accounting.
Some of the macro environment factors that can be used to understand the Langtry Falls Expansion Plan casestudy better are - – increasing inequality as vast percentage of new income is going to the top 1%, cloud computing is disrupting traditional business models, increasing commodity prices, wage bills are increasing, increasing government debt because of Covid-19 spendings, increasing transportation and logistics costs, competitive advantages are harder to sustain because of technology dispersion,
central banks are concerned over increasing inflation, banking and financial system is disrupted by Bitcoin and other crypto currencies, etc
Introduction to SWOT Analysis of Langtry Falls Expansion Plan
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Langtry Falls Expansion Plan case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Langtry Benchmark, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Langtry Benchmark 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 Langtry Falls Expansion Plan can be done for the following purposes –
1. Strategic planning using facts provided in Langtry Falls Expansion Plan case study
2. Improving business portfolio management of Langtry Benchmark
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 Langtry Benchmark
Strengths Langtry Falls Expansion Plan | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Langtry Benchmark in Langtry Falls Expansion Plan Harvard Business Review case study are -
Low bargaining power of suppliers
– Suppliers of Langtry Benchmark in the sector have low bargaining power. Langtry Falls Expansion Plan has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Langtry Benchmark to manage not only supply disruptions but also source products at highly competitive prices.
Superior customer experience
– The customer experience strategy of Langtry Benchmark in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Ability to recruit top talent
– Langtry Benchmark is one of the leading recruiters in the industry. Managers in the Langtry Falls Expansion Plan are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Langtry Benchmark
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Langtry Benchmark does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Langtry Benchmark 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.
Analytics focus
– Langtry Benchmark 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 Marc Lipson 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.
High brand equity
– Langtry Benchmark has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Langtry Benchmark to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Sustainable margins compare to other players in Finance & Accounting industry
– Langtry Falls Expansion Plan firm has clearly differentiated products in the market place. This has enabled Langtry Benchmark to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Langtry Benchmark to invest into research and development (R&D) and innovation.
Highly skilled collaborators
– Langtry Benchmark 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 Langtry Falls Expansion Plan HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Langtry Benchmark 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.
Ability to lead change in Finance & Accounting field
– Langtry Benchmark 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 Langtry Benchmark in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Strong track record of project management
– Langtry Benchmark is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Langtry Falls Expansion Plan | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Langtry Falls Expansion Plan are -
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Langtry Falls Expansion Plan 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 Langtry Benchmark has relatively successful track record of launching new products.
High operating costs
– Compare to the competitors, firm in the HBR case study Langtry Falls Expansion Plan 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 Langtry Benchmark 's lucrative customers.
High cash cycle compare to competitors
Langtry Benchmark 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.
Interest costs
– Compare to the competition, Langtry Benchmark has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High bargaining power of channel partners
– Because of the regulatory requirements, Marc Lipson suggests that, Langtry Benchmark 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.
Workers concerns about automation
– As automation is fast increasing in the segment, Langtry Benchmark 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 decision making process
– As mentioned earlier in the report, Langtry Benchmark has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Langtry Benchmark even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Aligning sales with marketing
– It come across in the case study Langtry Falls Expansion Plan that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Langtry Falls Expansion Plan can leverage the sales team experience to cultivate customer relationships as Langtry Benchmark is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Langtry Benchmark 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.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Langtry Falls Expansion Plan, in the dynamic environment Langtry Benchmark has struggled to respond to the nimble upstart competition. Langtry Benchmark has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Langtry Benchmark is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Langtry Falls Expansion Plan can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Langtry Falls Expansion Plan | 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 Langtry Falls Expansion Plan are -
Creating value in data economy
– The success of analytics program of Langtry Benchmark has opened avenues for new revenue streams for the organization in the industry. This can help Langtry Benchmark to build a more holistic ecosystem as suggested in the Langtry Falls Expansion Plan case study. Langtry Benchmark can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Using analytics as competitive advantage
– Langtry Benchmark 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 Langtry Falls Expansion Plan - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Langtry Benchmark to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Langtry Benchmark can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Manufacturing automation
– Langtry Benchmark 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 Langtry Benchmark in the consumer business. Now Langtry Benchmark can target international markets with far fewer capital restrictions requirements than the existing system.
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 Langtry Benchmark 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.
Leveraging digital technologies
– Langtry Benchmark can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Langtry Benchmark can use these opportunities to build new business models that can help the communities that Langtry Benchmark operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.
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. Langtry Benchmark can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Langtry Benchmark 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 Langtry Benchmark to hire the very best people irrespective of their geographical location.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Langtry Benchmark 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.
Better consumer reach
– The expansion of the 5G network will help Langtry Benchmark to increase its market reach. Langtry Benchmark 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.
Building a culture of innovation
– managers at Langtry Benchmark 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.
Threats Langtry Falls Expansion Plan External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Langtry Falls Expansion Plan are -
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Langtry Falls Expansion Plan, Langtry Benchmark 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, Langtry Benchmark 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 Langtry Falls Expansion Plan .
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 Langtry Benchmark business can come under increasing regulations regarding data privacy, data security, etc.
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.
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 Langtry Benchmark.
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 Langtry Benchmark 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.
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. Langtry Benchmark 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.
High dependence on third party suppliers
– Langtry Benchmark 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.
Technology acceleration in Forth Industrial Revolution
– Langtry Benchmark has witnessed rapid integration of technology during Covid-19 in the Finance & Accounting industry. As one of the leading players in the industry, Langtry Benchmark 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.
Stagnating economy with rate increase
– Langtry Benchmark 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.
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. Langtry Benchmark needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.
Regulatory challenges
– Langtry Benchmark 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.
Weighted SWOT Analysis of Langtry Falls Expansion Plan 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 Langtry Falls Expansion Plan 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 Langtry Falls Expansion Plan 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 Langtry Falls Expansion Plan 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 Langtry Falls Expansion Plan 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 Langtry Benchmark needs to make to build a sustainable competitive advantage.